Home builder confidence rose to its highest level since before Lehman’s collapse, according to the National Association of Home Builders Housing Market Index, released today. The renewed sense of confidence isn’t purely a result of the new year — in fact builder confidence has increased for four consecutive months.
Still, confidence is relatively low as the 4-point gain this month brought the index to 25. Not until the index hits 50 do the majority of builders view overall conditions as good.
“The confidence gauge [is] up from near-historic lows in the first half of 2011,” said David Crowe, chief economist of NAHB. “That said, caution remains the word of the day as many builders continue to voice concerns about potential clients being unable to qualify for an affordable mortgage, appraisals coming through below construction cost, and the continuing flow of foreclosed properties hitting the market.”
Each of the three components that comprise the housing market index also rose for the fourth consecutive month to levels not seen since at least 2009. The confidence increase was also consistent across all four regions of the U.S. in January, with the Northeast showing the biggest increase — 9 points — to 23. In the South, the index gained 2 points to 27. — Adam Fusfeld