Homebuilders are on the move this morning after the National Association of Home Builders said its gauge of builder sentiment about single-family homes rose to its highest level in more than four years. The index hit 29, up from 25 a month ago, and tends to track with data on single-family home starts. Nonetheless, sentiment needs to hit 50 to indicate that more builders see prospects as “good” than “poor.”
ÂBuilder confidence has doubled since September as measured by the HMI,Â said NAHB Chairman Barry Rutenberg in a statement. ÂGiven the recent improvements in new home starts and the increasing number of markets included in the NAHB/First American Improving Markets Index, this consistency suggests that the housing market is moving toward more sustainable growth.Â
Builders have generally risen in the past six months as data points to slightly stronger demand. But some of the optimism about the industry appears to be wishful thinking, particularly as analysts and investors peg their hopes for stocks in numerous industries on strength in the housing market.