Home-builder confidence ticks up, reaches four-month high
Led by positive data on sales of new single-family housing, home-builder confidence ticked up in December, reaching its highest reading in four months.
The gauge of the National Assn. of Homebuilders/Wells Fargo Housing Market Index reached 58 last month. Figures above 50 signal that builders are optimistic.
“This is definitely an encouraging sign as we move into 2014,” said Rick Judson, NAHB’s chairman and a home builder from Charlotte, N.C. “This indicates that an increasing number of builders have a positive view on where the industry is going.”
The housing market has recently cooled, a trend that begin this summer. However, experts said prices are expected to rise again in the spring.
December’s confidence reading, which surprised some economists, appears to support that theory.
“This is hard to square with the sharp drop in mortgage demand over the past few months and the decline in new home sales, but it is a welcome development nonetheless,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a research note.
NAHB’s chief economist, however, said the rise in confidence is partly due to pent-up demand from home buyers who were stymied during October’s partial government shutdown, which delayed the issuance of Federal Housing Administration loans and made it difficult to verify home buyers’ incomes through the Internal Revenue Service.
“Following a two-month pause in the index, this uptick is due in part to release of the pent-up demand caused by the uncertainty generated by the October government shutdown. We continue to look for a gradual improvement in the housing recovery in the year ahead,” said NAHB chief economist David Crowe.
