Homebuilder confidence is up slightly, according to June's National Association of Home Builders/Wells Fargo Housing Market Index report released Monday, but still in the pessimistic range.
After clocking in at 45 points for May, June's improvement comes as a relief. Analysts had expected an uptick, but their estimate of 47 proved too conservative, as the June index rose to 49.
Any number over 50 indicates that more builders view sales conditions as good rather than poor. Homebuilder confidence has been below the 50-point mark since February, when the index plummeted ten points to 46. The survey looks at builder confidence in the market for newly built single-family homes.
"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 in a statement today. "However, builders are facing strong headwinds, including the limited availability of labor."
Digging deeper into components, June's gains were well-rounded. Current sales conditions increased six points to 54, prospective buyer traffic inched up three points to 36, and future sales expectations for the next six months added on three points for a solid 59 reading.
NAHB Chief Economist David Crowe believes that, while June's report didn't show homebuilder confidence back in optimistic territory, it's another sign of slow improvement. He's quoted in the press release as saying "Consumers are still hesitant, and are waiting for clear signals of full-fledged economic recovery before making a home purchase. Builders are reacting accordingly, and are moving cautiously in adding inventory.