Builder confidence climbs to highest level since 2006

September 19th, 2012

Home builders expect a spike in new single-family homes being built in the coming months.

Builder confidence for newly-built, single-family homes increased in September, signaling that the market for new homes is showing signs of strength. The confidence level reached 40 on the National Association of Home Builders/Wells Fargo Housing Market Index, representing the fifth month of consecutive increases and the highest reading since June 2006.

"Builders across the country are expressing a more positive outlook on current sales conditions, future sales prospects and the amount of consumer traffic they are seeing through model homes than they have in more than five years," said NAHB Chief Economist David Crowe.

When broken down by geographic area, builder confidence remained elevated in every region across the country, with areas in the West and Midwest posting the highest gains.

Although builders anticipate an increase in new homes, and the mortgage industry has seen a stronger interest in existing homes for sale, economists say there is still a long way to go before the housing market reaches sustainable levels of growth.