Homebuilder confidence hits highest level in 7 years

“With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes.”

{mosads}The eight-point increase also was the biggest one-month gain since September 2002, when the index also rose by eight points. 

“Builders are experiencing some relief in the headwinds that are holding back a more robust recovery,” said David Crowe, NAHB’s chief economist. 

“Today’s 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.”

All three index components posted gains in June. 

The index gauging current sales conditions increased eight points to 56, while the index measuring expectations for future sales rose nine points to 61, its highest level since March 2006. The index gauging traffic of prospective buyers jumped points to 40.

The three-month moving average was up in three of the four regions, with the Northeast and Midwest posting a one-point and three-point gain to 37 and 47, respectively. The South registered a four-point gain to 46 while the West fell one point to 48.