Home builder confidence hits highest level in nine years
Home builders have a little more spring in their step this fall.
An industry trade group reported Wednesday that optimism among builders of single-family homes is at its highest level since 2005 amid an improving job market and solid demand.
The National Assn. of Home Builders said its confidence index climbed in September for the fourth straight month, to 59, its best mark since November 2005. Anything above 50 is generally considered positive.
Builders were most bullish in their expectations for sales over the next six months. Current sales and traffic of prospective buyers scored lower.
It remains to be seen if builders’ sunnier outlook translates into more actual building. Construction of new homes has been rather muted in this recovery, especially at lower price points targeted to first-time buyers. NAHB chief economist David Crowe said rising costs for materials, lots and labor remain a hurdle for many builders, and tight credit conditions are keeping some buyers on the sidelines.
“While a firming job market is helping to unleash pent-up demand for new homes and contributing to a gradual, upward trend in builder confidence, we are still not seeing much activity from first-time home buyers,” Crowe said.
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