The US construction industry looks like it's on the up, with builder confidence returning. Figures from the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index showed that for newly-built single-family homes, confidence surged eight points to read 52 for June. This is a significant milestone, with any reading over 50 indicating that more builders view sales conditions as good rather than poor.
Rick Judson, NAHB chairman, said: "This is the first time the HMI has been above 50 since April 2006, and surpassing this important benchmark reflects the fact that builders are seeing better market conditions as demand for new homes increases. With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes."
What's more, the eight-point jump was the largest recorded since August and September 2002. However, NAHB chief economist David Crowe isn't surprised, stating that the findings are "consistent with our forecast for a 29 per cent increase in total housing starts this year". If realised, this would mark the first time starts have topped the one million mark since 2007.
Ultimately, the figures act as further evidence that the housing market recovery is well and truly underway in the US. As construction starts to increase, property investment opportunities abound and buyers are encouraged to strike while the iron's hot. The index measured expectations for future sales at 61, rising by nine points throughout June. This is the highest level recorded since March 2006 and shows the extent to which market activity will increase in the near-term.
Meanwhile, the index gauging traffic of prospective buyers rose by seven points to 40. Although below the 50 mark, it indicates positive upward momentum. The three-month moving average was also up in three of the four regions, with the northeast and midwest posting a one-point and three-point gain respectively. This takes their readings to 37 and 47. In the south, a four-point gain to 46 was recorded, while a one point drop to 48 took place in the west.
- Wednesday 19 June 2013