The latest U.S. homebuilder survey reflects growing optimism among builders – a sentiment shared in the Albuquerque area – that new-home sales are on an upswing again after hitting the lowest point in a half-century last year.
The National Association of Home Builders/Wells Fargo builder sentiment index surged six points this month to 35, the highest reading since March 2007, the trade association said Tuesday. While any reading below 50 indicates negative sentiment about the market, the index hasn’t reached that level since April 2006, the peak of the housing boom.
Albuquerque-area builders share a guarded optimism, said Jim Folkman, executive vice president of the Home Builders Association of Central New Mexico.
“I am happy to report that they are increasingly, but still cautiously, optimistic that things may beginning to turn around,” he told the Journal. “We still have a long ways to go, but between record low interest rates and highly attractive prices for new homes, the market seems to be on the rebound, and as the housing industry improves that will only lend continued support to Albuquerque’s economy overall.”
Nationally in July, builders say they observed the best sales levels since February 2007. Their outlook for sales in the next six months also brightened to the highest level since March 2007. Turnout by prospective buyers also returned to a level not seen in five years.
Cheaper mortgages and lower home prices in many markets have made homebuying more attractive. Many economists believe that housing construction could contribute to overall economic growth this year for the first time since 2005.
Another Albuquerque construction official said the overall economy and public spending on construction needs to improve to support any housing gains.
“This pattern of rising private spending and falling public spending is likely to persist, but there should be concern that private spending momentum may begin to abate if the broader macro economy does not begin to re-accelerate,” said Roxanne Rivera-Wiest, president of Associated Builders and Contractors of N.M.
— This article appeared on page B1 of the Albuquerque Journal