Homebuilder Confidence in U.S. Increases More Than Forecast
Homebuilder confidence in the U.S. rose more than forecast in July to the highest since January 2006 as companies grew more upbeat about sales prospects.
The National Association of Home Builders/Wells Fargo index of builder sentiment climbed to 57 this month from a revised 51 in June, the Washington-based group reported today. The reading surpassed all but one forecast in a Bloomberg survey of 49 economists. The gauge has climbed 13 points in the latest two months, the biggest back-to-back advance since January-February 1992.
A pickup in builder optimism about the sales outlook shows an increase in mortgage rates in the last two months is having a limited effect on the housing market. Further gains in residential construction would help underpin the world’s largest economy after a slowdown in the first half of the year.
“You’re seeing a significant pickup in demand for new residential dwellings,” said Brian Jones, senior U.S. economist at Societe Generale in New York. His forecast of 55 was the most accurate in the Bloomberg survey. “Mortgage rates are moving higher and pulling people in. And I think that in general, the economy is getting better.”
Builders started work on 780,600 homes last year, a 28 percent increase from 2011 and the most in four years.
Read the full article by Jeanna Smialek on Bloomberg.com.
Photo Credit: Andrew Harrer/Bloomberg