U.S. homebuilders’ confidence bounced back strongly thismonth, a sign that construction and
industry hiring may pick up incoming months.The National Association of Home Builders/WellsFargo builder
sentiment index released Tuesday climbed to 58. That wasup from 54 in November and matched an eight-year
high reached in August.Readings above 50 indicate that more builders view sales conditions asgood than
poor.In addition, builders’ view of current salesconditions jumped this month to the highest level in eight
years. Andtheir outlook for sales heading into next year’s spring home-sellingseason also improved.The index
has stayed above 50 now for sevenstraight months after being below that level since May 2006. Thismonth’s
reading is 11 points higher than a year ago. It reflects a U.S.housing market fueled by steady job growth
and still-low mortgage rates.Thelatest index suggests that builders remain optimistic that the
housingrecovery will endure even though mortgage rates have risen in recentmonths."The recent spike in
mortgage interest rates has notdeterred consumers as rates are still near historically low levels,"said
David Crowe, the NAHB’s chief economist. "We continue to look for agradual improvement in the housing
recovery in the year ahead."Mortgagerates peaked at 4.6 percent in August and have stabilized
sinceSeptember, when the Federal Reserve surprised markets by taking noaction on starting to reduce its bond
purchases. Its bond purchases areintended to keep long-term interest rates low, including mortgage rates.The
Fed ends a two-day policy meeting Wednesday, after which it will release a statement and projections for the
economy.Mortgagebuyer Freddie Mac said last week that the average rate on the 30-yearloan declined to 4.42
percent from 4.46 percent a week earlier. InNovember last year, the average had dipped as low as 3.31
percent, thelowest on records dating to 1971.Sales of new homes slowed overthe summer after mortgage rates
rose sharply and a tight supply of homesfor sale boosted prices. The combination made home-buying
lessaffordable.But Americans ramped up purchases of new homes inOctober 25.4 percent to a seasonally
adjusted annual rate of 444,000,according to the Commerce Department.All told, sales of newlybuilt homes
have risen 21.6 percent for the 12 months ending in October.Still, the pace remains well below the 700,000
consistent with ahealthy market.And there are signs that builders are preparingfor less growth. Approved
permits to build single-family houses began toflat line in the spring, while spending on home construction
spendingfell 0.5 percent in October from September.Still, the latest NAHBsurvey, which included responses
from 346 builders, shows builders’outlook is rising again after dimming during the 16-day partial shutdownin
October.A measure of current sales conditions forsingle-family homes climbed six points to 64, the highest
level sinceDecember 2005. Builders’ outlook for single-family home sales over thenext six months rose two
points from November to 62, while a gauge oftraffic by prospective buyers increased three points from last
month to44.Though new homes represent only a fraction of the housingmarket, they have an outsize impact on
the economy. Each home builtcreates an average of three jobs for a year and generates about $90,000in tax
revenue, according to data from the homebuilders association.Copyright 2013 The Associated Press. All
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