As the summer homebuying season heats up, home builders are relieved to see buyers returning to the market. In the largest monthly increase ever in NAHB/Wells Fargo Housing Market Index, builder sentiment jumped a whopping 21 points in June to 58, according to CNBC. The index for homebuying traffic also jumped substantially, more than doubling to 43. Pent-up demand, low interest rates, and stable housing prices are a perfect storm for a successful summer season as long as the pandemic is kept at bay. Though it will still take time to make up for lost closings, this stronger than expected rebound is soothing builders’ nerves for the future.
Builder sentiment jumped a striking 21 points in June to 58, the largest monthly increase ever in the National Association of Home Builders/Wells Fargo Housing Market Index. Any reading above 50 indicates a positive market. In April, it plunged a record 42 points to 30.
“As the nation reopens, housing is well-positioned to lead the economy forward,” said NAHB Chairman Dean Mon, a homebuilder and developer from Shrewsbury, New Jersey. “Inventory is tight, mortgage applications are increasing, interest rates are low and confidence is rising.”
Meanwhile, mortgage applications to purchase a newly built home jumped 10.9% annually in May, according to the Mortgage Bankers Association.