U.S. builder confidence for newly-built, single-family homes edged up to a seven-year high and hit a significant milestone in June, a leading industry report said on Monday.
The builder sentiment index gained 8 points to 52 this month, the biggest monthly gain since September 2002, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). Any reading over 50 indicates that more builders view sales conditions as good rather than poor.
"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," said NAHB Chairman Rick Judson.
In June, all three HMI components posted gains. The component gauging current sales conditions increased 8 points to 56. The component measuring traffic of prospective buyers gained 7 points to 40. And the component measuring sales expectations for the next six months rose by 9 points to 61, the highest level since March 2006.
"Builders are experiencing some relief in the headwinds that are holding back a more robust recovery," noted NAHB chief economist David Crowe. "Today's report is consistent with our forecast for a 29-percent increase in total housing starts this year, which would mark the first time since 2007 that starts have topped the one million mark."
Recent data indicate that the housing sector has become a bright spot in the U.S. economy since home prices began to climb in 2012 following years of declines.