Homebuilder Sentiment Nears Favorable Levels

By Stevie Duffin Updated on 12/14/2012

By Daniel Duffield

According to data from the National Association of Home Builders released on Wednesday, homebuilder sentiment rose in August, reaching a five-year peak and showing some hope and promise for the injured housing market.

The organization said in a statement that NAHB/Wells Fargo Housing Market index increased to 37 in August from 35 in July, exceeding the modest expectation of economists.

Previously, the highest rating for the index was taken I February 2007. As the fourth consecutive month of sentiment increase,  the index surged more than 20 points since the summer of 2011, however, levels have yet to reach 50, or the measurement showing market conditions as favorable rather than poor.

Not since April 2006 has the index been above 50 and the market deemed “favorable.”

NAHB chairman Barry Rutenberg said in a statement that although the levels have risen a fair amount since the recession and the outlook seems hopeful, full recovery has not yet been achieved.

In terms of single-family home sales, the component rose from 39 from 36. Expectations for the single-family rating have risen from 43 to 44, as potential buyer movement increased to 31 from 28.