Homebuilder confidence rises in August to highest since November 2005

Homebuilders in the U.S. became slightly more optimistic about the country’s housing market during August, putting confidence levels up to where they have not been in over a decade during the housing boom that was fueled by debt.

He added, “Job and economic gains should keep the market moving forward at a modest pace throughout the rest of the year”. It rose to 61, which is its highest since the month of November 2005.

Economists expect housing starts to rise to an annual rate of 1.180 million in July after jumping to a rate of 1.174 million in June. Any reading over 50 indicates more builders see sales conditions as favorable rather as poor. Two components – current sales and buyer traffic – were up, while sales expectations were unchanged.

“However, we continue to hear that builders face difficulties accessing land and labor”, Woods said.

“Mortgage applications for purchases index declined in the first week of August, but residential construction employment rose last month”. Builders were asked about current sales of new single-family houses, sales expectations for the next six months, and traffic of prospective buyers. This trend is likely to shift to higher new home prices in order to induce more builders to build.

“Today’s report is consistent with our forecast for a gradual strengthening of the single-family housing sector in 2015”, said David Crowe, NAHB’s chief economist.

Looking at the three-month moving averages for regional HMI scores, the West and Midwest each rose three points to 63 and 58, respectively.