Confidence among U.S. homebuilders jumped more than forecast in May, reaching a five-year high that signals an improving outlook for construction, says Bloomberg News.
The National Association of Home Builders/Wells Fargo index of builder confidence rose to 29, the highest since May 2007. The gauge exceeded the highest projection in a Bloomberg News survey in which the median estimate was 26. Readings below 50 mean more respondents said conditions were poor.
Today’s report showed gains in measures of current single-family home sales, the outlook for the next six months and buyer traffic. Estimates of 47 economists in the Bloomberg survey ranged from 23 to 27. The group revised April’s reading to 24, from a previously estimated 25. The gauge, which was first published in January 1985, averaged 54 in the five years leading to the recession in December 2007. It reached a record low of 8 in January 2009.
“Although our first-quarter sales and earnings improved over the prior year, overall conditions in the housing market continue to be challenged,” Gary Robinette, chief executive officer of Ply Gem, the Cary, NC maker of exterior building products.
Work on apartment projects also is getting a lift as the foreclosure crisis turns more Americans into renters. Housing starts rose to a 685,000 annual pace in April, from a five-month low of 654,000 in March, according to the Bloomberg survey median ahead of a Commerce Department report due this week. Permits, a proxy for future construction, probably fell last month, economists predicted. Read More.