In Indianapolis, an open house event tends to draw 10 people on a good day.
But after the snowiest winter on record for the U.S. Midwestern city, prospective home buyers were champing at the bit: 45 people came to an open house late last month, according to mortgage executive Greg Block.
"The realtor was dumbfounded," said Block, vice president of lending at Austin, Texas-based Open Mortgages, which has branches near Indianapolis. "The winters were so brutal across the country that people just hunkered down and didn't do anything."
As much of the United States thaws out from a particularly frigid winter, signs are also pointing to a warmer national housing market.
Anecdotal evidence from homebuilders, mortgage lenders and brokers suggest demand in the residential housing market is picking up, potentially paving the way for a broader acceleration in an economy that has been in a slow-growth mode since pulling out of the financial crisis.
Housing is an important part of the economic fabric, contributing about 18 percent to Gross Domestic Product including private residential investment as well as consumption spending on housing services, according to the National Association of Home Builders.
The positive reports from across the country are supported by data from the Mortgage Bankers Association showing that the volume of home-purchase mortgage applications has climbed more than 13 percent in the past five weeks, near its highest point in two months.
Other positive economic indicators this week - including better-than-expected auto sales and solid private sector hiring in March - also could underpin strengthening consumer sentiment that is critical to gains in the housing market.
U.S. consumer confidence, as tracked by the Conference Board, last month hit its highest levels in more than six years.
"We also believe that most everything is pointing in the right direction," said Rex Gordon, vice president of corporate land at The Drees Company, a privately held homebuilder based in Fort Mitchell, Kentucky that sold 1,648 homes last year.
At Drees, which sells mostly single-family detached homes in metropolitan areas across the country, foot traffic to its model locations was up about 8 percent in the past four weeks compared with a year ago, Gordon said.
"Yes, construction was hit real hard because of the weather, but from a sales standpoint we've been encouraged," Gordon said. "The vibe is good; our sales people are happy. They're all working with prospects all the time."
FEARS OF RISING RATES
To be sure, some figures show that the housing market has been tepid. Housing starts fell for the third straight month in February, while homebuilder sentiment ticked up but remained mostly poor in March. Sales of existing homes have fallen 14.5 percent in the past seven months, while sales of new homes have flattened after rising in the back half of 2013. Also, mortgage applications may be up - but they are rising from the lowest levels in 18 years.
And what rebound that may be underway is not benefiting every builder, yet. Beazer Homes USA Inc reported on Thursday that net new orders fell 9 percent in the quarter ending March 31.
Still, some of the conditions that may have undercut demand are disappearing.
Aside from the poor weather dampening construction and keeping home buyers indoors, the 16-day U.S. government shutdown last fall also may have weighed on would-be buyers, because it contributed to general uncertainty about the economy, according to homebuilders.
"The fourth quarter with the government shutdown put a lot of people on the fence, so I think there was a lot of pent-up demand," said Jared Weggeland, director of sales andmarketing at Southern Homes in Florida.
At Southern, which builds homes averaging about $185,000 in Central Florida, January and February sales were the highest for those months since 2005, and "March was even better," Weggeland said.
"Demand is extremely high right now," he said.
Another factor that could energize the housing market is home buyers seeking to capitalize on low interest rates before those rates potentially spike higher. Take Renee Barrett, a nurse's assistant in Las Vegas, who got a pre-approval for a $249,000 mortgage a week ago.
After shedding debt from a divorce, Barrett, who has a 13-year-old son, is hoping to buy a home as fast as she can, believing interest rates could easily pop back up to 7 percent or more. A 30-year mortgage rate is currently around 4.56 percent.
Las Vegas' home prices fell by more than half during the housing bust. But the market has been recovering for a couple of years now and that recovery may be picking up pace. Rick Piette, a mortgage lender in the city, said his typical bill for credit checks for pre-qualification letters doubled from January to February.
"I have seen an uptick in demand for the pre-approvals," Piette said. "I think the demand for the mortgages will follow, too."
At Guaranteed Rate, a top 20 U.S. mortgage lender, March was the best month for new loans in half a year, said Chief Executive Victor Ciardelli. The company locked in $1.2 billion in loans for new purchases and refinancings last month, or around 26 percent more than it did in February.
The cold winter "had a significant effect on business," but between pent-up demand among home buyers and tight inventories in the marketplace, the company is now seeing more multiple bids on homes, Ciardelli said.
Like many large publicly traded homebuilders contacted by Reuters, Toll Brothers Incdeclined to comment on demand trends. But Martin Connor, Toll's chief financial officer, said that given the company's luxury home focus "when we see consumer confidence statistics rising, that generally bodes well for us."
Investors have begun to take note. The Dow Jones U.S. Home Construction index has risen 5 percent in the past 7 days.
Rob Henger, director of mortgage banking with Lexington, Tennessee-based FirstBank, said he believes that confidence is back. The company's retail mortgage division saw a 16 percent increase in credit applications in March from February, after they rose 19 percent in February from January.
"The damage to our industry and the public perception of housing and mortgage banking I think is 24 months behind us," said Henger. "Today, there's a renewed confidence."
(Additional reporting by Peter Rudegeair and Phil Wahba in New York, and Sagarika Jaisinghani in Bangalore; Editing by Martin Howell)
