WASHINGTON – Confidence among U.S. homebuilders rose more than forecast in July, reaching the highest level in six months, as growing payrolls brightened the outlook after a shaky first half.
The National Association of Home Builders/Wells Fargo sentiment measure climbed to 53 from 49 in June, the Washington-based group reported Wednesday. Readings above 50 mean more respondents said conditions were good. The median forecast in a Bloomberg survey of economists projected it would rise to 50.
The housing market is showing signs of improvement after higher mortgage rates and harsh winter weather stalled the recovery earlier this year. A strengthening labor market, combined with wage gains and rising consumer sentiment, will probably support further progress in the industry as the Federal Reserve winds down its unprecedented stimulus program.
“There’s not a lot of housing supply, and at the same time, the economy has gotten a little bit better,” Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, said before the report. “In general, this is a pretty good backdrop for builders.”
Estimates in the Bloomberg survey for the homebuilder sentiment index ranged from 48 to 53. June’s reading was unrevised, the report showed.
The measure of the six-month sales outlook rose to its highest level since September, climbing to 64 this month from 58 in June.
An index of current single-family home sales increased to 57, the best reading since January, from 53, while the group’s gauge of prospective buyer traffic rose to 39 from 36.
Builder confidence strengthened in all four U.S. regions, with the West rising to 59, the highest in six months, from 53. The Midwest climbed to 53 in July from 47 the month before, while the Northeast rose to 37 from 34. In the South, the measure advanced to 53 from 52.