U.S. home builder sentiment nudged upward in June to its highest level in five years, the National Association of Home Builders said on Monday.
The NAHB/Wells Fargo Housing Market index rose one point from the month before to 29, in another sign that the housing market may be slowly heading into recovery, and one point ahead of the expectations of economists polled by Reuters. May's reading was previously reported as 29.
The index, however, was still below 50, meaning more builders view market conditions as poor than favorable. It has not been above 50 since April 2006.
The single-family new home sales component rose to 32 from 30 in May, its highest level since April 2007. The gauge of single-family sales expectations for the next six months held steady at 34 from May, and prospective buyer traffic also remained in place at 23.
"This month's modest uptick in builder confidence comes on the heels of a four-point gain in May and is reflective of the continued, gradual improvement we are seeing in many individual housing markets as more buyers decide to take advantage of today's low prices and interest rates," said NAHB chairman Barry Rutenberg in a statement.
David Crowe, NAHB chief economist, said in a statement that "overly tight lending conditions and inaccurate appraisals" are hindering the completion of further sales.
Sentiment varied by region. The Northeast and South registered slight declines in June, down two points to 29 and 26, respectively. The West and Midwest saw increases of 4 and 5 points, up to 33 and 31, respectively.