Sales of existing homes are recovering slowly, but a drop in supplies of those homes is pushing confidence among the new home builders to a six year high.
There are just 2.1 million existing homes for sale, which is a 22 percent drop from a year ago, according to the National Association of Realtors (NAR). Much of this is due to a drop in foreclosed and distressed homes, as lenders try to modify troubled loans more aggressively.
"In view of the tightening supply and other improving conditions, many potential buyers who were on the fence are now motivated to move forward with a purchase in order to take advantage of today's favorable prices and interest rates," wrote Berry Rutenberg, chairman of the National Association of Home Builders in a release Monday.