Builder Confidence Rises as Housing Recovery Picks Up Pace
Builder confidence increased Monday as housing recovery continues its steady pace.
According to the National Association of Home Builders, the index measuring builders’ confidence jumped to 52 in June. It was the highest it’s been in seven years. An index of more than 50 typically signifies strong building conditions.
Construction slumps are usually seen in June as spring buying reaches its peak. However, the recent report show that more builders are doing their jobs generally brought about by positive housing values in May.
To put things in perspective, almost 50 percent of builders are seeing a good atmosphere in the current housing market. This was in contrast to the 15 percent last year.
There are several signs that point directly to the recovering housing market. The spike in foreclosure drops and jumps in home prices, as well as resales and increased demand, all contribute to the pace of the recovery. Even the recent increase in mortgage rates didn’t hinder the steady growth of the housing market.
Increasing mortgage rates discourages refinancing. Lenders are looking for alternatives now that a refi crutch is on its way and they are foreseen to slightly loosen their tight mortgage requirements to attract more capital and borrowers.