U.S. homebuilders’ confidence grew the most in nearly a year in June at a time when the residential home market is getting stable after the harsh winter weather took a toll on the industry in the first quarter.
The confidence index, which is measured by the National Association of Home Builders/Wells Fargo, rose to 49 in June from 45 a month ago, its fastest advance since July 2013. A reading above 50 indicates that more respondents believe that market conditions are good, reported Bloomberg.
“The increase is a welcome sign and shows some renewed confidence in the industry,” said Kevin Kelly, a NAHB Chairman and a homebuilder from Wilmington, Delaware. “However, builders are facing strong headwinds, including the limited availability of labor.”
June has been a good month for homebuilders, with present home sales, future sales outlook, and prospective buyer visits all going up. This indicates that the low mortgage rates and resurgent labor market is driving demand in the property market.
This was also the first time the index has increased this year. The measure of potential buyer traffic grew to 36 in June from 33 a month earlier while the gauge of present sales of single-family dwellings rose to 54 from 48 a month ago. The outlook for six-month sales grew to 59 from 56 over the period.
Builder sentiment rose in the West, Midwest and the South and plunged to the lowest level in three months in the Northeast region.
Mortgage rates have declined over the past month. A typical 30-year fixed rate mortgage fell to 4.20 percent in the week through June 12 from 4.41 percent on April 1. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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