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U.S. Homebuilder Confidence Unexpectedly Shows Continued Improvement

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Homebuilder confidence in the U.S. unexpectedly climbed to its highest level in well over a year in the month of October, the National Association of Home Builders revealed in a report on Wednesday.

The report said the NAHB/Wells Fargo Housing Market Index jumped to 71 in October after inching up to 68 in September. Economists had expected the index to come in unchanged from the previous month.

With the unexpected increase, the housing market index rose for the fourth straight month and reached its highest level since hitting a matching reading in February of 2018.

"The second half of 2019 has seen steady gains in single-family construction, and this is mirrored by the gradual uptick in builder sentiment over the past few months," said NAHB Chief Economist Robert Dietz.

He added, "However, builders continue to remain cautious due to ongoing supply side constraints and concerns about a slowing economy."

The continued increase by the housing market index reflected gains by all three component indices, with the index measuring sales expectations in the next six months surging up to 76 in October from 70 in September.

The measure charting traffic of prospective buyers also jumped to 54 in October from 50 in September, while the index gauging current sales conditions increased to 78 from 75.

On Thursday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of September.

Economists expect housing starts to dip to an annual rate of 1.320 million in September after soaring to a rate of 1.364 million in August.

Building permits, an indicator of future housing demand, are also expected to drop to a rate of 1.350 million in September after jumping to a rate of 1.419 million in the previous month.

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