“Increased demand driven by recovery in the household formation, employment, and record affordability we’re seeing today,” are signs of the recovery, Cregg said in a June 19 call to discuss the announcement that private equity firm TPG Capital is taking a more than 40% stake in the Scottsdale, Arizona-based company.
Builders such as West Lake Village, California-based Ryland Group Inc., which reported a first-quarter profit for the first time in six years, still see further strides for housing.
“There is no market that is not active today, which is another good sign,” Chief Executive Officer Larry T. Nicholson said in a June 13 presentation.
Confidence among homebuilders rose in June to a seven-year high, the National Association of Home Builders/Wells Fargo index showed June 17. The index rose to 52 from 44 in May, the biggest monthly increase since September 2002, the Washington- based group said.
The average rate on a 30-year fixed mortgage was 3.93% in the week ended June 20, up from a low of 3.31% in November yet below levels seen in the years leading up to the last recession, according to figures from Freddie Mac. The rate averaged 6.42% in 2006 and 6.33% in 2007.
Record monetary stimulus from the Federal Reserve had helped keep borrowing costs low. The Federal Open Market Committee said last week that the bank will keep buying $85 billion bonds a month, for the time being, though Fed Chairman Ben S. Bernanke said the central bank will probably trim purchases later in 2013 and halt them around mid-2014 as long as the world’s largest economy performs in line with Fed projections.
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