Home Builder Confidence Soars in the US

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Home builder confidence has hit the highest level in seven years, as demand increases for new homes, according to data released today by the National Association of Home Builders.

The NAHB's Housing Market Index leapt eight points in June, the biggest one-month gain since August and September of 2002, the association reports.

The index hit 52 on the NAHB's scale, the first time it has crossed 50 since 2006.

"Surpassing this important benchmark reflects the fact that builders are seeing better market conditions as demand for new homes increases," said NAHB chairman Rick Judson. "With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes."

All three HMI components posted gains in June, including builders' perspective on current sales conditions, future sales and traffic of prospective buyers.

"Builders are experiencing some relief in the headwinds that are holding back a more robust recovery," said NAHB chief economist David Crowe. "Today's report is consistent with our forecast for a 29 percent increase in total housing starts this year, which would mark the first time since 2007 that starts have topped the 1 million mark."

The HMI three-month moving average was up in three of the four regions, with the largest growth reported in the South.