Lower Mortgage Rates a Boost for Builder Confidence in August - 8/23/2004 - Mortgage Loan Refinance Debt Equity

Lower Mortgage Rates a Boost for Builder Confidence in August

NAHB President Bobby Rayburn said that a decline in mortgage interest rates — from 6.29% in June to 6.05% in July and below 6% this month — “undoubtedly helped push builder optimism to its highest level since October of 2003 as potential buyers who might have been sitting it out started diving back into the market when rates headed downward.”

Citing a favorable climate for home finance and solid house-price performance, Rayburn added that, “We have good reason to expect continued strength in the housing market in the months ahead.”

The HMI is derived from a monthly survey of builders that NAHB has been conducting for almost 20 years. Home builders are asked to rate current sales of single-family homes, their expectations of sales for the next six months and traffic of prospective buyers. Those component indexes all rose in August — to 76, 78 and 57, respectively.

Any number over 50 indicates that more builders view sales conditions as good than poor.

The index for this month found that builders were the most optimistic they have been since last November about prospects for sales over the next half-year. And the index for prospective traffic reached its second highest level ever.