Builders More Optimistic, But Still Worried [AUDIO]
The news from the builders’ front is a mixed bag. They are still not doing the new housing sales volume of former times, but they continue to show optimism that buyers will be coming back.
The National Association of Home Builders says their index of builder optimism has risen.
Analyst Rose Quint says it was 28 in March. The same index was 17 a year ago. Builders expressed more confidence in sales over the next six months. A separate gauge measuring that outlook rose for the sixth straight month, from 34 to 36.
But Quint quickly points out that a 28 remains far below the 50 and above considered healthy builder optimism.
However, Dominic Paragano of the New Jersey Builders Association says they expect the next 12 months to be better. He says he is starting to talk to other people in the construction business, and he says, they are starting to look at land to start new home sites for this season.
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A key reason home builders are more optimistic is that they have seen more people express interest in buying a home. And rising interest has occurred alongside other improvements that suggest the troubled housing market could pick up after four weak years. Mortgage rates are at historic lows. But will that be enough to entice buyers off the sidelines, given all the recent foreclosure scares?
Home prices continue to fall, and builders keep slashing their prices to stay competitive. Last year was the worst for new-home sales on records dating back to 1963.