Estimates of the 51 economists in the Bloomberg survey ranged from 40 to 45. The index, first published in January 1985, averaged 54 in the five years leading to the recession that began in December 2007. It reached a record low of 8 in January 2009.
The confidence survey asks builders to characterize sales as good, fair or poor and to gauge prospective buyers’ traffic. It also asks participants to assess the six-month outlook.
Builder confidence improved in three of the four U.S. regions. Companies in the Northeast had a 10-point jump, from 31 to 41 in May. Confidence improved in the Midwest from 40 to 45 and in the South, rising from 40 to 44. Sentiment fell in the West, from 52 to 41.
Builders started work on 780,000 homes last year, a 28% increase from 2011 and the most in four years. Nonetheless, construction of new homes remains below the 2.07 million reached in 2005, the peak of the housing boom.
Inexpensive borrowing costs are helping to attract would-be homebuyers. The average rate on a 30-year, fixed-rate purchase loan was 3.42% for the week ending May 9, down from 3.83% a year ago, according to McLean, Virginia-based Freddie Mac. The 30-year rate reached a record low of 3.31% in November.