Homebuilder confidence at 6-year high, home loans at 16-year low
Things are looking up for homebuilders, who are in their best collective mood in six years, according to an index from the National Assn. of Home Builders and Wells Fargo.
In September, a gauge of builder sentiment rose to 40 from 37 in August, reaching the highest reading since June 2006. The index has risen for five straight months.
A measure of their expectations for the next six months rose to 51, up from 43 to another six-year high.
Any reading above 50 represents positive feelings about the housing market for new, single-family homes.
Barry Rutenberg, chairman of the builders group, said the report “provides further assurance that the housing market is moving in a positive direction, but there’s still a long way to go on the road to recovery and several obstacles are slowing our progress.”
To wit: tight credit conditions that keep many projects from starting and discourage buyers from signing. Though the Federal Reserve recently announced a stimulus plan to help push down mortgage interest rates, many Americans continue to struggle with high rates and the inability to get new loans, according to economists.
The volume of home lending in the U.S. dropped 10% last year to the lowest level since 1995, the Federal Financial Institutions Examination Council revealed Tuesday.
Last year, 7.1 million home loans were made – with mortgages and refinancings both slipping. A key tax incentive for new home buyers expired in April 2010.