Builder confidence in the market for newly-built, single-family homes hit a major milestone in July, rising four points to a reading of 53 and showing good sales conditions, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
Last month, the index teetered on the edge of almost being a good sales condition market, coming in at 49, which was still below positive confidence.
“This is the first time that builder confidence has been above 50 since January and an important sign that it is strengthening as pent-up demand brings more buyers into the marketplace,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.
“An improving job market goes hand-in-hand with a rise in builder confidence,” said NAHB Chief Economist David Crowe. “As employment increases and those with jobs feel more secure about their own economic situation, they are more likely to feel comfortable about buying a home.”
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.”
The most recent jobs report for June posted that the economy shook off its complacency and for once in a rare while, ADP was accurate in its preditions – 288,000 jobs were added.
But desipte the improvement, the jobs report was not all rosy.
"The jobs report was positive overall, showing that the pace of hiring continues a solid upward trajectory. The string of five consecutive monthly gains averaging more than 200,000 was the best performance since late 1999," said Fannie Mae chief economist Doug Duncan. "However, not all is rosy, especially from the Federal Reserve’s perspective. The labor force participation rate remains at depressed levels last witnessed during the 1970s. In addition, despite the improved pace of hiring, wage gains remain weak, implying the persistence of considerable slack in the labor market.
In addition, all three HMI components witnessed increases in July.
The index gauging current sales conditions increased four points to 57, while the index measuring expectations for future sales rose six points to 64 and the index gauging traffic of prospective buyers increased three points to 39.
Broken up across the market, the HMI three-month moving average was up in all four regions, with the Northeast and Midwest recording a one-point and two-point gain to 35 and 48, respectively.
The West experienced a five-point gain to 52 while the South grew two points to 51. hey --