Homebuilder Confidence Rises

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Builder confidence has rebounded to levels not seen since 2006, according to a report released today by the National Association of Home Builders (NAHB). The NAHB/Wells Fargo Housing Market Index rose to 40 this month, continuing a five-month upward trend. The number would have to climb to over 50 to indicate that more builders view sales conditions as good than poor.

Source: nahb.org


"Builders across the country are expressing a more positive outlook on current sales conditions, future sales prospects and the amount of consumer traffic they are seeing through model homes than they have in more than five years," said NAHB Chief Economist David Crowe in a press release.

In the past six months, some real estate and home construction stocks have been on a rise as well:

Company/Fund

Stock Price Percentage Change

PulteGroup76%
Zillow31%
iShares Dow Jones U.S. Home Construction Index Fund31%
SPDR S&P Homebuilders Index Fund18%

Source: ycharts.com

Crowe warned that a lack of building lots in some markets and the rising costs of building materials may continue to hinder growth in the near future. The NAHB/Wells Fargo Housing Market Index includes gauging builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." Although the index continues to rise, its sub-50 rating still means that the majority of builders consider sales conditions not good.

The article Homebuilder Confidence Rises originally appeared on Fool.com.

Fool contributor Justin Loiseau owns shares of Zillow. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, TMFJLo.The Motley Fool owns shares of iShares Dow Jones US Home and Zillow.Motley Fool newsletter serviceshave recommended buying shares of The Home Depot and Zillow. The Motley Fool has adisclosure policy.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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