US homebuilder confidence improving, survey finds

Homebuilder confidence in the U.S. is at its highest level in more than six years, according to a report released by the National Association of Home Builders on Tuesday.

The report showed that the NAHB/Wells Fargo Housing Market Index increased to 41 in October from 40 in September. The increase matched economist estimates.

With the increase, the index rose for the sixth consecutive month, reaching its highest level since coming in at 42 in June of 2006.

NAHB Chairman Barry Rutenberg said, “Many builders are reporting increases in the number of serious buyers visiting their sales offices, and the overall confidence measure is much higher than it was at this time last year.”

“The concern is that, even though demand for new homes is rising, overly tight credit conditions are still constraining new building and new purchases at a time when that kind of economic activity and the job growth it generates are greatly needed,” he added.

The increase by the housing market index came as the component measuring traffic of prospective buyers jumped to 35 in October from 30 in September, reaching its highest level since April 2006.

Meanwhile, the components measuring current sales conditions and sales prospects for the next six months were both unchanged from the previous month at 42 and 51, respectively.

The housing market index for the Western region climbed to 49 in October from 44 in September, while the indexes for the South and the Northeast both rose by three points to 42 and 34, respectively.

Wednesday morning, the Commerce Department is scheduled to release a separate report on new residential construction in the month of September.

Economists expect housing starts to climb to an annual rate of 765,000 in September from 750,000 in August, while building permits are expected to rise to 810,000 from 803,000.