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Builder confidence hits highest level since November 2005

Posted on Tuesday, August 25, 2015 at 10:14:41 PM

Builder confidence in the market for newly built, single-family homes increased one point in August, to reach its highest level since November 2005. 

The National Association of Home Builders/Wells Fargo Housing Market Index rose to 61 percent this month, with any measure above 50 representing an overall belief that conditions are good rather than poor. 

"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," NAHB chairman Tom Woods said in a press release. 

The index is compiled using three separate components, two of which rose in August. The index measuring buyer traffic rose two points to 45, while the one that gauges current sales conditions increased a single point to 66 percent. The third index, which measures sales expectations, remained at 70. 

The confidence homebuilders have espoused in recent months is fueling belief that the housing recovery is finally heading into full swing. 

"The overall message from the survey ... is very upbeat," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a client note, according to the Wall Street Journal. "We see nothing here to change our view that a real recovery in the housing market is finally under way."