US homebuilder confidence vaults to 5-year high

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Confidence among U.S. homebuilders is swelling to a five-year high, with many now anticipating that sales of new homes will strengthen this year even as signs point to a slowing economy.

The National Association of Home Builders/Wells Fargo builder sentiment index surged six points this month to 35, the highest reading since March 2007, the trade association said Tuesday.

The index, which is based on responses from 318 builders, rose from a reading of 29 last month, marking the largest one-month gain in nearly a decade. It has declined only once between January and July.

Any reading below 50 indicates negative sentiment about the housing market. And the index hasn't reached that level since April 2006, the peak of the housing boom.