Homebuilder exchange traded funds are pulling out of the August slump as home construction firms are at their most optimistic since November 2005.
Homebuilder confidence in the market for newly built, single family homes remained unchanged in September at 58, following four consecutive months of improvement, according to the National Association of Home Builders.
Any reading above 50 means builders view the outlook as good rather than poor. The index averaged 54 in the five years leading to the financial crisis in 2007, Bloomberg reports.
However, home buyers are still weighing current market conditions against new purchases.
“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,” NAHB Chief Economist David Crowe said in the article.
Most buyers are looking at rising mortgage rates, but Hovnanian Enterprises Inc believes it is unlikely to stifle the housing recovery.