Reflecting the bullish real estate market in the United States, home builder sentiment in the United States is at its highest level since 2006, as reported by the National Association of Home  Builders and Wells Fargo.  For the first time since The Great Recession, home builder sentiment is also positive with a reading of 52.

That mark represents an eight-point increase since May, the largest increase since 2002.  Overall, new home sales have climbed 29% this year.  Starts are now at an annual pace of 955,000 units.  That is an increase from 853,000 units in April.  The gains have been particularly noticeable in hard-hit states such as Florida and Arizona.

More new homes are selling as Americans are feeling more confident with the US economy recovering.  There has been a change in sentiment by the consumer, much like that for home builders.  Feeling more secure about their jobs and the overall US economy, Americans are now more willing to take on the responsibility of buying a new home.

Real estate investors have also been very strong in lifting the housing market higher.  Hedge funds and other institutional buyers have spent billions to gobble up single family homes, fix them up, and rent them out to families. That increased the demand for new homes from builders as it removes housing stock from the market.

Another bullish sign for housing has been the initial public offerings of two real estate investment trusts that own and rent out thousands of single family homes.  

Silver Bay Realty Trust (NYSE: SBY) went public last December.  In May of this year, American Residential Properties (NYSE: ARPI) began offering shares to the public, too.  Colonial American Homes,which owns portions of almost 10,000 houses in nine states, also has plans to become publicly traded.

As covered in another press release, there was also bullish news released from the International Builders Show.  There has been a much stronger demand for exhibit space at the Design and Construction Week Show in Las Vegas in February, 2014.  Already, 90% of the floor space has been claimed.  That is a much more positive response than in previous years.

"The home builders report is another sign of a surging real estate market," noted Jerry Cohen, President and Founder of EquityBuild, a real estate investment firm.  Cohen, who has been a principal in more than 2000 real estate transactions since 1984, furthered that, "Home buyers and investors are now realizing again that real estate is a great investment.  Shelby Davis, founder of the investment firm Shelby, Cullom, Davis & Company, when asked when was the best time to buy stocks, would always reply, 'Whenever you have the money.'  That is the way I feel about real estate."

With home builder sentiment soaring due to surging sales, others obviously feel the same way about purchasing real estate, whether for their residence or as an investment property.

 

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