U.S. Homebuilder Confidence Shows Notable Improvement In June

(RTTNews) - Homebuilder confidence in the U.S. has improved by more than expected in the month of June, according to a report released by the National Association of Home Builders on Monday.

The report showed that the NAHB/Wells Fargo Housing Market Index climbed to 49 in June from 45 in May. Economists had expected the index to edge up to 47.

While the index rose to its highest level since January, the NAHB noted that it remains one point shy of the threshold for what is considered good building conditions.

"After several months of little fluctuation, a four-point uptick in builder sentiment is a welcome sign and shows some renewed confidence in the industry," said NAHB Chairman Kevin Kelly. "However, builders are facing strong headwinds, including the limited availability of labor."

The NAHB said the bigger than expected increase by the housing market index reflected increases by all three index components.

The component gauging current sales conditions showed a significant increase, climbing to 54 in June from 48 in May.

Additionally, the component gauging sales expectations in the next six months and the component measuring buyer traffic both increased by 3 points to 59 and 36, respectively.

Tuesday morning, the Commerce Department is schedule to release its report on new residential construction in the month of May.

Economists expect housing starts to drop to an annual rate of 1.036 million in May after jumping to a rate of 1.072 million in April.