WASHINGTON (Reuters) - Confidence among U.S. homebuilders rose for the first time this year as builders felt better about their prospects of selling new homes, an industry gauge showed on Monday.
The National Association of Home Builders/Wells Fargo index of homebuilder confidence rose four points to 49 in June, coming in just a point below the level that indicates favorable conditions.
June’s index came in above May’s 45 showing, which was the weakest since May 2013.
A reading below 50 means more builders view market conditions as poor than favorable. The June reading was the index’s fifth in a row to come in below 50.
Analysts polled by Reuters had expected the index to inch up to 47.
The U.S. housing market is still finding its feet after a slump brought on by protracted winter weather conditions that put a damper on construction and sales.
Homebuilders have expressed concern about the continued tighter credit conditions, a shortage of building lots, and rising homes prices.
“After several months of little fluctuation, a four-point uptick in builder sentiment is a welcome sign and shows some renewed confidence in the industry,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware. “However, builders are facing strong headwinds, including the limited availability of labor.”
The index’s single-family home sales component rose to 54, also the first rise this year, from last months’ reading of 48.
The gauge of single-family sales expectations for the next six months edged up to 59 from 56 in May, the highest reading for this component since January. The May figure was originally reported as 57.
The index of prospective buyer traffic rose to 36 from May’s reading of 33.
Reporting by Elvina Nawaguna; Editing by Meredith Mazzilli