Homebuilder Confidence in U.S. Climbs to Five-Year High [View all]
Confidence among U.S. homebuilders jumped more than forecast in May, reaching a five-year high that signals an improving outlook for construction.
The National Association of Home Builders/Wells Fargo index of builder confidence rose to 29, the highest since May 2007, a report from the Washington-based group showed today. The gauge exceeded the highest projection in a Bloomberg News survey in which the median estimate was 26. Readings below 50 mean more respondents said conditions were poor.
“We have resumed the gradual upward trend in confidence that started at the beginning of this year,” Barry Rutenberg, chairman of the National Association of Home Builders and a builder from Gainesville, Florida, said in a statement. This comes “as stabilizing prices and excellent affordability encourage more people to pursue a new-home purchase.”
Companies such as building products maker Ply Gem Holdings Inc. are benefiting as cheaper homes and mortgage rates at a record low combine to boost demand. While foreclosures remain a hurdle for the industry three years after the end of the last recession, Federal Reserve Governor Elizabeth Duke said today that there are indications the “tepid” real estate market is on the mend.