A sign of economic recovery, housing starts rebounded in May and the housing market index is keeping a steady course this month. A combination of low-interest rates and increasing house values is driving this positive trend, and home builders are confident about market conditions, according to a June 17 report from the National Association of Home Builders (NAHB).
“Home builders certainly have good reasons to be confident,” noted Gary Garczynski, president, NAHB, Woodbridge, Va., adding that the 6.7-percent long-term mortgage rate is influencing buyers. However, he also pointed out that builders still express concern over the lack of affordably-priced lots available for first-time homeowners. This might create a building barrier for some prospective buyers.
Meanwhile, the single-family housing market maintains strong presence, with forecasts predicting about 1.3 million single-family housing starts compared to 1.27 million recorded starts recorded last year, the report pointed out. “…The single-family housing market should continue to provide good support to the economy as the budding cyclical recovery moves ahead,” said David Seiders, chief economist for NAHB.
The Commerce Department’s reports buttress this information, noting the solid gains in housing production in all regions of the country. According to the report, housing starts increased 11.6 percent in May, and the future looks just as promising. “It’s good to see that the housing market is back up to its first-quarter pace after some slippage in March and April – the ‘payback months’ following unusually good weather conditions, which spurred exceptionally strong production in the first part of the year,” Garczynski said.
The author is Managing Editor – Special Projects for Lawn & Landscape magazine and can be reached at khampshire@lawnandlandscape.com. Information compiled from NAHB press releases.