Tuesday, October 13th11.0°C

US homebuilder confidence rises in June but remains at low level amid sluggish sales

WASHINGTON - U.S. homebuilders are feeling more confident about the housing market but don't think it is healthy yet.

The National Association of Home Builders/Wells Fargo builder sentiment index rose to 49 in June, highest since January and up from 45 in May. Readings below 50 indicate that builders view sales conditions are poor rather than good. The index has been stuck below 50 since January. The low numbers earlier this year reflected a bitter winter that chilled economic activity across much of the U.S.

But warmer weather hasn't done much to help: Sales of new homes are running about half the rate of a healthy housing market.

Still, builders are the most confident they've been since January about new single-family home sales over the next six months. They report seeing more potential buyers shopping for homes, though traffic remains modest.

"Consumers are still hesitant, and are waiting for clear signals of full-fledged economic recovery before making a home purchase," said David Crowe, chief economist for the homebuilders group. "Builders are reacting accordingly, and are moving cautiously in adding inventory."

New home sales rose 6.4 per cent in April to a seasonally adjusted annual pace of 433,000 from 407,000 in March. But they were down more than 4 per cent from a year earlier. In a healthy market, the annual sales rate for new homes typically runs around 900,000.

Sales surged in the first half of last year but have sputtered since. Last year's gains and a limited supply of homes pushed up prices to levels that strained the household budgets of potential buyers. The median price for an existing home was $201,700 in April, up 5.2 per cent from a year earlier.

"With affordability still hugely impaired compared to last year, don't expect a sustained revival in demand anytime soon," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note. "And if mortgage rates rise over the summer, as we expect, housing will take another turn for the worse."

Existing home sales came in at an annual rate 4.65 million in April, up 1.3 per cent from March but down 6.8 per cent from a year earlier, according to the National Association of Realtors. In a healthy housing market, roughly 5.5 million existing homes are purchased each year.

The increase in home sales over the past year has occurred primarily among homes worth more than $750,000. Buying fell during the same period for homes worth less than $250,000, which make up the majority of all purchases.

The Canadian Press

Read more Business News


Recent Trending

Today's Market
S&P TSX13919.09-45.27
S&P CDNX555.61+3.35
S&P 5002016.30-1.16
CDN Dollar0.7697+0.0006
Natural Gas2.524-0.011

Okanagan Companies
Pacific Safety0.225-0.005
QHR Technologies Inc1.28+0.03
Metalex Ventures0.07+0.02
Russel Metals21.10-0.16
Copper Mountain Mining0.62-0.04
Colorado Resources0.07+0.00
ReliaBrand Inc0.022-0.002
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.075-0.005
Decisive Dividend Corp3.25+0.14
Diamcor Mining1.05+0.08



23143333553 Emerald Road
5 bedrooms 4 baths
more details
Click here to feature your property
Please wait... loading

Income for life?

Photo: Thinkstock.comIn almost every conversation I have with clients these days, the topic swings to interest rates. What direction they’re going, how long will they stay where they are and how...

Perfect (reno'd) home

Photo: Thinkstock.comHow many times have you found a home in the perfect location, but it needs too much work as per the home inspection? There is a great program available through most lenders that w...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...




Member of BC Press Council