Of the index’s three components, current sales rose six points to 71, sales expectations in the next six months rose five points also to 71. Buyer traffic jumped four points but still stands just below positive territory at 48.
Home sales are usually strongest in the spring and fall, but Bob Youngentob, president and co-founder of EYA, a developer in the Washington, D.C. metropolitan area, said he was surprised at the uptick this summer.
“We are definitely feeling better. The summer was excellent. Sales and traffic picked up strongly. It seems like there is a lot of enthusiasm in the buyers,” said Youngentob. “Interest rates have been low for a long time, and there is concern they may rise. Buyers on the fence are finally motivated to make a move.”
He is not, however, able to raise prices much, and for most builders that has been the case. With costs rising for materials, that puts pressure on margins.
“I just don’t think there has been enough consistent demand to get too aggressive with prices. We have been relatively conservative in price increasing,” he added.