WASHINGTON – June 19, 2012 – Confidence among U.S. builders ticked up this month to a five-year high, an indication that the housing market is slowly improving.
The National Association of Home Builders/Wells Fargo builder sentiment index rose in June to 29, the highest reading since May 2007. It increased from a reading of 28 last month, which was revised down one point from its initial figure.
The index, which was released Monday, has risen in seven of the past nine months, suggesting builders are starting to see the seeds of a recovery taking shape after years of stagnation.
Yet, the market has a long way to go. Any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached that level since April 2006, the peak of the housing boom.
In June, builders reported seeing the best sales level since April 2007, according to a separate measure in the survey. Their outlook for sales in the next six months, however, hasn’t changed from May.
Sales of both previously occupied homes and new homes rose near two-year highs in April. And builders are breaking ground on more homes and requesting more permits to build single-family homes later this year.
Jennifer Lee, senior economist for BMO Capital Markets, said that June reading on builder sentiment was welcome news. She said even with recent weak readings on employment, builders’ outlook for sales over the next six months did not decline and foot traffic remained the same.
Copyright © 2012 The Associated Press, Martin Crutsinger, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.