Mortgage Rates, Stock Market Push Up Housing Index

WASHINGTON, DC-Low mortgage rates and the ailing stock market are being credited with boosting the housing market index, a measure of home builders’ assessments of the current home sales market and their expectations over the next six months. The housing market index, which was based on survey data from early this month, rose for the second consecutive month with a two-point gain to 59.

According to NAHB president Bruce Smith, March’s HMI is the highest reading of builder optimism since November 2000 and indicates significant strength remains in the housing market. Even so, the HMI is still 18 points below its late 1998 peak and is well below the average of the last three years.

“Home builders continued to express confidence that low interest rates were helping offset effects of broader economic weakening and deteriorating consumer confidence to keep buyer demand on track,” says Smith. “It’s also likely that the solid investment aspects of homeownership have buoyed housing demand as problems in the stock market have deepened.”