Rates down, new houses go up

By Staff -- Home Textiles Today, 8/31/2004 12:00:00 AM

WASHINGTON — Lower mortgage interest rates helped boost home builders' confidence in the market for new single-family homes during August, according to a monthly canvass compiled by the National Association of Home Builders and Wells Fargo Bank.

The monthly Housing Market Index rose to a current level of 71, up four points from a revised July figure of 67. Builder confidence is now on par with its year-ago level.

"Long-term mortgage rates fell to 6.05 percent in July, from 6.29 percent the previous month, then continued to fall in the beginning of August," said Bobby Rayburn, president of the National Association of Home Builders. "This undoubtedly helped push builder optimism to its highest level since October of 2003 as potential buyers who might have been sitting it out started diving back into the market when rates headed downward. With the ongoing favorable financing climate and solid house-price performance, we have good reason to expect continued strength in the housing market in the months ahead."