U.S. homebuilder confidence was up significantly in June 2013 to reach 52 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). A reading over 50 indicates that more builders view sales conditions as good than poor.
"This is the first time the HMI has been above 50 since April 2006, and surpassing this important benchmark reflects the fact that builders are seeing better market conditions as demand for new homes increases," said NAHB Chairman Rick Judson, a home builder and developer from Charlotte, N.C. "With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes."
The one-month increase of eight points was the biggest since August and September of 2002, when the HMI also jumped eight points.
"Builders are experiencing some relief in the headwinds that are holding back a more robust recovery," said NAHB Chief Economist David Crowe. "Today's report is consistent with our forecast for a 29% increase in total housing starts this year, which would mark the first time since 2007 that starts have topped the 1 million mark."
The three components of the HMI all showed increases in June:
* the current sales conditions index was up eight points to 56
* the index of expectations for future sales was up nine points to 61, to its highest level since March 2006
* the index of prospective buyer traffic was up seven points to 40
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