WASHINGTON – Monday delivered good news for manufacturers whose fortunes depend on a robust housing market. U.S. home-builder confidence surged in June to its highest level in seven years as the housing market's recovery gains traction, an industry survey showed Monday.
The National Association of Home Builders said its housing market index jumped from 44 in May to 52 in June, a milestone in the recovery from the collapse of the real estate bubble seven years ago.
It was the first time since April 2006 the index topped 50 points, which signals that builders view sales conditions as good, the NAHB said.
"Surpassing this important benchmark reflects the fact that builders are seeing better market conditions as demand for new homes increases," Rick Judson, NAHB chairman, said in a statement.
"With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes."
Also helping spur demand were mortgage rates, which have recently begun to climb from record lows but still remain relatively affordable.
"Exceptionally low inventories of new homes and low inventories of discounted distressed homes mean that home builders will have to put up homes at a faster pace to keep up with demand and consumers alike," said Gregory Bird of Moody's Analytics.
The NAHB said the new survey results confirmed its forecast for a 29% rise in housing starts this year, which would mark the first time since 2007 that starts exceed 1 million.
Copyright Agence France-Presse, 2013
