Home builders are expressing renewed confidence in their industry, prompted in part by home buyers scrambling to utilize tax credits that expire at the end of April. In fact, the Housing Market Index – the gauge published by the National Association of Home Builders that measures builder confidence in home sales – rose from 15 in March to 19 in April, a score that has not been seen since September 2009. Although new home construction actually fell slightly in March, housing construction as a whole rose to its highest level in nearly 16 months, bolstered by better-than-expected multifamily construction numbers.
According to Fannie Mae’s April 2010 Economic Outlook, however, the housing recovery may be hindered in the coming months by excess inventory and pending foreclosures. Persistent unemployment may also delay the recovery, although most economists believe that the 10.1% unemployment figure in October 2009 will stand as this recession’s peak.
Nevertheless, the median home price in California rose 14% during the past 12 months – the highest annual increase in more than four years – and the state’s median home price rose from $223,000 to $255,000 for the same period, representing the fifth consecutive month of year-to-year increases following two years of decreases.