U.S. builders are in a merry mood with confidence spiking to a 20-month high.
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"The housing rebound that began in the spring continues, supported by low mortgage rates, solid job growth and a reduction in new home inventory" according to the National Association of Home Builders/Wells Fargo Housing Market Index.
Builders are being encouraged to build by one of the most attractive periods for house-hunters in many years. The average 30-year fixed rate for a mortgage fell to one of the lowest rates of the year last week, and that has led to a surge in mortgage applications.
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The 30-year mortgage dropped to 3.57%, according to mortgage giant Freddie Mac. And applications rose 5.2% in the past week, according to the most recent data from the Mortgage Bankers Association’s Weekly Mortgage Application Survey.
Growth was driven by the South and West regions of the nation. While the Northeast posted a more modest increase.
The data reinforces a rebound in the housing market. Existing home sales in August rose to a 17 month high, as tracked by the National Association of Realtors to an annual rate of 5.49 million in August. Overall sales are up 2.6% from a year ago.
“As expected, buyers are finding it hard to resist the current rates,” said Lawrence Yun, NAR’s chief economist. “The desire to take advantage of these promising conditions is leading more buyers to the market.”
The latest data will be closely watched by Federal Reserve officials who were divided over whether to lower interest rates in mid-September, according to the latest minutes from the meeting.
FOX Business' Megan Henney contributed to this report.