NAHB/Wells Fargo Housing Market Index Rises 1 Point in July

“Builders Face Difficulties Accessing Land and Labor”

U.S. homebuilder sentiment rose in August to its highest level since a matching reading almost a decade ago, the National Association of Home Builders said on Monday.

The NAHB/Wells Fargo Housing Market index rose to 61 from 60 in July, the highest since a matching reading in November 2005. The reading matched economists’ expectations, according to a Reuters poll conducted earlier this month.

“The fact the builder confidence has been in the low 60s for three straight months shows that single-family housing is making slow but steady progress,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. “However, we continue to hear that builders face difficulties accessing land and labor.”

The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. The survey has not been below 50 since June 2014.

“Today’s report is consistent with our forecast for a gradual strengthening of the single-family housing sector in 2015,” NAHB Chief Economist David Crowe said in a statement. “Job and economic gains should keep the market moving forward at a modest pace throughout the rest of the year.”

The single-family home sales component rose to 66 from 65 to mark its highest level since November 2005. The gauge of single-family sales expectations for the next six months was steady at 70, while prospective buyer traffic rose to 45 from 43 to mark the highest reading since December.