New home demand reaches highest level in 7 years

The National Association of Home Builders/Wells Fargo builder confidence index rose to 37, higher than projected and the best showing since February 2007, according to figures from the Washington-based group released today. The median forecast in a Bloomberg survey of economists called for no change from July’s 35.Readingsbelow 50 mean more respondents said conditions were poor.  This is the highest the builder confidence index has been since February of 2007.

The builders group’s index of present single-family home sales climbed to 39 this month from 36 in July and a measure of sales expectations for the next six months rose to 44 from 43. Both gauges reached the highest level since 2007.

As we are seeing foreclosure inventory drop, and demand remaining at normal levels, Home prices are going up, and the demand for new or custom homes is increasing.  Many builders expect this trend to continue, and if employment numbers rise, perhaps even improve significantly.

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