WASHINGTON, DC - Builder confidence in the market for newly built single-family homes hit a significant milestone in June, surging eight points to a reading of 52 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released mid-month. (Any reading over 50 indicates that more builders view sales conditions as good than poor.) The eight-point jump in the index was the biggest one-month gain since August and September of 2002, when the HMI recorded a similar increase of eight points.
This is the first time the HMI has been above 50 since April 2006, points out NAHB chairman Rick Judson, a home builder and developer from Charlotte, NC. “Surpassing this important benchmark reflects the fact that builders are seeing better market conditions as demand for new homes increases,” Judson adds. “With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes.”
"Builders are experiencing some relief in the headwinds that are holding back a more robust recovery," said NAHB chief economist David Crowe. "[This] report is consistent with our forecast for a 29 percent increase in total housing starts this year, which would mark the first time since 2007 that starts have topped the 1 million mark."
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