The National Association of Home Builders reported that the U.S. homebuilder sentiment has moved up to 29, the highest it has been in five years.
The single-family home sales index rose from 30 in May to 32, bringing it to its highest level since April 2007. The housing index still remains below 50, showing that builders still do not see the market as favorable. The last time the housing index was above 50 was April 2006.
We had previously mentioned earlier this year in January how the Housing Market Index had risen to a surprising rate of 25, resulting in four straight months of increases. January’s reading of 25 had been the highest the index had been in the previous 4.5 years.
The chart below gives a good visualization on how much the housing market index has risen in just one year.
NAHB chairman Barry Rutenberg said in a statement, “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.” said.
NAHB chief economist David Crowe feels that “overly tight lending conditions and inaccurate appraisals” are hindering the completion of further sales.
The Northeast and South regions each dropped two points in June, while the West and Midwest saw an increase of 4 and 5 points, respectively.
To read the original Reuters article, please click here.