Home builders have a sunnier disposition these days, though they're not quite fully confident in the housing market just yet.
A key index of confidence in the housing construction industry climbed four points in June as builders said they expect to see more sales now and over the next six months.
That's according to the National Assn. of Home Builders, which surveys its members on their market outlook each month. Their Housing Market Index measured at 49 in June, up four points from May and one point shy of the threshold of 50 considered to be "good" building conditions.
"After several months of little fluctuation, a four-point uptick in builder sentiment is a welcome sign and shows some renewed confidence in the industry,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “However, builders are facing strong headwinds, including the limited availability of labor."
The index had been above 50 for much of last year, then tumbled in February as the spring housing market softened. Climbing back to 49 is a good sign, said NAHB chief economist David Crowe, but it's clear that worries about the broader economy remain.
"Consumers are still hesitant and are waiting for clear signals of full-fledged economic recovery before making a home purchase,” said Crowe. “Builders are reacting accordingly."
Home builder confidence is important for a housing market that's still wrestling with tight inventory, which is driving up prices. It's also important for the job market in California. About one in eight jobs created in the state since the start of 2013 have been in construction, according to a report last week by UCLA's Anderson Forecast, and any pullback in the sector could weaken job growth here.
Builders were most optimistic on the longer-term outlook, with confidence for sales over the next six months measuring at 59. Their current sales index climbed six points to 54. Traffic of prospective buyers climbed three points but remained relatively low at 36.
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