Business

Home builders' confidence rises to a six-month high

Home builders are confident in the real estate market for first time since January, report says
A closely watched index of home builders' confidence in the housing market is at a six-month high

Home builders say business is finally looking up.

After staying pessimistic for months, builders now view sales conditions for new single-family homes as good, according to a closely watched gauge released Wednesday.

The National Assn. of Home Builders/Wells Fargo Housing Market index rose four points from June to a six-month high of 53 in July. Any number over 50 means more builders believe sales conditions are good.

"This is the first time that builder confidence has been above 50 since January and an important sign that it is strengthening as pent-up demand brings more buyers into the marketplace," NAHB Chairman Kevin Kelly said.

Home builders felt more confident in July in all three segments tracked by the gauge: current sales conditions, expectations of future sales and buyer traffic.

The builder numbers are the latest sign the housing market is heating up. Sales of new and previously owned homes posted strong gains in May from a month earlier.

The housing recovery began to slow last summer after prices surged and mortgage rates rose. Families struggled to afford a home and severe weather across much of the country put a deeper freeze on sales last winter.

But buyers are having a slightly easier time now, experts say. Mortgage rates are below year-ago levels and more homes are up for sale.

The builder group’s chief economist, David Crowe, said an improving job market is also helping buyers, and in turn builders.

“As employment increases and those with jobs feel more secure about their own economic situation, they are more likely to feel comfortable about buying a home," he said.

Twitter: @khouriandrew

Copyright © 2014, Los Angeles Times
Related Content
Comments
Loading