Homebuilder confidence rose six points in July, according to a new report from the National Association of Home Builders (NAHB). This is the largest recorded increase in a decade. In conjunction, the Home Price Index reached its highest point on Tuesday since March of 2007. According to Business Week this exceeded the most optimistic projection in a Bloomberg News survey of 46 economists.
NAHB chairman Barry Rutenberg stated, “Builder confidence increased by solid margins in every region of the country in July as views of current sales conditions, prospects for future sales and traffic of prospective buyers all improved. This is greater evidence that the housing market has turned the corner as more buyers perceive the benefits of purchasing a newly built home while interest rates and prices are so favorable.”
The industry is being fueled by the record-low mortgage rates and less expensive properties, with many taking advantage of purchasing foreclosed homes. Douglas Yearly, chief executive of luxury homebuilder Toll Brothers, said, “It’s been seven years since this all began to turn down, and you have people that are just ready to move on with their lives, take advantage of great interest rates,” at a June 14th homebuilder conference. “We have all this pent-up demand that has not been in the market. That is coming back out.”