Homebuilder Confidence Hits 7-Year High
Homebuilders are the most confident they've been since January 2006, according to July's National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index report released today.
After clocking in at 52 points for June, July's 57 reading marks the third straight month of increases. Analysts were pleasantly surprised, having expected June's reading to remain true for July. Any number over 50 indicates that more builders view sales conditions as good than poor, a point reached for the first time last month since April 2006.
Source: Author, data from NAHB.org
"Today's report is particularly encouraging in that it shows improvement in builder confidence across every region as well as solid gains in current sales conditions, traffic of prospective buyers and sales expectations for the next six months," noted NAHB Chairman Rick Judson in a statement today. However, Judson emphasized that current growth is still fragile, and could easily be deterred: "This positive momentum could be disrupted by threats on the policy side, particularly with regard to the mortgage interest deduction and federal support for the housing finance system."
All three of the index's components increased for July. Prospective buyer traffic, and current sales conditions, both bumped up five points to 45 and 60, respectively. The future continues to look even brighter to builders, with the component measuring expected sales over the next six months up a solid seven points, to 67.
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