Last Week in Review: Home Builders and Homebuyers Feeling Really Good
This past week, the National Association of Home Builders (NAHB) reported that their Sentiment Index for June rose sharply to 72, thereby lifting the index to exactly where it was in March, prior to COVID-19.
Within the report there were sharp increases in the following three components:
- Sales conditions
- Sales expectations
- Buyer traffic
Builders in the Northeast and Midwest are seeing a surge in demand after being sidelined from COVID-19.
One of the interesting parts of the report came from Robert Dietz, NAHB's chief economist, who shared this, "Nonetheless, the important story of the changing geography of housing demand is benefiting new construction. New home demand is improving in lower density markets, including small metro areas, rural markets, and large metro exurbs, as people seek out larger homes and anticipate more flexibility for telework in the years ahead. Flight to the suburbs is real."
On top of this great housing story, Freddie Mac reported that the average 30-year mortgage hit an all-time low of 2.98%, making homebuyers feel very good.
Bottom line: Housing will continue to shine for the foreseeable future as low rates, household formation, migration to suburbs, and flexibility to work remotely provide a tailwind.
