NEW YORK Nov 19 U.S. homebuilder sentiment rose
for a seventh consecutive month in November and hit its highest
level in over six years as demand for new homes increased due to
a shrinking supply of distressed and foreclosed inventory, the
National Association of Home Builders said on Monday.
The NAHB/Wells Fargo Housing Market index rose to 46 from 41
the month before, the group said in a statement. Economists
polled by Reuters had predicted the index would remain unchanged
at 41. The index was at its highest level since May 2006.
However, the gauge remained below 50, showing that the
housing market was still some way off full recovery. Readings
below 50 mean more builders view market conditions as poor than
favorable. The index has not been above 50 since April 2006.
Still, the measure has made strong progress over the last
year, helping to cement optimism in the sector. In November last
year it stood at just 19. Housing led the financial crisis of
2008-09 and has been one of the biggest overhangs in the
"Builders are reporting increasing demand for new homes as
inventories of foreclosed and distressed properties begin to
shrink in markets across the country," said NAHB Chairman Barry
Rutenberg in a statement.
"In view of the tightening supply and other improving
conditions, many potential buyers who were on the fence are now
motivated to move forward with a purchase in order to take
advantage of today's favorable prices and interest rates," he
The single-family home sales component rose to 49 from 41.
The gauge of single-family home sales expectations for the next
six months rose to 53 from 51, its third consecutive month above
50, while prospective buyer traffic was flat at 35.
(Reporting by Edward Krudy; Editing by Chizu Nomiyama)