Home builder confidence highest in 5 years
Confidence rises a single point in June
Home builder confidence rose one point in June and currently sits at its highest level since May 2007, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
This measurement refers to the amount of confidence that home builders have in the current market for newly built, single-family homes. The HMI rose one point to reach 29 in June after registering a 28 the previous month.
“This month’s modest uptick in builder confidence comes on the heels of a four-point gain in May and is reflective of the continued, gradual improvement we are seeing in many individual housing markets as more buyers decide to take advantage of today’s low prices and interest rates,” Barry Rutenberg, chairman of the National Association of Home Builders (NAHB), said in a statement.
The NAHB/Wells Fargo Housing Market Index measures builder confidence through its HMI by asking builders to rate their current perspective on the market, as well as their expectations for the next six months.
“While the June HMI is in keeping with our forecast for gradually improving single-family home sales this year, recent economic reports that have shown some weakening in the pace of recovery likely factored into the marginal gain,” NAHB Chief Economist David Crowe, said in a statement.
“In addition, builders across the country continue to report that overly tight lending conditions and inaccurate appraisals are major obstacles to completing sales at this time,” Crowe added.
On a regional level, the most recent HMI data varied. Both the Midwest and the West saw gains, with the Midwest rising five points to 31 and the West gaining four points to 33.
However, both the Northeast and South each registered two-point declines. The Northeast fell from 31 5o 29, while HMI in the South dropped from 28 to 26.