Builder Confidence Up as April Housing Starts Rise 2.6 Percent
Nationwide housing production gained 2.6 percent from an upwardly revised pace in March to hit a seasonally adjusted annual rate of 717,000 units in April, according to newly released figures from the U.S. Census Bureau and HUD. This modest gain was seen in both the single- and multifamily sectors, which registered growth of 2.3 percent and 3.2 percent, respectively. At almost the same time, builder confidence in the market for newly built, single-family homes gained five points in May to reach a level of 29 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. This is the index's strongest reading since May of 2007
"Builders in many markets are reporting that buyer traffic and sales have picked back up after a pause this April," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "It seems we have resumed the gradual upward trend in confidence that started at the beginning of this year, as stabilizing prices and excellent affordability encourage more people to pursue a new-home purchase."
"While still less than half the pace of what we would expect in a fully healthy market, the rate of housing production in April was very solid for this point of the recovery and in keeping with the findings of our latest builder surveys that have registered modest improvements in buyer traffic and near-term sales expectations for single-family homes," said NAHB Chief Economist David Crowe.
"While home building still has quite a way to go toward a fully healthy market, the fact that the HMI has returned to trend is an excellent sign that firming home values, improving employment and low mortgage rates are drawing consumers back," said NAHB Chief Economist David Crowe. "The pace of this emerging recovery could be stronger were it not for the significant impediments that the market continues to face with regard to builder and consumer access to credit, inaccurate appraisals, and more recently, rising materials prices."
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