Confidence among U.S. homebuilders rose in June by the most in almost a year, a sign the residential real estate market is stabilizing after reeling from severe winter weather earlier this year.
The National Association of Home Builders/Wells Fargo sentiment gauge climbed to 49 this month from 45 in May, the biggest gain since July 2013, figures from the Washington-based group showed. Readings greater than 50 mean more respondents report good market conditions. The median forecast in a Bloomberg News survey called for 47.
Current sales, the outlook for future purchases and prospective buyer traffic improved this month, figures showed, indicating mortgage rates close to historically low levels and a strengthening job market are sustaining demand. Improving sentiment comes as the world’s largest economy is gaining this quarter after a contraction in the first three months.
The increase “is a welcome sign and shows some renewed confidence in the industry,” NAHB Chairman Kevin Kelly, a homebuilder and developer from Wilmington, Delaware, said in a statement. “However, builders are facing strong headwinds, including the limited availability of labor.”
The gain this month in the index was the first this year. Estimates in a Bloomberg survey of 44 economists ranged from 45 to 52.