Builder confidence rose 2 points to a score of 60 this month, its highest level since January, according to the National Association of Home Builders' Wells Fargo Housing Market Index (HMI),released Thursday morning. June's mark matched the confidence level at this time last year but fell a point short of the reading in January. A score over 50 indicates a positive outlook for the home building industry.
“Builders in many markets across the nation are reporting higher traffic and more committed buyers at their job sites,” said NAHB Chairman Ed Brady, in a statement. “However, our members are also relating ongoing concerns regarding the shortage of buildable lots and labor and noting pockets of softness in scattered markets.”
All three components made noticeable progress this month, led by expected single family sales for the next 6 months, which was up 5 points to a reading of 70, the highest in eight months. Present sales conditions and traffic of prospective buyers gained 1 and 3 points to a mark of 64 and 47, respectively.
“Rising home sales, an improving economy and the fact that the HMI gauge measuring future sales expectations is running at an eight-month high are all positive factors indicating that the housing market should continue to move forward in the second half of 2016,” said NAHB Chief Economist Robert Dietz.
By region, the West and South both posted positive month-over-month results for the month, standing at 68 and 61, respectively. Builder confidence in the Northeast and Midwest dropped modestly to 39 and 57, respectively.
All scores have caught up with the early 2006 pre-recession level and are hovering in the relatively healthy range seen in the past two years. The composite index fell to a low of 9 in Dec. 2008. Individual components of the HMI dropped to their lowest point in December 2009, when builders rated current sales conditions at an 8, future sales expectations at a 17, and traffic from prospective buyers at a 7.
Read more about today's release from the NAHB >>
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