Home Builders Feeling Good
March 28, 2005,
Even though mortgage rates are ticking up slightly, home builders remain bullish about the outlook for home sales, and a gauge of their confidence remained unchanged in March from an upwardly revised February reading.
“Builders have good reason for confidence even as interest rates gravitate upward,” said David Seiders, chief economist of the builders' group. “Demand for new homes still exceeds supply in many markets, while financing conditions remain quite favorable and jobs and incomes are on the rise.”
The average interest rate on long-term mortgages rose about 25 basis points, or one fourth of a percentage point, between the February and March surveys.
Both the current-sales and future-sales indices remained on par with revised February readings of 76 and 79 respectively. The index component gauging traffic of prospective buyers edged up a one point to 51.
“The fact that the Housing Market Index has remained at such a high level and within the same two-point range throughout the past six months is a reflection of the ongoing stability and strength of the nation's housing market,” said Seiders.
Measured on a regional basis, builders in the Northeast were most bullish, their confidence level rising six points to 74, followed by the West, up four points to 83. But confidence slipped by one point in the South, to 73, and by two points in the Midwest, where jobs remain weak, to a level of 53.