Confidence in the market for newly built single-family homes rose by the largest margin in nearly a decade and reached its highest point since March 2007, according to the Home Builders/Wells Fargo Housing Market Index (HMI) published Tuesday by the National Association of Home Builders (NAHB).
Confidence in the market for newly built single-family homes rose by the largest margin in nearly a decade and reached its highest point since March 2007, according to the Home Builders/Wells Fargo Housing Market Index (HMI) published Tuesday by the National Association of Home Builders (NAHB).
The HMI rose six points in July to 35. Even with the big gain, the index remains under 50, signaling more builders view conditions as poor than good.
"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 NAHB and a home builder from Gainesville, Fla. "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."
Every HMI component recorded gains in July. The components gauging current sales conditions and traffic of prospective buyers each rose six points, to 37 and 29, respectively, while the component gauging sales expectations for the next six months rose 11 points to 44.
Likewise, every region posted HMI gains in July. The Northeast registered an eight-point gain to 36, while the Midwest gained three points to 34, the South gained five points to 32 and the West gained 12 points to 44.
"Combined with the upward movement we've seen in other key housing indicators over the past six months, this report adds to the growing acknowledgement that housing-though still in a fragile stage of recovery-is returning to its more traditional role of leading the economy out of recession," said NAHB Chief Economist David Crowe.