Homebuilder confidence jumps

Signs of recovery - and perhaps a bottom - emerge in housing market report; largest monthly increase since 2003.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Aaron Smith, CNNMoney.com staff writer

What will you do with your income tax refund?
  • Spend it
  • Save it
  • Not getting a refund

NEW YORK (CNNMoney.com) -- In a strong sign that the housing market may be picking up, builder confidence in April made its most dramatic increase in nearly seven years, according to an industry report.

The Housing Market Index, a survey-based measurement of sales, as well as sales expectations, rose by more than 50% in April, according to the National Association of Home Builders, which compiles the index with Wells Fargo.

The index rose to 14 from its prior level of 9, which was the biggest increase since May 2003.

"After a very long period of extreme distress, it's given the builders some sense of reaching a bottom," said David Crowe, chief economist for the association.

The index has had a volatile history. It was launched in January 1985 with a baseline level of 50. It fell to 20 in 1991 and then peaked above 70 in the bubble years of 1998 and 1999. The index fell below 50 again in 2001, then ascended gradually until June 2005, when it reached 72.

After that, the index fell into its most prolonged descent. There have been occasional lifts, but they have been temporary. Last April it was at 20 and then sank to the single digits in November, where it remained until this month's increase.

The survey is a composite of ratings, based on builders' perceptions of single-family home sales, their expectations for sales over the next six months and volume of prospective buyers.

Of these various components, the largest increase in April came from sales expectations for the next six months. According to Crowe, this is also the area that had suffered the steepest declines in recent months.

The market index rose in every region of the United States in April, with housing activity in the Northeast growing at twice the pace of the West. The index in the Northeast rose eight points, for a total of 16; the West gained four points, for a total of 9.

More housing reports on the way

Going forward, the government will release its monthly report on the construction market for residential housing on Thursday. The projections don't paint as optimistic a picture.

The U.S. Census Bureau is expected to announce that building permits totaled 550,000 in March, according to a consensus of economist estimates compiled by Briefing.com. This would be nearly unchanged from the prior month's tally of 547,000 permits.

The Census Bureau is also expected to report that housing starts totaled 550,000 in March, according to Briefing.com consensus. That would be a significant decline from 583,000 in the prior month. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.