Even at 5-year high, home-builder confidence remains weak
Confidence among U.S. home builders is at its highest level since May 2007, but many still think market conditions leave much to be desired, according to new figures from their trade group.
An index from the National Assn. of Home Builders and Wells Fargo measuring sentiment rose one point in June to 29. Part of the increase is due to May’s figure being revised down to 28 from 29.
For more than six years, the gauge has stayed below 50 -- the level at which more home builders view the housing market as being in a good rather than poor state.
“Builders across the country continue to report that overly tight lending conditions and inaccurate appraisals are major obstacles to completing sales at this time,” the group’s chief economist, David Crowe, said in a statement.
Still, many interpreted what the home-builders group called a “modest uptick” as a sign of gradual recovery. Home prices are low but are showing signs of life in markets including the Southland. Mortgage rates are at record lows.
In California, home sales surged 17.6% in May, according to Dataquick. A Thursday report from the Harvard Research Center found new home inventories at record lows and rising rents, putting the industry in “the early innings of a housing recovery” despite a glut of homeowners being “underwater” and a backlog of properties in the foreclosure process.
The index from the home-builders group showed sales conditions for new single-family homes rising to their highest level in more than five years as expectations for the next six months remained stable. Confidence in the West rose four points to 33 in June but dipped in the Northeast and South.
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