Further evidence of the improving economy is seen by the index of home builders confidence which has reached a five year high. Housing inventory is going down and prices have been depressed due to the high rate of distressed sales. While consensus is that the housing recovery will take some time, I believe that there is a legitimate chance that we will see a more aggressive increase in prices due to the pent up demand that exists in the market. So many people have waited to move into a new place trying to pick the bottom of the real estate market, that when prices begin to increase I think people will realize that interest rates are so low that it is unlikely there will be a better opportunity. It would be nice to see inventory continue to decline before too many new housing starts are developed, but the builders are going to try and be able to take advantage of the cycle changing so we’ll see how things shake out.
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