Economic Buzz: US homebuilder confidence improves in October

A report released by the National Association of Home Builders on Thursday showed homebuilder confidence in the U.S. has improved by much more than anticipated in the month of October.

The report said the NAHB/Wells Fargo Housing Market Index jumped to 37 in October after holding steady at 32 in September.

With the much bigger than expected increase, the housing market index reached its highest level since hitting 40 in April.

The surge by the headline index partly reflected a sharp increase by the index gauging future sales, which shot up to 54 in October from 45 in September.

The component measuring current sales conditions also climbed to 38 in October from 34 in September, while the gauge charting traffic of prospective buyers rose to 25 in October from 21 in September, the NAHB said.

The NAHB said the latest HMI survey also revealed 38 percent of builders reported cutting prices in October, with the share alternating between 37 percent and 39 percent since June.

The average price reduction rose to 6 percent in October after averaging 5 percent for several months previously. The last time builders reduced prices by 6 percent was a year ago, the NAHB said.

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