WASHINGTON The housing market continues its strong pace this month, according to the National Association of Home Builders housing market index, which increased 11% to its highest level of the year in August.
The index, derived from a monthly survey of builders, moved from 56 in July to 62. The NAHB cited low interest rates and strong consumer demand.
Mortgage interest rates have declined by about 20 basis points in the last month, to stand at 7%, their lowest level since March, Bruce Smith, president of the NAHB, said in a statement. With demand for housing on the upswing and many builders grappling with a shortage of labor and building lots, home prices across much of the nation are rising. Home buyers are taking note, preferring to invest in housing rather than in the declining stock market.
In the survey, home builders are asked to rate current sales of single-family homes and sales expectations for the next six months, as well as to rate traffic of prospective buyers. All three components of the index rose in August to their highest levels for the year, the NAHB said.