Vertical Research Advisory managing partner Kip Herriage analyzes the housing market and forecasts the future of home prices on 'Making Money.'increased more than expected in April as declining mortgage rates and low inventory helped drive demand higher for new homes.
The National Association of Home Builders/Wells Fargo Housing Market Index, which measures the pulse of theDespite the increase, the index still points to a slump in the housing sector ahead of the pivotal spring-selling season. Any reading above 50 is considered positive; prior to 2022, the gauge has not entered negative territory since 2012, excluding a brief – but steep – drop in May 2020.
"For the fourth straight month, builder confidence has increased due to a lack of resale inventory despite elevated interest rates," said Alicia Huey, the NAHB chair and a custom home builder and developer from Birmingham, Alabama. "Builders note that additional declines in mortgage rates, to below 6%, will price-in further demand for housing."The index has fallen to half of what it was just one year ago, when it stood at 81, although it has increased from a low of 31.
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