Home builders are more confidentabout their market today than they have been in over four years.
Buyer traffic, current sales, and sales expectation are all improving, at least according to the latest sentiment indexfrom the National Association of Home Builders. The index has in fact doubled since September, despite the fact that it is still well below the line between positive and negative.
Despite this being the fifth straight month of improvements, the NAHB’s chief economist is being very cautious:
“It is important to remember that the HMI is still very low, and several factors continue to constrain the market. Foreclosures are still competing with new home sales, and many builders are seeing appraisals come in at less than the cost of construction. Additionally, prospective home buyers are finding it difficult to qualify for a mortgage,” writes David Crowe in a news release.
He has reason to be cautious.