US Homebuilder sentiment index posts biggest monthly gain in 5 years.

Thursday 16.04.2009 (17 months ago)
USA :: Property News

Homebuilders in the US are more optimistic that the worst housing downturn in decades may be starting to turn around.

An index of builders' confidence released yesterday, posted its biggest one-month jump in five years as many homebuyers seized on lower prices and incentives and rushed to take advantage of lower interest rates and tax credits.

The National Association of Home Builders housing market index climbed five points to 14 which is the highest since October.

David Crowe, chief economist for the Washington-based trade association.
said: "This is a very encouraging sign that we are at or near the bottom of the current housing depression."

Many builders have stepped up incentives, slashed prices and promoted the $8,000 tax credit for homebuyers enacted in February as part of the Obama administration's economic stimulus package. Mortgage rates have hovered below 5 percent for weeks, offering greater inducement for would-be homebuyers.

As a result, homebuilders report an increase in traffic in recent weeks. Los Angeles based KB Home, reported last month that new home orders rocketed by 26 percent in its fiscal first quarter.

NAHB Chairman Joe Robson, a homebuilder from Tulsa, Okla commented: "Some of the most favorable buying conditions in a lifetime are now in place, and they are drawing more consumers back to the market."

In California, a $10,000 tax credit for new home purchases also lifted sales, according to a national survey of homebuilders conducted by John Burns Real Estate Consulting

The firm's latest survey shows new home sales, buyer traffic and expectation of future sales has risen since March.

"We think the improvement is attributable primarily to improved affordability," said John Burns, the firm's chief executive. "The new home tax credit in California is also helping."

The improved housing outlook has given battered housing stocks a lift. Shares of Beazer Homes and Lennar climbed more than 13 percent in afternoon trading Wednesday.

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