WASHINGTON (6/17/14)--For the first time this year, homebuilder confidence is on the upswing, according to the June National Association of Home Builders' (NAHB) housing market index, released Monday.
All three subcomponents in June increased, with the composite index jumping to 49 from 45 and current sales surging by 6 points (Economy.com June 16).
However, the index--which gauges overall confidence among homebuilders--still falls below 50, indicating high levels of pessimism within the homebuilding market.
"Consumers are still hesitant, and are waiting for clear signals of a full-fledged economic recovery before making a home purchase," David Crowe, NAHB's chief economist, told MarketWatch (June 16). "Builders are reacting accordingly, and are moving cautiously in adding inventory."
The West region saw the strongest rebound, climbing nine points in June after an abysmal start to the year, according to Moody's analysts.
The only region not to post strong gains in builder confidence was the Northeast, where the index dropped even further to 33 from 35.
"Since the NAHB's composite index generally tracks single-family housing starts, (the positive report) increases the chance that single-family residential construction will hasten as we enter the summer," said Gregory Bird, Moody's Analyst (Economy.com). "However, this is no slam dunk, as the headline number remains below 50, albeit barely, signaling that on net more builders view single-family housing market conditions as poor than good."