May NAHB index pops to 33-month high
If tax credits are the only reason why housing is doing better, then why were home builders so optimistic about business in May? That's a riddle the naysayers are going to have to answer. My take? Housing is cheap again, with both pricing and interest rates at rock-bottom levels. So even with the credit in the rear view mirror, real, underlying demand remains for housing.
We're not going back to boom-time sales rates any time soon. But I expect we'll continue to see gradual improvement in sales and a gradual stabilization in pricing as the supply of homes for sale continues to shrink. Or in plain English, the anemic recovery remains on track.