Home Builder Confidence Surging; Now at 2006 Level

Confidence among builders of single-family homes jumped for a fifth consecutive month in September to a level of 40 on a national index, bringing the measure to its highest reading since June of 2006.
But not all is positive, cautions the National Association of Home Builders.
Persistently tight credit conditions are preventing many builders from putting crews back to work, “which would create needed jobs — and discouraging consumers from pursuing a new-home purchase,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla.
Nonetheless, the NAHB/Wells Fargo Housing Market Index has been surging since May.
“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.
Examining the three-month moving average for each U.S. region, the Midwest and West each registered five-point gains, to 40 and 43, respectively. The South posted a four-point gain to 36 and the Northeast posted a two-point gain to 30.
Based on a monthly survey, the NAHB/Wells Fargo index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.”
The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.”
Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good rather than poor.

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