Builder sentiment jumped six points in August to 78, matching a record high set in 1998, according to cnbc.com. Any reading above 50 indicates a positive market; the National Association of Home Builders/Wells Fargo Housing Market Index had plunged to 30 in April.
Of the homebuilder index’s three components, current sales conditions jumped six points to 84; sales expectations in the next six months rose three points to 78; and buyer traffic rose eight points to a record 65.
Additionally, mortgage applications to purchase a newly built home jumped 39% annually in July.
Builders attribute the increase to record-low mortgage rates, people wanting to move to the suburbs and the short supply of existing homes for sale. However, they say the surge in lumber prices could slow momentum for the housing recovery.
