U.S. Homebuilder Confidence Reaches Seven-Month High In August

(RTTNews) - Homebuilder confidence in the U.S. unexpectedly improved for the third consecutive month in August, according to a report released by the National Association of Home Builders on Monday.

The report said the NAHB/Wells Fargo Housing Market Index climbed to a reading of 55 in August from 53 in July. Economists had expected the index to come in unchanged compared to the previous month.

With the unexpected increase, the housing market index rose to its highest level since reaching a reading of 56 in January.

The upward move by the housing market index reflected increases by all three of the components that make up the index.

The NAHB said the indices gauging current sales conditions and expectations for future sales each rose two points to 58 and 65, respectively, while the index gauging traffic of prospective buyers increased three points to 42.

"Each of the three components of the HMI registered consecutive gains for the past three months, which is a positive sign that builder confidence appears to be firming following an uneven spring," said NAHB Chief Economist David Crowe.

He added, "Factors contributing to this rise include sustained job growth, historically low mortgage rates and affordable home prices, which are helping to unleash pent-up demand."

Tuesday morning, the Commerce Department is scheduled to release a separate report on new residential construction in the month of July.

Housing starts are expected to climb to an annual rate of 963,000 in July after falling to a rate of 893,000 in June.