- Tom Woods, NAHB Chairman
US homebuilders' sentiment rose to the highest level in almost a decade this month, suggesting growing confidence in a gradually improving housing market. The housing market index climbed to 61 in August, the highest since November 2005, up from 60 the previous two months, the National Association of Home Builders/Wells Fargo reported. A reading above the 50-mark threshold indicates that most builders see conditions in the market as positive. The reading has been positive for the past year, following five months in early 2014, when the index was in negative territory. In June, sales of existing homes surged to their highest since February 2007, while newly built single-family home sales dropped in June by 6.8% to their lowest level since November 2014, as a shortage of inventory drives up prices at an unsustainable pace.
A separate report showed the Federal Reserve Bank of New York's Empire State factory index plummeted to minus 14.9 in August, the lowest level since April 2009. A robust job market and historically low mortgage rates will probably keep underpinning demand for residential real estate, helping home building sector contribute to overall economic growth. Gains in construction will be needed to help offset any slowdown in manufacturing as factories struggle with a strong Dollar and bloated inventories.
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