Homebuilders Gain Confidence
U.S. home-builder sentiment improved unexpectedly in February as prospective buyers showed more interest, but the gauge remained near historic lows, the National Association of Home Builders said on Tuesday.
The NAHB/Wells Fargo Housing Market index rose 1 point to 20 in February from 19 in January, the group said in a statement. In December the index had fallen to 18, the lowest level since the survey began in January 1985, it said.
Economists polled by Reuters had predicted the index would be unchanged at 19. Readings below 50 mean more builders view market conditions as poor than favorable.
Despite the improvement in February, the index remains well below the peak of 72 reached in the most recent economic expansion, during June 2005.
The NAHB's president, Sandy Dunn, said the beleaguered housing market needed help from Washington to recover.
"Housing has always been a major engine of economic growth, and despite the ongoing market correction, it will once again be that engine in the future," Dunn, a home builder from Point Pleasant, West Virginia, and the newly elected 2008 president of the NAHB, said in a statement.
"But in order for that to happen, Congress must follow up on its recently enacted economic stimulus program by passing legislation that will jump-start the housing market and keep the economy moving forward."
The measure of current single-family sales also edged up to 20 in February from 19 in January. The NAHB's index for single-family sales for the next six months fell to 27 in February from 28 in January.
The gauge measuring the traffic of prospective buyers jumped to 19 in February -- its highest since hitting the same mark in July 2007 -- from 14 in January.
U.S. Treasury Secretary Henry Paulson said he did not place too much stock in the uptick in the NAHB index.
Financial markets showed a little more reaction. Stocks added slightly to their earlier gains. Government bonds, which usually benefit from signs of economic weakness, added to the day's earlier losses.
In the regional breakdown, the index covering the Northeast firmed to 24 in February from 21 in January. The Midwest held steady at 16. The South advanced to 24 from 22 and the West edged up to 15 from 13.