US homebuilder confidence surges in July - 13 WTHR Indianapolis

US homebuilder confidence surges in July

Posted: Updated:
(AP Photo/Lynne Sladky). In this Friday, May 16, 2014 photo, a builder works on the site of the SoMa at Brickell apartment building in downtown Miami. (AP Photo/Lynne Sladky). In this Friday, May 16, 2014 photo, a builder works on the site of the SoMa at Brickell apartment building in downtown Miami.
  • NationalMore>>

  • NCAA settles head-injury suit, will change rules

    NCAA settles head-injury suit, will change rules

    Thursday, July 31 2014 2:52 AM EDT2014-07-31 06:52:16 GMT
    The NCAA has agreed to settle a class-action head injury lawsuit by creating a $70 million fund to diagnose thousands of current and former college athletes to determine if they suffered brain trauma playing...More >>
    The NCAA agreed on Tuesday to help athletes with head injuries in a proposed settlement of a class-action lawsuit that college sports' governing body touted as a major step forward but that critics say doesn't go...More >>
  • 5 food writers subpoenaed in 'pink slime' lawsuit

    5 food writers subpoenaed in 'pink slime' lawsuit

    Thursday, July 31 2014 2:51 AM EDT2014-07-31 06:51:12 GMT
    Several food writers, including a New York Times reporter, have been subpoenaed as part of a company's $1.2 billion defamation lawsuit against ABC related to the network's coverage of a meat product derided...More >>
    Several food writers, including a New York Times reporter, have been subpoenaed by a meat producer as part of its $1.2 billion defamation lawsuit against ABC in regards to the network's coverage of a beef product...More >>
  • Century-old pipe break points to national problem

    Century-old pipe break points to national problem

    Thursday, July 31 2014 2:35 AM EDT2014-07-31 06:35:13 GMT
    The quiet summer campus of UCLA found itself suddenly steeped in water and chaos after a major water pipe burst and spewed some eight million gallons, stranding people in parking garages and flooding the...More >>
    The rupture of a nearly century-old water main that ripped a 15-foot hole through Sunset Boulevard and turned a swath of the University of California, Los Angeles, into a mucky mess points to the risks and expense many...More >>
By ALEX VEIGA
AP Real Estate Writer

U.S. homebuilders' confidence in the housing market surged this month to the highest level since January, reflecting a pickup in sales of new homes and heightened expectations for sales the second half of the year.

The brighter sales outlook suggests home construction could pick up in coming months after a sluggish start this year.

The National Association of Home Builders/Wells Fargo builder sentiment index released Wednesday rose this month to 53, up four points from a revised reading of 49 in June.

Readings above 50 indicate more builders view sales conditions as good, rather than poor. The latest reading is the first above 50 since January, when it was 56.

Builders' view of current sales conditions for single-family homes, their outlook for sales over the next six months and traffic by prospective buyers each increased since June.

Higher mortgage rates and the bad weather weighed on home sales in late 2013 and early this year. Harsh winter weather also contributed to a sluggish start to this year's spring home-selling season.

But sales of new homes have picked up in recent months.

New home sales jumped 18.6 percent in May to a seasonally adjusted annual rate of 504,000, the highest level in six years. That followed a 3.7 percent increase in April. The gains came after declines in February and March.

Even with the big overall gain, sales of new homes are still running at just about half the pace of a healthy real estate market.

Still, the recent pickup in sales suggests that the housing recovery may be regaining its footing after slowing earlier this year.

Economists say there is significant pent-up demand for homes as many potential buyers put off purchases over the past few years because of concerns about the economy.

Solid job gains this year also bode well for housing.

Employers added 288,000 jobs last month, the fifth straight month of gains above 200,000. The national unemployment rate has slid to 6.1 percent, a 5 1/2-year low.

"An improving job market goes hand-in-hand with a rise in builder confidence," said David Crowe, the NAHB's chief economist. "As employment increases and those with jobs feel more secure about their own economic situation, they are more likely to feel comfortable about buying a home."

That optimism is reflected in the latest NAHB index, which is based on responses from 241 builders.

In the latest survey, builders' view of current sales conditions for single-family homes rose four points to 57. A measure of traffic by prospective buyers increased three points to 39. And builders' outlook for sales of single-family homes over the next six months jumped six points to 64, the highest level since September.

Housing, while still a long way from the boom of several years ago, has been recovering over the past two years.

Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB data.

The builder confidence survey sent shares in U.S. homebuilders higher in morning trading Wednesday. M/I Homes Inc., based in Columbus, Ohio, led the pack. The stock rose 72 cents, or 3.1 percent, to $23.63.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Powered by WorldNow