Homebuilder Confidence Approaches 10-Year High in July

An index reading above 50 indicates that more builders view sales conditions as good than view them as poor.

The current sales conditions subindex added a point in July to reach 66, and the sales expectations subindex rose two points to 71. The subindex that estimates prospective buyer traffic slipped by one point to 43.

NAHB’s chief economist said:

This month’s reading is in line with recent data showing stronger sales in both the new and existing home markets as well as continued job growth. However, builders still face a number of challenges, including shortages of lots and labor.

In the NAHB’s four regions, the three-month moving average index rose in the South from 56 in May to 60 in June and by a like amount to 44 in the Northeast. In the West, the index rose by two points to 57 and the index dropped one point in the Midwest to 54.

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The average interest rate for a conventional 30-year fixed mortgage loan last week fell between 4.125% and 4.250%, according to Mortgage News Daily. The 52-week range for conventional 30-year fixed loans is 3.55% to 4.26%.

The NAHB/Wells Fargo housing market index has remained above 50 since last July, following a sharp drop in the first half of 2014. Prior to mid-2013, the index had not risen to 50 since mid-2006.