Builder confidence in the market for new, single-family homes increased by four points to 53 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
According to the National Association of Home Builders, a number higher than 50 is an indication that more builders view sales conditions as good than poor. July is the first time since January that the index has been above 50.
The NAHB says this sudden rise in homebuilder confidence is most likely due to improved employment data and economic growth.
“An improving job market goes hand-in-hand with a rise in builder confidence,â€ said NAHB Chief Economist David Crowe. “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.â€
The index measuring home builders’ views on current sales conditions rose four points to 57. Furthermore, the index evaluating their expectations for future sales increased by six points to 64. The index measuring traffic of prospective buyers increased three points to 39.