Builder confidence in the U.S. new home market in June reached its highest level since May of 2007, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Builder confidence gained a point in June from a revised May level to stand at 29.
The June HMI component that measures current sales conditions rose two points to 32 - its highest level since April of 2007.
The component measuring sales expectations in the next six months was unchanged at 34.
The component measuring traffic by prospective buyers was also unchanged and stood at 23.
"This month's modest uptick in builder confidence comes on the heels of a four-point gain in May and is reflective of the continued, gradual improvement we are seeing in many individual housing markets as more buyers decide to take advantage of today's low prices and interest rates," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla.
"While the June HMI is in keeping with our forecast for gradually improving single-family home sales this year, recent economic reports that have shown some weakening in the pace of recovery likely factored into the marginal gain," said NAHB Chief Economist David Crowe. "In addition, builders across the country continue to report that overly tight lending conditions and inaccurate appraisals are major obstacles to completing sales at this time."
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