Homebuilder Confidence Rises to Nine-Year High
Confidence among U.S. homebuilders rose in September to a nine-year high, showing the industry is gaining ground and will be a source of momentum for the economy.
The National Association of Home Builders/Wells Fargo sentiment measure climbed to 59 exceeding the highest estimate in a Bloomberg survey of economists, from 55 in August, the Washington-based group reported. Readings above 50 mean more respondents said conditions were good.
Improvement in the job market and low interest rates spurred buying interest this month, as the group’s index of foot traffic through model homes jumped to the highest level since October 2005. Faster wage gains would provide extra momentum for residential real estate, which has seen lackluster demand from first-time buyers.
“Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up, which is a positive sign that the housing market is moving in the right direction,” Kevin Kelly, NAHB chairman and a builder and developer in Wilmington, Delaware, said in a statement.
The median forecast in the Bloomberg survey of 46 economists for the builder sentiment gauge, which is the highest since November 2005, called for a gain to 56. Estimates ranged from 53 to 58.
The report also showed purchases and sales expectations increased this month. The measure of the six-month sales outlook climbed to 67, the highest since August 2013, from 65 in August.
An index of current single-family home sales rose to 63, the highest this year, from 58, while the group’s gauge of prospective buyer traffic advanced to 47 from 42.
Builder confidence increased in three of four U.S. regions, led by a 12-point jump in the South to 63, the highest since January 2006. Sentiment also advanced in the West and Northeast.
