Home builder sentiment

The National Association of Home Builders/Wells Fargo (NAHB) builder sentiment index released today, rose to its highest level in six years.

Builder confidence in the market for newly built, single-family homes rose for a fifth consecutive month in September to a level of 40 and brings the index to its highest reading since June of 2006.

NAHB Chairman Barry Rutenberg said: “This fifth consecutive month of improvement in builder confidence provides further assurance that the housing market is moving in a positive direction, but there’s still a long way to go on the road to recovery and several obstacles are slowing our progress. 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 Chief Economist David Crowe said: “Builders across the country are expressing a more positive outlook on current sales conditions, future sales prospects and the amount of consumer traffic they are seeing through model homes than they have in more than five years. However, against the improving demand for new homes, concerns are now rising about the lack of building lots in certain markets and the rising cost of building materials. Given the fragile nature of the housing and economic recovery, these are significant red flags.”

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