Home builder confidence at highest level in 6 years
Builder confidence continues to rise
Home builder confidence rose yet again in September, marking the fifth straight month of confidence gains, the National Association of Home Builders (NAHB) said in a recent report.
According to the NAHB/Wells Fargo Housing Market Index (HMI), September confidence rose to a level of 40, its highest level since June of 2006.
“This fifth consecutive month of improvement in builder confidence provides further assurance that the housing market is moving in a positive direction, but there’s still a long way to go on the road to recovery and several obstacles are slowing our progress,” Barry Rutenberg, NAHB Chairman, said in a statement.
Rutenberg pointed at the current lending environment for the possible road blocks.
Rutenberg continued: “In particular, unnecessarily tight credit conditions are preventing many builders from putting crews back to work – which would create needed jobs — and discouraging consumers from pursuing a new-home purchase.”
The NAHB’s HMI Housing Market Index measures how builders feel about the prospects of single-family home sales and sales expectations for the next six months. Despite the increase to 40 in the latest HMI, the overall outlook is still below average. A number over 50 is needed to mean that more builders view sales conditions as good than poor.
August housing production rises
Meanwhile, housing production on a nationwide level increased 2.3 percent in August, the NAHB reported.
These gains were led by production in the single-family sector, which experience strong growth of 5.5 percent.
“Builders across the country have been reporting noticeable improvement in the number of serious buyers who are in the market for a new home, and today’s report shows that this is translating to some welcome gains in construction activity,” Rutenberg said.
The recent data combines to paint a picture of a stable recovery, said David Crowe, NAHB Chief Economist.
“The pace of overall housing production has been edging gradually upward all year as consumers become more confident in their local housing markets, and the latest data are further evidence that the housing recovery is here to stay,” Crowe said in a statement.