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The latest builder confidence index, based on responses from 290 builders, reflects the healthier sales trends many homebuilders are enjoying. A gauge of current sales conditions rose four points to 48, the highest level since March, while a measure of traffic by prospective buyers improved three points to 33. Builders' outlook for sales over the next six months rose one point to 53, the highest reading since February 2007. Even so, homebuilders continue to grapple with the legacy of the housing downturn. During the roughly six years since the housing bubble burst, some 1.4 million residential construction jobs vanished, while land development
-- when raw land is prepared for home construction -- slowed sharply. In addition, suppliers of building materials sharply reduced their stockpiles and have been slow in adjusting to the resurgent demand for lumber and other goods. That translates to higher construction costs and heated competition for ready-to-build land. Many builders also are paying more for labor, because many of the subcontractor firms that builders rely on are scrambling to find experienced workers, many of which have long since moved on to other types of jobs. In addition, many smaller builders also are having a difficult time getting loans to buy land.
Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB statistics.
[Associated
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