WASHINGTON -- Confidence among U.S. homebuilders rose this monthto its highest level in six and a half years, driven by strong demandfor newly built homes and growing optimism that the housing recoverywill strengthen next year, according to a widely followed private surveyout Monday.
The National Association of Realtors also said Mondaythat sales of previously occupied homes rose solidly in October, helpedby improvement in the job market and cheap mortgages.
Sales rose2.1% to a seasonally adjusted annual rate of 4.79 million. That's upfrom 4.69 million in September, which was revised lower. The sales paceis roughly 11% higher than a year ago. But it remains below the morethan 5.5 million that economists consider consistent with a healthymarket.
Superstorm Sandy delayed some sales in the Northeast, theRealtors' group said. Sales fell 1.7%, the only region to show adecline. Most of the drop was due to the storm, but those sales willlikely be completed in future months, the group said.
As forhomebuilder sentiment, the National Association of Home Builders/WellsFargo builder sentiment index increased to 46, up from 41 in October.That's the highest reading since May 2006, just before the housingbubble burst. Readings below 50 suggest negative sentiment about thehousing market. The index last reached that level in April 2006. Stillit has been trending higher since October 2011, when it stood at 17.
Ameasure of current sales conditions rose this month by 8 points to 49,the highest level since May 2006. The survey is based on responses from417 builders.
There have been other positive signals from thehousing market. Applications for mortgage loans to buy homes jumped 11%the week ended Nov. 9, compared with a week earlier, the MortgageBankers' Association said last week. Purchase applications are up 22% inthe past year.
Foreclosures are slowing. The number of propertiesthat began the foreclosure process in the first 10 months of the yearfell 8% compared with the same period last year, RealtyTrac said lastweek.
Home prices have been rising steadily, though they remainlower than they were six years ago. And builders broke ground on newhomes and apartments at the fastest pace in more than four years inSeptember. The jump could help boost the economy and hiring.
Still,the market has a long way back to full health. Many potential homebuyers cannot meet stricter lending standards or produce larger downpayments required by banks.
Federal Reserve Chairman Ben Bernankesaid Thursday that banks' overly tight lending standards may bepreventing sales and holding back the U.S. economy.
Meantime, Lowe's (LOW)said Monday that its third-quarter net income surged 76%, helped bylower costs and higher revenue, as the company's efforts to revamp itsmerchandise and prices appeared to be gaining traction.
Itsadjusted earnings without charges and its revenue both beat Wall Streetforecasts. Its shares were up 7% in trading Monday. Its shares peakedfor the past year at $33.63 on Nov. 2 and traded as low as $22.39 lastNovember.
Lowe's has been retooling its pricing strategy, and lastsummer returned to offering permanent low prices on many items acrossthe store, instead of offering fleeting discounts. But the changes havebeen slow to catch on, and last quarter Lowe's said it could take untilthe middle of next year to reap the benefits of the strategy.
"Weare keenly focused on improving our core business," said CEO Robert A.Niblock. "Our level of execution is improving and we delivered solidresults in the third quarter."
The results are also the latestindication that home-improvement retailers and other housing-marketrelated companies are benefiting from the beginning of a rebound in thehousing market, with home prices and home sales growth both improving.
Lastweek rival Home Depot reported slightly higher third-quarter net incomeand the company raised its full-year forecast. Home Depot alsobenefited from a surge in sales late in the quarter from SuperstormSandy preparations. Lowe's did not point to any benefit from the stormin its earnings release.
Lowe's earned $396 million, or 35 centsper share, for the three months ended Nov. 2. That compares with $225million, or 18 cents per share, a year ago.
The current quarterincludes charges that lowered earnings by 5 cents per share. In theprior-year period, charges reduced earnings by 18 cents per share.
The adjusted earnings of 40 cents per share beat the 36 cents per share that analysts polled by FactSet predicted.
Revenue rose 2% to $12.07 billion from $11.85 billion. That also beat Wall Street's estimate of $11.93 billion.
Revenueat stores open at least a year, a key gauge of a retailer's health,increased 1.8%. At its U.S. stores, the metric climbed by the same%agerate. This figure excludes results from stores recently opened orclosed.
For fiscal 2012, Lowe's still expected earnings of about$1.64 per share and revenue to be approximately the same as 2011's$50.21 billion. Analysts forecast earnings of $1.66 per share on revenueof $50.1 billion.
Lowe's Cos., which is based in Mooresville, N.C., has 1,750 stores in the U.S., Canada and Mexico.