US homebuilder sentiment improves in August

US homebuilder sentiment rebounded after hitting an eight-month low in July.

The National Association of Homebuilders' housing market index jumped by four points in August to reach 68%, easily surpassing economists' forecasts for a reading of 65%.

"Our members are encouraged by rising demand in the new-home market. This is due to ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence," said NAHB chairman Granger MacDonald.

All key components of the HMI saw an improvement, with a gauge linked to current sales conditions gaining four points to 74%, while another charting sales expectations over the following six months was up by five points to 78%.

The other main subindex, which tracks buyer traffic, ticked up by one point to 49%.

Sentiment surged after the presidential election in November as builders had hoped that the incoming president would institute more relaxed regulations, but has since cooled off.

"The five-point drop in the headline index between May and July was hard to explain, given the rising trend in mortgage applications, so this rebound isn't as anomalous as it might appear.

"The headline index tends to slightly to lead single-family housing starts, and it now points to a dip over the next couple of months, followed by a rebound in the early fall. The net trend looks about flat, as it has been since late last year," said Ian Shepherdson at Pantheon Macroeconomics.