Across the United States, home buyers and home builders are gaining confidence in the housing market. As the economy and real estate continue to surge, more people are comfortable taking the needed steps to build, buy and sell houses.
New data released by the National Association of Home Builders showed that builder confidence for new single-family homes rose to 57 on Housing Market Index for July. This number is trending positively and is the third month in a row with an increase, as well as being the highest since January of 2006.
The monthly property data, made available on July 16, showed that the overall housing market is improving. The NAHB asks builders to judge how single-family homes and sales are trending over the next six months, where an index over 50 means more are thinking positively rather than negatively.
"Today's report is particularly encouraging in that it shows improvement in builder confidence across every region as well as solid gains in current sales conditions, traffic of prospective buyers and sales expectations for the next six months," said Rick Judson, chairman of the NAHB. "This positive momentum could be disrupted by threats on the policy side, particularly with regard to the mortgage interest deduction and federal support for the housing finance system."
A major point of confidence centered around the growth of new home construction, which has provided a boost to the overall economy, according to The Associated Press. The demand for homes is rising as well, and in some markets supply hasn't caught up. If new homes are being built successfully, this problem could be fixed in the near future.
Residential sales gaining strength
On a month by month basis, new homes sales are improving. Recent real estate records released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development stated that there was a 2.1 percent increase for May, compared to April. The May seasonally adjusted annual rate of 476,000 is also 29 percent higher than the same period of 2012.
In addition, the average sales price was $307,800, while the median sales price of new homes was $263,900 for May, the Census Bureau reported. These numbers support the growing builder confidence, as many point rising sales as a positive indicator.
"Builders are seeing more motivated buyers coming through their doors as the inventory of existing homes for sale continues to tighten," said David Crowe, Chief Economist of the NAHB. "Meanwhile, as the infrastructure that supplies home building returns, some previously skyrocketing building material costs have begun to soften."