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WASHINGTON (MarketWatch) - A gauge of confidence among home builders is the highest in seven months, with readings showing growing optimism about present and coming sales of single-family homes, according to data released Monday.
The gauge of sentiment among home builders rose two points to 55 in August, according to National Association of Home Builders/Wells Fargo data. Readings above 50 signal that builders, generally, are optimistic about sales trends. August marks the second consecutive month of above-50 readings.
'Builder confidence appears to be firming following an uneven spring,' said David Crowe, NAHB's chief economist. 'Factors contributing to this rise include sustained job growth, historically low mortgage rates and affordable home prices, which are helping to unleash pent-up demand.'
Tuesday morning the government will report on housing starts for July, and economists polled by MarketWatch expect construction to recover, jumping to an annual rate of 970,000 from June's surprisingly slow pace of 893,000, which was a nine-month low. The government's latest report on new-home sales also showed a large drop, and Federal Reserve officials have been concerned about the housing sector's slow recovery.
Escalating prices and mortgage rates hit housing demand this year, as a relatively low number of homes on the market constrained sales as well. But looking forward there are reasons for optimism. Recent reports on mortgages signal that the lending marketplace is healing, with loan access and demand rising. And a strengthening job market should encourage more workers to make home purchases.
Data details released Monday showed that a gauge of builders' views on upcoming sales of single-family homes rose two points to 65 in August, while a barometer of builders' views on present sales rose two points to 58. A gauge of prospective-buyer traffic increased three points to 42.
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