Builder confidence in the new-home market continued to inch higher this month, reaching its highest level since February 2007, according to the National Association of Home Builders/Wells Fargo Housing Market Index, which measures nationwide builder sentiment about current and future sale conditions and buyer traffic. This marks the fourth consecutive month that builder confidence has been on the rise.
“From the builder’s perspective, current sales conditions, sales prospects for the next six months, and traffic of prospective buyers are all better than they have been in more than five years,” says Barry Rutenberg, NAHB chairman. “While there is still much room for improvement, we have come a long way from the depths of the recession and the outlook appears to be brightening.”
Still, the sector is still in a very “fragile stage” and builders continue “to express frustration regarding the inventory of distressed properties, inaccurate appraisal values, and the difficulty of accessing credit for both building and buying homes,” says NAHB Chief Economist David Crowe.
On a regional level, builder confidence rose the most in August in the Midwest, followed by increasing confidence in the South. However, builder confidence in the sector declined slightly in the Northeast and West.