Confidence eased among builders in three of the four U.S. regions. Builders in the Midwest reported an increase in sentiment. Confidence fell to 2 points in March to 57 in the West, dropped 2 points in the Northeast to 39 and decreased 2 points in the South to 42. Sentiment in the Midwest climbed by 5 points to 50.
Builders began work on about 780,000 homes last year, a 28.1% increase from 2011 and the most in four years. Even with the gain, housing starts remain well below the 2.07 million in 2005 at the peak of the housing boom.
Cheaper borrowing costs are attracting home buyers who have adequate credit. The average rate on a 30-year fixed purchase loan was 3.63% last week, compared with 3.92% a year ago, according to McLean, Virginia-based Freddie Mac. The 30-year rate reached a record low of 3.31% in November.
Some areas of the country continue to struggle. New York, New Jersey, Florida and Nevada are among 16 states that reported an increase in foreclosure starts in February, according to RealtyTrac Inc., a data company based in Irvine, California.
AV Homes Inc., a developer based in Poinciana, Florida, that specializes in adult communities, reported a fourth-quarter loss driven by falling property values in Florida and Arizona. Still, the company is purchasing land for new developments as buyers return to the market, President and Chief Executive Officer Roger Cregg said.
“The value of their largest asset, their home, has diminished and that has caused them to lose confidence and delay their move and purchase of another home,” Cregg said on a March 15 earnings call. “We believe that as home values continue to rise, they will regain their confidence and be returning to the market.”