Builder Confidence Makes Biggest Gain In Decade
Builder confidence for newly built, single-family homes rose six points in July to 35 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
It's the largest one-month gain in the index in nearly a decade, and brings the HMI to its highest point since March 2007. All regions saw gains for the month, with the Northeast having the second-highest for the period, jumping eight points, to 36. The West saw the most growth, while the Midwest had the least.
"Builder confidence increased by solid margins in every region of the country in July as views of current sales conditions, prospects for future sales and traffic of prospective buyers all improved," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB). "This is greater evidence that the housing market has turned the corner as more buyers perceive the benefits of purchasing a newly built home while interest rates and prices are so favorable."
NAHB Chief Economist David Crowe said the gains over the past six months indicate the housing market is returning to its traditional role of leading the economy out of a recession.
"This is particularly encouraging at a time when other parts of the economy have begun to show softness, and is all the more reason that the challenges constraining housing's recovery – namely overly tight lending conditions, poor appraisals and the flow of distressed properties onto the market – need to be resolved," he said.
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