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Strong homebuilder index good sign for housing market

Posted on Tuesday, June 16, 2015 at 5:34:06 PM

Lebron James recently stated he's the best player in the world - and that's confidence. Do you know who else is about is confident as James? U.S. homebuilders. 

In fact, according to the National Association of Home Builders, they haven't been this pleased with their industry's six-month outlook since 2005. The index for the six-month outlook jumped from 63 last May to 69 in June. 

The most recent NAHB/Wells Fargo builder sentiment index hit 59, up five points from May's reading of 54. An index of 50 or more indicates that those surveyed believe sales conditions are good. 

The positive takeaways from the NAHB's survey indicates that there is strong demand for homes, despite 2015 starting off with a slow winter. Though sales have been fueled by low mortgage rates, this sort of confidence is the kind of thing that drives rates up. It remains to be seen how a potential rate hike will affect confidence and residential lending. 

For now though, homebuilders are certainly feeling a bit like Lebron James. Despite having to slog through unenviable conditions, they're sure that the future is bright.