United States homebuilders are feeling more optimistic about the housing market, lifting their confidence this month to the highest level in 10 years.
The National Association of Home Builders/Wells Fargo builder sentiment index released on Monday rose this month to 64 points, up from 61 in September. The last time the reading was higher was October 2005, at 68 points.
Readings above 50 indicate more builders view sales conditions as good rather than poor. The index has been consistently above 50 since July last year.
Builders’ improved optimism bodes well for a pickup in new home construction, which could help the overall economy. The supply of new homes has been scarce, so greater construction could result in more sales.
Healthy hiring and smaller price increases for new homes have begun pushing up sales, which were crippled during the financial crisis and recovered slowly even after the downturn ended in 2009. Sales of new homes have soared nearly 22 percent in the past year. They hit a seasonally adjusted annual rate of 552,000 homes in August, the strongest pace since February 2008.
