Confidence among homebuilders climbed in August to the highest level in almost a decade, indicating
The National Association of Home Builders/Wells Fargo builder sentiment gauge rose to 61, the highest since November 2005, from 60 in the prior two months, figures from the Washington-based group showed on Monday. Readings greater than 50 mean more respondents report good market conditions.
Measures of
"Today's report is consistent with our forecast for a gradual strengthening of the single-family housing sector in 2015," David Crowe, chief economist at NAHB, said in a statement. "Job and economic gains should keep the market moving forward at a modest pace throughout the rest of the year."
The results matched the median forecast of 45 economists surveyed by Bloomberg. Estimates ranged from 58 to 62.
The group's gauge of prospective buyer traffic rose to 45, the best reading this year, from 43 the prior month. The index of current single-family home sales increased to 66, the highest since November 2005.
The measure of the six-month sales outlook held at 70 for a second month, an almost 10-year high.
"Single-family housing is making slow but steady progress," NAHB Chairman Tom Woods, a homebuilder from Blue Springs, Mo., said in the statement.
Builder confidence climbed in three regions, rising to 65 in the West, 63 in the South, and 59 in the Midwest. Sentiment fell in the Northeast to 43 from 49.
Gains in employment are bolstering home purchases. Payrolls grew in July by 215,000 workers following a 231,000 gain in the prior month, and the jobless rate held at a seven-year low of 5.3%.
Borrowing costs remain relatively low. The average 30-year, fixed-rate mortgage was 3.94% in the week ended Aug 13, close to the level at the start of 2015 and below last year’s high of 4.53% reached in early January 2014, according to data from Freddie Mac.
Federal Reserve policy makers are considering raising interest rates for the first time since 2006. Some prospective homebuyers may be spurred to move ahead with their purchasing plans as the rate rise looms. Seventy-seven percent of forecasters in a Bloomberg survey taken Aug. 7-12 said the Fed will raise its main policy rate next month.
A Commerce Department report due on Tuesday may show housing starts increased to a 1.18 million annualized pace in July from 1.17 million the prior month, according to the median forecast in a Bloomberg survey. That would be the second-highest level since November 2007.
