Builder sentiment jumped 14 points in July to 72, returning to where it was in March before the pandemic hit, according to cnbc.com. Any reading above 50 indicates a positive market; the National Association of Home Builders/Wells Fargo Housing Market Index had plummeted to 30 in April.
“Builders are seeing strong traffic and lots of interest in new construction as existing home inventory remains lean,” said NAHB Chairman Chuck Fowke, a builder from Tampa, Fla. “Moreover, builders in the Northeast and the Midwest are benefiting from demand that was sidelined during lockdowns in the spring. Low interest rates are also fueling demand, and we expect housing to lead an overall economic recovery.”
Of the homebuilder index’s three components, current sales conditions jumped 16 points to 79; sales expectations in the next six months rose 7 points to 75; and buyer traffic rose 15 points to 58.
Additionally, mortgage applications to purchase a newly built home jumped 50% annually in June.
Although builders are thrilled with the rebound, they also are surprised and largely unprepared as most either shut down or severely limited operations in March and April and now are trying to catch up.
