Builders sentiment index rises to 16 in May, according to Market Watch. Low interest rates and re-emergence of first time buyers help pushed the index to its 7 month high (after Lehman collapsed).
The NAHB-Wells Fargo index rose to 16 in May from 14 in April on a scale of zero to 100. It's the highest since the 17 recorded in September. The index got as low as 6 in January. Before the current housing meltdown, the index had never gotten below 20 in its 24-year history. It peaked at 72 nearly four years ago.
At 16, the index shows that about one in six builders thinks the market for new homes is "good." The industry trade group received 733 responses to its survey in May.
Builders are still have to clean up their inventories, however, they're more hopeful. Low interest rates, affordable home prices, the $8,000 tax credits and ample supply (in some pockets) should help fuel more sales. The latest news on the $8,000 credit is that buyers can use the credit as part of downpayment for your FHA loans.
Oh, by the way, builders are (also) sweetening the deals to help the sales by offering low, low interest rates (and other incentives).