One important thing that’s booming in the past month is that homebuilders are more confident with their businesses, because the falling mortgage rates are allowing more people to afford purchases of homes. However, construction firms have stated that they’re still unable to construct new homes to keep up with the demand. People think this has everything to do with buyer demand increasing, but the truth is that it has more to do with the trade issues that we’re ensuing and the rapidly growing economy.
While builder confidence for a single family home rose one point in August, it was still only at 66, which is still a point down from last year according to the Wells Fargo Housing Market Index. Of course, since it’s still above 50 the outlook is considered a positive outcome.
One of the main components is that current sales increased to 73 points and buyer traffic also increased. However, sales expectations is the next six months fell a point. Hither home prices have been the main reason that have lowered the amount of people wanting to buy homes this past year, but now that mortgage rates are falling (almost a whole one percent compared to last year), more home buyers are coming out of the wood works despite single-family housing and permits being purchased are still lower than spring of 2018.
The main reason why home building is lacking is that the economic shift is causing construction prices, as well as the material, labor costs, and other factors to skyrocket, which is making the supply of already built homes for sale is increasing, it makes prices to rise even faster.