U.S. home builder confidence grew last month, despite housing sales remaining at an all time low.
In a report by the National Association of Home Builders (NAHB) released Tuesday, home builder confidence grew five points in May, from 24 to 29 in the Home Builders/Wells Fargo Housing Market Index. The confidence index is at its highest point since May 2007.
“The pace of this emerging recovery could be stronger were it not for the significant impediments that the market continues to face with regard to builder and consumer access to credit, inaccurate appraisals, and more recently, rising materials prices,” NAHB chief economist David Crowe wrote in a press release.
Although builders may be feeling more confident in the housing market, housing sales have remained at an all time low. Sales of new single family houses is at an all time low, according to Reuters.
The U.S. Census Bureau reported that seasonally adjusted housing purchases for March were down 7.1 percent from February, though they are up 7.5 percent from March 2011.
The National Association of Realtors, however, released a first quarter index of housing affordability, which shows that houses are more affordable than they have ever been since record keeping began in 1970.
Housing foreclosures across the country are declining, including in the California Central Valley, one of the hardest hit housing markets in the country. The Central Valley Business Times reports that foreclosures are down 68.8 percent from the height in April 2009.
The Demand Institute, a think tank operated in conjunction with non-partisan research organizations The Conference Board and Nielsen, argues that after five and half years, the housing market may be finally growing again.
The report envisions a two-part recovery, with the market growing at a modest rate of “1 percent in the second half of 2012, rising to an annual rate of increase of 2.5 percent by 2014,” then more quickly from 2015 to 2017, “by 3 to 3.5 percent a year on average.”
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