A surge in new home constructions is prompting a healthy dose of optimism for home builders across the U.S. New data from a confidence index shows home builders and buyers are feeling the highest rate of confidence in the housing market since 1998.
According to data from the National Association of Home Builders and Wells Fargo Housing Market Index, the companies’ housing market gauge reached a score of 78 in July, signaling a return for confidence and optimism in the real estate industry. This is the highest score since 1998 after dropping to the lowest score since 2011 in April. Any score over 50 indicates a positive sentiment in the market.
The feelings of optimism are supported by a wave of new potential home buyers in the U.S. After a few months of real estate stagnation due to COVID-19, sellers are finally seeing some success in showing houses in-person as cities and states push forward with reopening plans.
According to CNBC, lumber mills are also quickly rebounding after many shut down in March and April. Supply chain issues still persist, however, and the rising demand for lumber is leading to a sharp increase in prices which could bottleneck future gains in new housing constructions.