Builder confidence in newly built single-family homes rose for the third consecutive month in March, according to the National Association of Home Builders/Wells Fargo Housing Market Index that was released This Week in Real Estate. Single-family housing starts increased 1.1% while single-family permits rose 7.6% last month, respectively. Mortgage applications grew for the second week in a row, up 6.5% this week from last week’s 7.4% increase according to the Mortgage Bankers Association. Below are a few newsworthy events from the second week of March that influence our business:
U.S. Single-Family Housing Starts, Building Permits Rebound in February. Homebuilder confidence in the market for newly-built single-family homes in February rose 7 points to 42, according to the National Association of Home Builders/Wells Fargo Housing Market Index. This is the highest reading since September and the largest monthly gain since June 2013. Builders say affordability is improving, as mortgage rates fall back from their highs of last fall and start to settle in a narrow range. “With the largest monthly increase for builder sentiment since June 2013, the HMI indicates that incremental gains for housing affordability have the ability to price-in buyers to the market,” said NAHB Chairman Alicia Huey. “The nation continues to face a sizeable housing shortage that can only be closed by building more affordable, attainable housing.” “Even as the Federal Reserve continues to tighten monetary policy conditions, forecasts indicate that the housing market has passed peak mortgage rates for this cycle,” said NAHB’s chief economist, Robert Dietz. “And while we expect ongoing volatility for mortgage rates and housing costs, the building market should be able to achieve stability in the coming months, followed by a rebound back to trend home construction levels later in 2023 and the beginning of 2024.” Read the full story here.
Mortgage Demand Rises Despite Volatile Interest Rates. Demand for mortgages increased for the second straight week, despite some volatility in mortgage rates. Total application volume rose 6.5% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Despite rates being higher, mortgage applications to purchase a home rose 7% for the week. Applications to refinance a home loan increased 5% from the prior week. Read the full story here.
Home Builder Sentiment Rises For Third-Straight Month Amid Tight Inventories. Confidence among U.S. homebuilders rose slightly in March, the third-straight month builders have increased their optimism about the U.S. housing market. Builder sentiment in March climbed across all regions in the Northeast, Midwest, South, and West. “Even as builders continue to deal with stubbornly high construction costs and material supply chain disruptions, they continue to report strong pent-up demand as buyers are waiting for interest rates to drop and turning more to the new home market due to a shortage of existing inventory,” said NAHB Chairman Alicia Huey. The group’s measure of current sales conditions increased in March and the gauge of upcoming buyer traffic also advanced, marking the strongest traffic read since September of 2021. Read the full story here.
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