WASHINGTON - US homebuilders are feeling a little less pessimistic about the struggling housing market. But their mood hasn’t changed enough to signal a recovery anytime soon.
The National Association of Home Builders said yesterday that its builder sentiment index rose to 20 in November. That’s the highest level since May 2010 and only the second month the index has been at 20 or above in two years. The trade group cited low mortgage rates as a chief factor.
Still, any reading below 50 indicates negative sentiment about the housing market. It hasn’t reached 50 since April 2006, the peak of the boom.
Last year, the number of people who bought new homes fell to its lowest level on records going back nearly a half-century. Sales this year could fare just
as bad.Builders are struggling to compete with foreclosures, which have made the price of previously occupied homes more competitive. Many buyers are having difficulty obtaining loans or meeting higher down payment requirements.
David Crowe, the builders group’s chief economist, said the group is expecting future gains in builder confidence heading into 2012. New Orleans, Pittsburgh, and other smaller metro areas have shown improvement, the group said.
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