NEW YORK (Dow Jones)–Shares of home builders pared their losses slightly on data showing builder confidence in the market for new-home sales rose to its highest level in nearly three years.
The National Association of Home Builders/Wells Fargo Housing Market Index gained 3 points to 22 in May, its highest point since August 2007 and up for a second consecutive month despite a government subsidy for buyers ending April 30. Economists surveyed by Dow Jones Newswires expected a reading of 20.
Wall Street Strategies analyst David Urani said the data were a little surprising, but the shares may not have reacted much because the data likely still reflect the expiring government tax credit, which has been boosting sales.
"The government gave buyers some time through June to finish purchases, so we might see some of that in the data," Urani said. He added that while some home building data have been positive, there are still many points of concern, including negative foreclosure data last week.
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