America’s homebuilders are growing more bullish as buyer demand picks up, driven in part by slightly lower mortgage rates.
Homebuilder confidence in the market for newly built single-family homes in February rose 7 points to 42, according to the National Association of Home Builders/Wells Fargo Housing Market Index. This is the highest reading since September and the largest monthly gain since June 2013.
Builders say affordability is improving, as mortgage rates fall back from their highs of last fall and start to settle in a narrow range. The average rate on the popular 30-year fixed mortgage had peaked at 7.37% last October, according to Mortgage News Daily but spent much of January in the low 6% range. Rates have moved up slightly in the past two weeks to the mid-6% range.
“With the largest monthly increase for builder sentiment since June 2013, the HMI indicates that incremental gains for housing affordability have the ability to price-in buyers to the market,” said NAHB Chairman Alicia Huey, a homebuilder and developer from Birmingham, Alabama. “The nation continues to face a sizeable housing shortage that can only be closed by building more affordable, attainable housing.” Read More