The nation's home builders are clearly feeling better about the housing recovery. A monthly sentiment index from the National Association of Home Builders jumped 4 points in July to 53, finally crossing into positive territory; 50 is the line between positive and negative sentiment.
"This is the first time that builder confidence has been above 50 since January and an important sign that it is strengthening as pent-up demand brings more buyers into the marketplace," said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.
The number is beyond the Street's expectations of a 1-point gain and comes amid concern that the housing recovery has lost considerable steam. Home prices are still rising well beyond income gains, and even Fed Chair Janet Yellen, in testimony Tuesday to Congress, called the recovery "disappointing." Mortgage rates have not moved, but demand for home loans continues to fall.
Employment, however, is improving, and low levels of existing homes for sale is creating more demand for new construction.