Builder Confidence Rises to Highest Level Since 2007

U.S. home builders might not be singing “Happy Days are Here Again,” but they seem to be humming a few bars of “I Whistle a Happy Tune.” According to the NAHB/Wells Fargo Housing Market Index, builder confidence is up again in May for a second consecutive month, to its highest level since August 2007. The index gained three points, improving to 22. Historically speaking, 22 is still low for the 20-plus-year index. Any number under 50 on the index indicates that more builders view sales conditions for single-family homes to be poor rather than good. Still, NAHB executives viewed the gain as a positive especially since the survey was taken at the beginning of May after the expiration of the extended and expanded federal home buyer tax credit. “This means builders are more comfortable that the market is truly beginning to recover, and that positive factors for building a new home--low interest rates, great selection, stabilizing prices, and a recovering job market--are taking the place of tax incentives to generate buyer demand,” said NAHB chief economist David Crowe in a news release announcing the index results.

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