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U.S. Homebuilder Confidence Jumps To Seven-Year High In June

NAHBHousingMarket 061713

Homebuilder confidence in the U.S. jumped much more than expected in the month of June, according to a report released by the National Association of Home Builders on Monday, with the group's homebuilder confidence index surging up to a seven-year high.

The report said the NAHB/Wells Fargo Housing Market Index soared to 52 in June from 44 in May. Economists had been expecting the index to show a much more modest increase to a reading of 45.

With the much bigger than expected increase, the index climbed above 50 for the first time since April of 2006 and reached its highest level since hitting 54 in March of 2006.

The NAHB noted that any reading above 50 indicates that more builders view sales conditions as good than poor.

NAHB Chairman Rick Judson said, "Surpassing this important benchmark reflects the fact that builders are seeing better market conditions as demand for new homes increases."

"With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes," he added.

The much bigger than expected increase by the housing market index reflected gains by all three of the index components.

The index gauging current sales conditions jumped to 56 in June from 48 in May, while the index measuring expectations for future sales surged up to 61 from 52. The index gauging traffic of prospective buyers rose seven points to 40.

The NAHB said the HMI three-month moving average was up in three of the four regions, with the Northeast, Midwest and South seeing gains, while the West saw a modest decrease.

Tuesday morning, the Commerce Department is scheduled to release its monthly report on new residential construction. Economists expect housing starts to jump to an annual rate of 955,000 in May from 853,000 in April.

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