Homebuilder confidence beats expectations

Confidence among US housebuilders rose unexpectedly in August, according to data from the National Association of Home Builders (NAHB).

The NAHB’s housing market index measures home sales and expected home building in the future, and rose to 59 from 56 the month before. Analysts had expected to see a slight fall to 56.

Paul Diggle, property economist at Capital Economics, said earlier today that the housing recovery is a bright spot of the US economy - and arguably one of the successes of the government's quantitative easing programme.

Even if the Fed decides to taper off its mortgage-backed securities purchases faster than its Treasury purchases, he said, its unlikely to derail the recovery in the housing market.

Diggle nevertheless thinks that, with market concerns over tapering sending mortgage interest rates higher, it would make sense for the Fed to taper off its Treasury purchases at a faster rate.