Home builders' confidence in the housing market surged in July to the highest level since January, reflecting a pickup in sales of new homes and heightened expectations for sales the second half of the year.
The brighter sales outlook suggests home construction could pick up in coming months after a sluggish start this year. The National Association of Home Builders/Wells Fargo builder sentiment index released last week rose this month to 53, up four points from a revised reading of 49 in June. Readings above 50 indicate more builders view sales conditions as good, rather than poor. The latest reading is the first above 50 since January, when it was 56. Builders' view of current sales conditions for single-family homes, their outlook for sales over the next six months, and traffic by prospective buyers each increased since June. Higher mortgage rates and the bad weather weighed on home sales in late 2013 and early this year. Harsh winter weather also contributed to a sluggish start to this year's spring home-selling season. But new home sales jumped 18.6 percent in May to a seasonally adjusted annual rate of 504,000, the highest level in six years.