Affordable borrowing costs are attracting buyers with adequate credit. The average rate on a 30-year fixed mortgage was at 3.56% in the week ended Feb. 21, close to the 3.31% in November that was the lowest in data going back to 1972, according to McLean, Virginia-based Freddie Mac.
Even as Toll Brothers Inc., the largest U.S. luxury-home builder, announced fiscal first-quarter earnings that trailed analyst estimates, the company reported signs of strength in the industry.
“After seven years of trepidation, buyers are reentering the housing market and household formations are increasing,” Robert Toll, the Horsham, Pennsylvania-based company’s chairman and co-founder, said on a Feb. 20 earnings call.
“Low inventories of houses for sale, a limited supply of approved lots, home prices are rising,” Toll said. “Buyers who need to sell one home to move to the next one are more willing and able to make the move. These factors, plus record-low interest rates, are boosting the housing market’s recovery.”
Further housing improvement may depend on stronger gains in employment. Employers added 157,000 workers to payrolls in January after a revised 196,000 rise the prior month and a 247,000 surge in November, Labor Department data showed Feb. 1. Revisions added a total of 127,000 jobs in the last two months of 2012.