Homebuilder Confidence in U.S. Holds at Highest Level Since 2005

By Shobhana Chandra – Sep 17, 2013 7:00 AM PT

Homebuilder confidence held in September at the highest level in almost eight years, a sign housing will remain a bright spot for the U.S. economy.

The National Association of Home Builders/Wells Fargo confidence index registered 58 this month, matching August’s revised reading as the strongest since November 2005, a report from the Washington-based group showed today. Readings greater than 50 mean more builders view conditions as good than poor.

“Following a solid run up in builder confidence over the past year, we are seeing a pause in the momentum as consumers wait to see where interest rates settle and as the headwinds of tight credit, shrinking supplies of lots for development and increasing labor costs continue,” David Crowe, the association’s chief economist, said in a statement.

Companies including Hovnanian Enterprises Inc. (HOV) have said the recent rise in mortgage rates will temporarily restrain the housing recovery rather than end it. While work orders from the past few months will probably sustain construction gains, faster growth in hiring and wages are needed to spur bigger increases in demand.

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