Is the Housing Market Looking Up? Good News from Home Builders Finance Advice

21
Jul

Is the Housing Market Looking Up? Good News from Home Builders

What’s going on with the economy? What’s up with the housing market? Seems we keep getting mixed signal across sectors. One silver lining to all the confusion is that mortgage rates remain quavering at lows for the year.

But wait! In this cloudy mist of confusion there is a bright beam of hope coming from one area of the market in this week’s economic reports. Two solid bits of positive news for the housing industry came from the National Association of Home Builders (NAHB), leading us to speculate that maybe, just maybe, things are looking up after all.

Housing Starts Trend Upward

According to figures released by the U.S. Commerce Department this week, housing starts rose 14.6 percent nationwide to a seasonally adjusted annual rate of 629,000 units in the month of June. Maybe that doesn’t seem like a lot, but consider that this was the best pace of housing production since the beginning of the year. And starts activity was up across every region of the country, with the Northeast posting a 35.1 percent gain, the Midwest posting a surprising 25.3 percent gain, the South posting a 10.6 percent gain, and the West posting a respectable 5.4 percent gain.

“Today’s numbers are an encouraging sign that builders are responding to improving consumer interest in new homes and apartments by gradually replenishing their extremely thin inventories in places where demand is evident,” said Bob Nielsen, chairman of NAHB and a home builder from Reno, Nev.

There’s also some pretty good evidence that demands for rentals are on the upswing.

NAHB Chief Economist David Crowe said, “The latest housing production figures show broad-based gains on both the single-family side and in multifamily apartment construction, where we know that demand has been increasing due to the influx of renters in the market.”

Builder Confidence Rebounds

In other positive news, builder confidence was up for July, according to the NAHB/Wells Fargo Housing Market Index, also released this week. The index is based on a monthly survey that gauges builder opinions of current single-family home sales and sales expectations for the next six months.

According to the index, confidence in the market for newly built, single-family homes rose two points to 15. The gain offsets a three-point dip recorded in June.

“The improvement in builder confidence in July is a positive sign that the outlook perhaps isn’t quite as bleak as was feared in June,” said Nielsen. “While builders continue to confront serious challenges with regard to competition from foreclosed properties that are priced below replacement cost, inaccurate appraisals of new homes, and a very restrictive lending environment for new home construction, select markets are showing gradual improvement as consumers begin to take advantage of very favorable buying conditions.”

These positive reports seem to suggest a rebound in the new construction sector of the housing market, despite increased foreclosures and other gloomy indicators. Naturally, we’ll be watching closely for other signs of improvement (or lack thereof), and keeping you informed as the housing market drama continues to unfold.

Tags: builders Construction Featured glimmers good news happy place home builders homebuilders houses Housing Housing Industry Housing Market Housing Starts marketing nahbgreen national association National Association of Home Builders positive news Quicken Loans Real Estate Real Estate Economics

About Rebecca Carter

No one is sure where Rebecca came from. One day she just showed up and starting writing. Since she only requires unlimited amounts of green tea to operate, we decided to keep her. A self-described word nerd, she is also a tireless penny-pincher. You’ll often find her deep in research, nursing fantasies of saving the world – or at least saving the world some money – one blog post at a time. View all posts by Rebecca Carter →

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