Home builder sentiment in the market for newly built homes rose for the fourth straight month in April, as a lack of existing homes drove up demand for new-construction projects. The National Association of Home Builders/Wells Fargo Housing Market Index rose one point to 45 in April, and although anything below 50 is considered negative, the latest reading is the highest since September, CNBC reports.
New listings of existing homes are down 25% compared with a year ago, and slightly lower mortgage rates are also boosting demand in the new-home market.
“Builders note that additional declines in mortgage rates, to below 6%, will price-in further demand for housing,” said Alicia Huey, NAHB chairman and a custom home builder and developer from Birmingham, Alabama.
Builders said one-third of housing inventory is new construction, compared with historical norms of around 10%. Concerns had grown that builders might have more trouble with construction loans after recent regional bank failures.
But the bevy of new construction suggests that is not the case.
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