US Home Builders Confidence Highest Since 2006

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Home builder confidence in the U.S. increased six points for July, reaching its highest point since January 2006, according to new data from the National Association of Home Builders. 

The index for the market of newly built, single-family homes reached 57 in July, its third consecutive month of increases.

"Today's report is particularly encouraging in that it shows improvement in builder confidence across every region as well as solid gains in current sales conditions, traffic of prospective buyers and sales expectations for the next six months," NAHB chairman Rick Judson said in the release.

But there are landmines on the horizon.

"This positive momentum could be disrupted by threats on the policy side, particularly with regard to the mortgage interest deduction and federal support for the housing finance system," Mr. Judson said.

All three HMI components reported increases in July including sales expectations, prospective buyers and current sales conditions, the last of which increased to its highest level since 2006. 

"Builders are seeing more motivated buyers coming through their doors as the inventory of existing homes for sale continues to tighten," NAHB chief economist David Crowe said. 

All four regions reported increases in the three-month HMI averages, with the Midwest reporting the highest.