The nation’s homebuilders appear to be more confident about the future of residential construction than they have been in five years of real estate downturn.
January’s index measuring builder confidence reached 25, a place it hasn’t been since June 2007. It was the fourth month of increases in the NAHB/Wells Fargo Housing Market Index.
Officials of the National Association of Home Builders suggest that we not break out the bottles of bubbly yet. “Caution remains the word of the day,” said association chief economist David Crowe, as many of the longstanding problems, including tight credit for buyers and construction, remain unresolved.
That said, mortgage applications were 23.1 percent higher last week than the previous one (adjustments were made for the New Year’s holiday), the Mortgage Bankers Association said today. Refinancings, spurred by falling fixed rates, rose 26.4 percent to its highest level in the last six months.
For the second consecutive December, the index used to measure billings for architectural services showed an “overall increase in demand for design services,” the American Institute of Architects reported.
Again, AIA chief economist Kermit Baker urges caution: "We saw nearly identical conditions in November and December of 2010, only to see momentum sputter and billings fall into negative territory as we moved through 2011, so it's too early to be sure that we are in a full recovery mode.”