Home builder confidence gauge reaches 10-year high

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July confidence among builders of single-family homes hit its highest level since November 2005 on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which was released last week.

The July level was measured at 60, and the June reading was revised upward one point, making June’s level 60 as well.

The data came from a monthly survey that the NAHB has conducted for the past 30 years. The survey gauges builders’ perceptions of current sales expectations and single-family home sales over the coming six months.

The analysts take each component score to calculate a seasonally adjusted index. Any number above 50 indicates most builders view current conditions as good rather than poor.

“The fact that builder confidence has returned to levels not seen since 2005 shows that housing continues to improve at a steady pace,” Tom Woods, NAHB chairman and a home builder from Blue Springs, Mo., said. “As we head into the second half of 2015, we should expect a continued recovery of the housing market.”

“This month’s reading is in line with recent data showing stronger sales in both the new and existing home markets, as well as continued job growth,” David Crowe, NAHB's chief economist, said. “However, builders still face a number of challenges, including shortages of lots and labor.”

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