Confidence among U.S. homebuilders climbed in September to the highest level in more than six years, adding to signs of progress in residential construction.
The National Association of Home Builders/Wells Fargo builder sentiment index rose to 40 this month, the highest since June 2006, according to figures from the Washington-based group released last week. The median forecast in a Bloomberg survey of economists called for a rise to 38 from August’s 37. Readings below 50 mean more respondents said conditions were poor.
Cheaper properties and borrowing costs at record lows are attracting buyers and bolstering homebuilders such as Toll Brothers Inc. Sluggish progress in the labor market, domestic fiscal uncertainty and limited access to credit remain headwinds for the industry that helped spur the recession.
“The housing market is moving in a positive direction, but there’s still a long way to go on the road to recovery and several obstacles are slowing our progress,” Barry Rutenberg, chairman of the NAHB and a builder from Gainesville, Fla., said in a statement. “Unnecessarily tight credit conditions are preventing many builders from putting crews back to work – which would create needed jobs – and discouraging consumers from pursuing a new-home purchase.”
Estimates of 47 economists in the Bloomberg survey ranged from 35 to 40. The gauge, which was first published in January 1985, averaged 54 in the five years leading to the recession that started in December 2007. It reached a record low of eight in January 2009.
The builders group’s index of present single-family home sales advanced to 42 this month from 38 in August and a measure of buyer traffic increased to 31 from the prior month’s 30. The index of sales expectations for the next six months jumped to 51 from 43, turning positive for the first time since February 2007.