Probably the most-often mentioned drag on an economic recovery is the housing market, with the glut of existing homes discouraging builders of new homes from amping up their operations. But recent reports are hinting that the days of stagnant new home construction are behind us -- great news for contractors of all types, including paving & pavement maintenance folks.
According to the Wall Street Journal, an index of home builders is up more than 25% year to date; Toll Brothers Inc., a high-end builder, is up 21%; and KB Home, builder of more affordable housing, has almost doubled. The Journal notes that while builders are still competing with too many existing houses (including foreclosed houses), the Housing Market Index compiled by the National Association of Home Builders (NAHB) could top 30 when released later today -- up from nine in 2009 and 14 as recently as six months ago.
The WSJ reports that while the Housing Market Index measures sentiment, the NAHB's Improving Markets Index tracks trends and is up sharply in recent months -- recently showing improvement in 99 metro areas in 33 states.
The article cautions that a recent bump in mortgage rates could impact sales but says "Barring a sharp drop in affordability or incomes, predicting [existing] houses will find buyers is no longer a surefire way to look foolish."