Builders Grow More Optimistic in January

Washington, DC, Jan. 18, 2012 — Builder confidence in the market for newly built single-family homes rose in January to the highest point since June 2007, according to the National Association of Home Builders.

The NAHB/Wells Fargo housing market index rose 4 points to 25, the fourth consecutive rise. Economists had expected only a 1-point improvement to 22.

Every region rose, including a 9-point surge in the Northeast and a 5-point advance in the West, and each component — current sales conditions, sales expectations in the next six months and traffic of prospective buyers — rose 3 points.

NAHB Chief Economist David Crowe said the gains were due to improvement in employment and consumer confidence.

But he also cited headwinds, pointing to clients unable to qualify for a mortgage, appraisals coming through below construction cost and the continuing flow of foreclosed properties hitting the market.

Readings over 50 are considered “good,” which hasn’t been the case since April 2006.