American home builders in July had the best mood-booster in nearly 10 years as more buyers buying more new properties had the housing market hoping for a stronger recovery.
An index of confidence from the National Assn. of Home Builders and Wells Fargo climbed six points this month in its biggest gain since September 2002. The index is now at 35 – its highest level since March 2007.
Confidence in every region of the country is up, with sentiment best in the West. But since the national gauge is still below 50, more respondents than not said the situation is poor.
The signs, though, seem to be good. A measure of single-family home purchases is at a five-year peak. Buyer traffic is also the strongest it’s been in five years, as are indicators for sales over the next six months.
“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,” said Barry Rutenberg, chairman of the association, in a statement.
But the group’s chief economist David Crowe cautioned that housing is “still in a fragile stage of recovery” and faces challenges such as “overly tight lending conditions, poor appraisals and the flow of distressed properties onto the market.”