Us builder confidence up in august

Condos being built in Brooklyn, New York Photo: Michael Tapp

Confidence levels in the US construction sector have risen in August for the third month in a row, according to the National Association of Home Builders.

The report, which is based on a survey conducted by the NAHB, gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or "poor". The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or "low to very low".

With the US housing market enjoying a strong burst of recovery in the last year, sentiment is climbing among those building the houses. Indeed, all three of the index's components saw increased in August, with current sales and expectations for future sales each up two points to 58 and 65, respectively. The index is now at its highest level since January of this year.

"As the employment picture brightens, builders are seeing a noticeable increase in the number of serious buyers entering the market," explains NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. "However, builders still face a number of challenges, including tight credit conditions for borrowers and shortages of finished lots and labor."

"EEach of the three components of the HMI registered consecutive gains for the past three months, which is a positive sign that builder confidence appears to be firming following an uneven spring," adds NAHB Chief Economist David Crowe. "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."