According to National Association of Home
Builders, homebuilder sentiment jumped in June to 52, surging above 50 for the
first time in seven years. The index is a key measurement in confidence for the
sector's recovery.
On June 17th, he NAHB/Wells Fargo Housing
Market index surged to 52 from 44 in May, exceeding expectations by analysts of
45. A reading above 50 means more builders feel market conditions are favorable
than poor. The reading of 52 was the highest level since April 2006, and 23
points higher than at this time last year.
NAHB chairman Rick Jordan
said, "Surpassing this important benchmark reflects the fact that builders
are seeing better market conditions as demand for new homes increases. With the
low inventory of existing homes, an increasing number of buyers are gravitating
toward new homes."
Homebuilders have seen improved market conditions along with a
recovery in the overall housing sector over the last eighteen months. Low
mortgage rates, improved sales, rising prices, and tighter inventory have all
helped the overall housing sector improve.
There is growing optimism among homebuilders, who feel even more
optimistic in near term. The gauge of single-family sales expectations for the
next six months rose to 61 from 52 and the single-family home sales component
rose to 56 from 48, while prospective buyer traffic climbed to 40 from 33.