Housing market optimists picked up another bullish datapoint this morning, as the National Association of Homebuilders (NAHB)/Wells Fargo builder confidence index rose to 16 from 14 last month. According to Bloomberg, that’s the highest reading since last September.

So what happened the last time builders felt this good about their prospects? Lehman Brothers went belly up, Washington Mutual and Wachovia collapsed into the arms of JP Morgan Chase and Wells Fargo, respectively, and the financial system nearly imploded. Sure, history is unlikely to repeat itself, but using this measure to try and predict the future is like trying to predict the weather 6 months in advance: An experiment in futility.

According to NAHB Chairman Joe Robson, “Builders are responding to what they perceive to be some of the best home buying conditions of a lifetime.” Here, Robson is echoing his sentiments from March and April, even as property values continue to fall.

Tags: home prices, NAHB, Robson, sentiment

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