Homebuilders Prepped for Spring Rebirth in New Home Sales

by Houston Agent

Homebuying, much like the spring flowers emerging from the ground, seem poised to flourish in the coming weeks.

Spring is often seen as a time for growth and rebirth, and those metaphorical aspects, based on new estimates and projections from some of the nation’s largest homebuilders, have rarely been more appropriate.

According to Barclay Capital analysts, 2012 could spell the strongest post-boom selling season.

“We believe the spring selling season has arrived strongly enough to kick-start a positive feedback loop in housing for the first time since 2005,” analysts said after discussions with top construction company executives, according to a HousingWire piece.

And Barclay is going beyond rhetoric to signify its confidence. It upgraded the stocks of four homebuilders, including Pulte Group and KB Home.

“With early readings from the spring selling season now coming in as strongly as we had originally hoped back in October, we think it is time to dive back in,” the analysts said, who are expecting one million housing starts by 2013 and a return to normal building levels by 2015.

Calculated Risk reported similarly positive readings from Hovnanian Enterprises, which was the nation’s seventh largest homebuilder in 2010. According to data from the builder, its net home sales totaled 940 for the quarter (ending Jan. 31, 2012), an 18.7 percent increase from the previous quarter. When including joint ventures, sales for the quarter were up by 26.9 percent, February sales were even higher, posting a year-over-year increase of 37.5 percent.

Why does it suddenly seem that homebuilding and homebuying optimism has picked up, after nearly five years of tough times? As a recent HSH piece pointed out, there are numerous factors contributing to the spring buying season, from record low mortgage rates (30-year FRM averages were at 3.88 percent last week), to upward trends in employment (227,000 new hires occurred in February), to absurdly cheap refinancings for certain FHA borrowers.

What have your experiences been? Have you encountered a pick-up in business, as the warm weather and blooming flowers are appearing?

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