The largest homebuilders in the country are optimistic that the worst is over in the housing market.
D.R. Horton, ranked as the largest homebuilder in the country last year by Builder magazine, and second-ranked PulteGroup both reported increased backlogs.
The backlog shows that future demand should hold steady, which is positive even though it as a low level.
|(Getty Images photo)
While announcing quarterly results, the CEOs of both companies also commented that they see demand stabilizing, while admitting that sales are historically low
Donald Tomnitz, CEO of D.R. Horton Inc., delivered what would be considered a bleak outlook under normal market conditions. He said, “To be frank, most all of our markets are soft, softer and softest. Nothing's really strong out there.”
PulteGroup Inc.'s CEO Richard Dugas also looks for a slow but steady housing market, noting, “We view the lack of demand as the bigger issue hurting the industry today. Simply put, we need more jobs and better consumer confidence before a meaningful recovery can occur.”
Their outlook confirms other reports that are showing signs of a bottom after a five year bear market in real estate. Prices in Case-Shiller are unchanged over the past six months.
The National Association of Realtors reported that its index of pending sales of existing homes was up 2.4 percent in June, posting its third gain in the past four months,
While a bull market may need to wait for a stronger economy, a bottom in real estate would be good news since home prices would at least stop falling.
© 2014 Moneynews. All rights reserved.