“Builder confidence continues to strengthen along with rising demand for a limited supply of new and existing homes in most local markets,” David Crowe, chief economist at the builders association, said in a statement.
Historically low borrowing costs for homebuyers have climbed over the last three months. The average rate for a 30- year fixed mortgage climbed to 4.4% in the second week of August, up from 3.35% at the start of May, McLean, Virginia-based Freddie Mac said in a statement. The rate reached an all-time low of 3.31% in November.
Housing has been “strengthening, but mortgage rates have risen somewhat, and fiscal policy is restraining economic growth,” the Federal Open Market Committee said July 31 at the conclusion of a two-day meeting in Washington.
Supply constraints in the housing market, an improved employment picture and the attractiveness of homeownership are still on the side of builders even after the run-up in rates, Allan Merrill, chief executive officer of Beazer Homes USA Inc., said on an Aug. 1 conference call. The Atlanta-based company said new home orders fell to 1,381 in the third quarter, which ended June 30, from 1,555 in the same period in 2012, while home closings rose to 1,234 from 1,109.
“While we may not be in the first inning of the housing recovery, we’re still a long ways from the seventh inning stretch,” Merrill said on the call.