Home builder confidence recovered this month, rising to the second highest level in nine years.
The National Association of Home Builders/Wells Fargo builder sentiment gauge increased to 58 in November, up October’s three-month low of 54, according to data released today.
November marks the fifth consecutive month of readings above the 50 mark; scores above 50 indicate that builders are generally positive about the market for single-family homes. In September, builder sentiment reached 59, the highest level since 2005.
The index measuring confidence in current single-family sales increased to 62 this month from 57 in October. Builder predictions for prospective buyer traffic ticked up from 41 to 45, and the six-month sales outlook inched up to 66 from 64.
All regions posted a rise in builder confidence, with the Northeast witnessing the biggest increase, from 39 to 51. We’ve mapped out the progress of the US housing recovery here, using data from the recently released NAHB/First American Leading Markets Index (LMI).
“Growing confidence among consumers is what’s fueling this optimism among builders,” NAHB Chairman Kevin Kelly, a homebuilder and developer from Wilmington, Delaware, said in a statement. “Members in many areas of the country continue to see increasing buyer traffic and signed contracts.”
The improving jobs market has been bolstering sales, although wage growth for American workers remains anemic, potentially curbing a full economic rebound, MarketWatch reported.
D.R. Horton, the top homebuilder in the US, is attempting to woo more first-time buyers, which could increase sales volume while decreasing average prices.
The Commerce Department will release figures on housing starts tomorrow. Economists surveyed by Bloomberg estimate that starts will remain consistent with a 1.03 million pace in October, up slightly from a 1.02 million rate in September.