Data released this week covering single-family home building and sales activity, indicate the budding recovery in housing stretched on through the summer months. They explain that “Despite mortgage financing that remains elusive for many buyers, extraordinary rates of affordability have resulted in pent-up demand over time that is becoming more and more difficult to keep at bay.”
They note that according to the National Association of Realtors (NAR), this pent-up demand is now contributing to an upward drift in sales of existing single-family homes and that sales in 2012 would be about 10-15% stronger if all qualified buyers could obtain financing.
They proceed to highlight “a further encouraging sign of recovery: home builder confidence has risen sharply in response to an increase in buyer foot traffic on showroom floors and order backlogs at the nation's largest home builders have accelerated for five straight quarters.”
On Tuesday the NAHB announced that its measure of builder sentiment increased in September to the highest level since June 2006. Data on new home sales will be released next week, Wednesday, 26 September and we expect August sales to have increased by 2.4%.
Overall Zentner and Reid point out that the US Housing market is far from contributing to the broader economy in line with historical norms. However, recent data sets on housing have provided growing signs that the nascent recovery is deepening.