WASHINGTON - Confidence among U.S. homebuilders improved in May for the first time in five months as buyers rush to take advantage of near record-low mortgage rates.
The National Association of Home Builders/Wells Fargo index of builder confidence rose to 44 from a revised 41 in April, the Washington-based group reported today. The median forecast in a Bloomberg survey called for an increase to 43. Readings below 50 mean more respondents said conditions were poor.
“Builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates and strengthening local economies,” said Rick Judson, chairman of the trade group and a builder from Charlotte, N.C. “This is definitely an encouraging sign.”
Low mortgage rates, a strengthening job market and limited inventories are benefiting builders, including PulteGroup Inc. and Lennar Corp. as the housing market contributes to growth this year after emerging as a bright spot in 2012. Gains in housing will help the world’s largest economy move through a global slowdown that is hurting manufacturing.
Another report today showed industrial production declined in April by the most in eight months, reflecting broad-based cutbacks in manufacturing that show factories will provide little support for the economy.
Stocks trimmed earlier losses after the builder confidence report. The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,649.52 at 10:02 a.m. in New York. It closed at a record 1,650.34 yesterday.
Output at factories, mines and utilities fell a more-than-forecast 0.5 percent after a revised 0.3 percent gain in the prior month that was weaker than previously reported, a report from the Federal Reserve showed today in Washington. The median forecast in a Bloomberg survey called for a 0.2 percent decline. Manufacturing, which makes up 75 percent of total production, unexpectedly fell 0.4 percent, the third drop in four months.