In some positive news for the US economy, it was reported that US homebuilders are feeling more optimistic about the housing market lifting their confidence this month to the highest level in over 10 years. According to a report released by the National Association of Home Builders/Wells Fargo it was stated that its builder sentiment index rose this month to 64 as compared to a reading of 61 during the month of September. The last time the reading was higher was in October 2005. It is important to state that a reading above 50 indicates that more builders view sales conditions as good rather than poor.
It is imperative to state that builders’ improved optimism bodes well for a pick up in new home construction which could help provide the much needed impetus to the US economy which seems to have been losing some growth momentum over the last couple of months. Many industry experts believe that the supply of new homes has been scarce and therefore it could lead to greater construction and could result in more sales. Many analysts believe that firm job creation could help the housing market to grow at a rapid pace as the year draws to a close.
It is imperative to state that over the last couple of weeks, the economic reports coming out of the US economy has many traders and investors question the growth trajectory of the economy. Many believe that the housing market is the only sector in the economy which continues to show signs of growth and would drive the economy in the coming quarters. It is important to state that economists have cut their growth forecasts for the US economy for the current quarter and believe that the strong US dollar and the global weakness could drag growth.