American homebuilders’ confidence in the housing market has hit the highest level of the year, according to a key report released Monday —the latest sign that some are hopeful an improving job market will help unleash some pent-up demand.
Confidence from builders that focus on newly-built single-family homes increased two points in August to a reading of 55 on the National Association of Home Builders/Wells Fargo Housing Market Index. That reading was a seven-month high and surpassed an important milestone, as any reading over 50 indicates that more builders view sales conditions as good than poor. It was above the reading of 53 projected by housing experts polled by Bloomberg News.
Key housing reports have indicated conditions remain choppy in the sector. Some are bullish that slower price appreciation and rising home inventory will better position the sector down the road, and ideally inspire more potential home buyers to make a purchase. But supply shortages in some hot markets, as well as tight credit conditions, have been problematic.
The NAHB report was issued a day before the Commerce Department will report U.S. construction data for July. Economists surveyed by Bloomberg expect housing starts will climb 7.8% in July from the prior month.