WASHINGTON (MNI) - U.S. home builders confidence in the new home market grew for the fifth consecutive month in September and is the highest it has been in over five years, the National Association of Home Builders reported Tuesday.
The NAHB/Wells Fargo housing market index, which measures builders confidence, found builders not only are more optimistic about the current building environment, but are hopeful sales conditions will actually be "good" six months down the road.
The composite index reached a five-year high of 40 in September from 37 in August, the report said. That category has not been above 50 since April 2006.
But the six month outlook index rose to 51 from 43, breaking the 50 threshold for the first time since February 2007.
While the latest report from the NAHB is further proof the housing market is improving there are still numerous headwinds, the report said.
"In particular, unnecessarily tight credit conditions are preventing many builders from putting crews back to work -- which would create needed jobs -- and discouraging consumers from pursuing a new-home purchase," NAHB Chair Barry Rutenberg said.
NAHB Chief Economist David Crowe said there also are concerns about a lack of building lots and rising costs of materials. "Given the fragile nature of the housing and economic recovery, these are significant red flags."
The survey for the seasonally-adjusted index asks builders if they view the market as "good," "fair" or "poor" and any number over 50 indicates builders view the market as good, while anything less than 50 is poor.