Confidence among U.S. builders rose to the highest level in five years in May, a hopeful sign that modest improvement in the housing market will pick up. The National Association of Home Builders/Wells Fargo builder sentiment index rose to 29 in May. That’s the highest reading since May 2007 and up from a downwardly revised reading of 24 in April. The index rose for six straight months before falling in April. Still, any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached hit that level since April 2006, the peak of the housing boom. Homebuilders reported improving sales and higher traffic from prospective buyers. A gauge measuring confidence in sales over the next six months also rose, to 34 from 31. The improved outlook follows other recent signs that the depressed housing market is slowly improving. In March, builders requested the highest number of permits to build new homes and apartments in 3 1/2 years. And the number of people who signed contracts to buy homes rose in March to the highest level in nearly two years. Mortgage rates have fallen to record lows and hiring has picked up, making it easier for more Americans to buy homes. Still, many would-be buyers are having difficulty qualifying for home loans or can’t afford larger down payments required by banks. Posted on Tue, May. 15, 2012 09:22 AM

By Inman News, Thursday, April 26, 2012.

Inman News®

Sun house image via Shutterstock.

Pending sales of existing homes rose to their highest level in nearly two years in March, according to the National Association of Realtors’ latest Pending Home Sales Index.

The index, which represents contracts signed but not yet closed, jumped a seasonally adjusted 4.1 percent from February to March, to 101.4. That’s the highest index level since April 2010, when the deadline for a federal homebuyer tax credit program loomed. The index was 111.3 then.

Pending sales were up 10.8 percent from the same time a year ago on a non-seasonally adjusted basis.

An index score of 100 is equal to the average level of sales contract activity in 2001, a robust year for home sales and the first year examined by the trade group. The index typically represents about 20 percent of all existing-home transactions. Contracts signed in March typically close one or two months later.

“First-quarter sales closings were the highest first-quarter sales in five years. The latest contract signing activity suggests the second quarter will be equally good,” said Lawrence Yun, NAR’s chief economist, in a statement.

“The housing market has clearly turned the corner,” Yun said. “Rising sales are bringing down inventory and creating much more balanced conditions around the county, which means home prices will be rising in more areas as the year progresses.”

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