Builder confidence reaches highest level since 2006

|  June 20, 2013 |

Jonathan Silke cuts shingles on a roof in Des Moines. Credit: Bryon Houlgrave/The Des Moines Register

Jonathan Silke cuts shingles on a roof in Des Moines. Credit: Bryon Houlgrave/The Des Moines Register

For the first time since April 2006, more U.S. home builders say they view the market  as “good” rather than “poor.”

The sentiment comes through the June edition of the National Association of Home Builders/Wells Fargo Housing Market Index. The Index’s rating of builder confidence rose eight points in June to a 52.

The NAHB says June’s eight-point jump is the biggest one-month gain since August and September of 2002.

The index reading should come to no surprise after the positive growth the housing market enjoyed in May. U.S. home construction starts rose 6.8 percent in May to a seasonally adjusted annual rate of 914,000.

The index is composed of three components, all of which saw increases in June. Expectations for future sales rose nine points to a 61, the highest level for that metric since March 2006. The current sales conditions index was up to a 56 while the gauge of prospective buyer traffic rose to 40.

The monthly builder confidence survey asks home builders to rate current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.”

It averages the scores of those responses on a scale where any reading over 50 indicates builder confidence in good market conditions.

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