Builders' confidence in the market for new single-family homes grew as the National Association of Home Builders' housing market index — a monthly gauge of builder sentiment — climbed to 49 in June from 45 in May.
"After several months of little fluctuation, a four-point uptick in builder sentiment is a welcome sign and shows some renewed confidence in the industry," NAHB Chairman Kevin Kelly said. "However, builders are facing strong headwinds, including the limited availability of labor."
"Consumers are still hesitant, and are waiting for clear signals of full-fledged economic recovery before making a home purchase," according to NAHB Chief Economist David Crowe. "Builders are reacting accordingly, and are moving cautiously in adding inventory."
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
The current single-family home sales index surged to 54 from 48, the sales expectations index for the next six months climbed to 59 from 56; and the traffic of prospective buyers index rose to 36 from 33.
