The National Association of Home Builders (NAHB) this week released its economic index report, showing that of the 351 metro markets tracked, 300 have seen year-over-year economic gains.
As such, NAHB is optimistic that the economic recovery will continue to gain momentum during the remainder of this year.
The report was released the same week that the Mortgage Bankers Association released figures showing that mortgage application volume for home purchases increased 9% during the week ending May 2.
The NAHB index shows that 59 metros have fully returned to or even exceeded their last normal levels of economic and housing activity. The nationwide economic score rose slightly to .88 from a revised April reading of .87.
This means that based on current permit, price and employment data, the nationwide average is running at 88% of ‘normal’ (i.e., pre-crisis) economic and housing activity. The index showed an overall reading of .82 a year ago.
‘We have always said this recovery would be a slow but steady one, and I think this index continues to prove this,’ says David Crowe, chief economist for NAHB, in a release. ‘The year started a bit slower than anyone could have anticipated, but we still expect housing to play a greater role in aiding the overall economic recovery this year. The job market continues to mend and that should spur a steady release of pent-up demand among home buyers.’
Kevin Kelly, chairman of NAHB, says home builders ‘are starting to see more optimism in the field.’
‘Mortgage rates are low, home prices are affordable and with the harsh winter behind us, our latest surveys show builders are feeling more bullish about future sales conditions,’ Kelly says.
‘We keep waiting for the economy to shift into a higher gear,’ adds Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report. ‘This report, along with other recent economic news, may mean we are finally there.’
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