Tax credit boost for homebuilders
Homebuilders in the United States are less pessimistic this month thanks to a government tax credit that has boosted sales.
The National Association of Home Builders/Wells Fargo confidence index rose to 22, exceeding the median forecast of economists surveyed by Bloomberg News and reaching the highest level since August 2007, from 19 in April, data from the Washington-based group showed. Readings lower than 50 mean more respondents said conditions were poor.
Americans rushed to sign contracts ahead of an April 30 deadline for a tax credit of as much as $8,000 (€6,500), spurring demand and trimming the inventory of unsold properties. While lower prices and borrowing costs have brought houses within reach of more buyers, more jobs are needed to sustain demand and limit foreclosures that depress values.
"The second homebuyer tax credit has brought both buyers and sellers back into the market," said Ryan Wang, an economist at HSBC Securities USA Inc, in New York, who accurately forecast the index. "We still have a long, long way to go."
The index this month was forecast to rise to 20, according to the median projection of 48 economists surveyed by Bloomberg. Estimates ranged from 17 to 23.