Anderson Homes, LLC

Home builders are optimistic as new home construction shows signs of improvement.   The increasingly upbeat mood was reflected in an index of builders’ confidence released Monday, which rose for the second month in a row in May.   A separate report by the National Association of Home Builders showed housing affordability improved in the first three months of this year amid falling home prices and low interest rates.

“The bottom line is there are good signs on the horizon,” said Jerry Howard, president and chief executive of the National Association of Home Builders. “It’s fair to say we could be closing in on the bottom, but we have a long road ahead of us.”

The National Association of Home Builders-Wells Fargo housing market index rose two points in May. While still near historically low levels, the latest index reading is the highest since September.   The report reflects a survey of 733 residential developers nationwide, tracking builders’ perceptions of market conditions.

We are also at historically low interest rates, and most buyers area realizing that if they are going to get a loan to build their home, they can do it now at low interest rates or pay more later, and a higher interest rate on a 30-year mortgage can easily add $200 to $400 a month to the mortgage payment.

For anyone seriously considering building a home, now is the time to make a move before costs substantially increase.