Are the home builders portending better days ahead? We think so, because their sentiment continues to reflect more optimism and improving new-home prospects.

For proof, the NAHB/Wells Fargo Home Builder Sentiment Index gained four points in February, pushing the index to a 29 reading – the highest reading in over four years. What's more, February was the second-consecutive month of a four-point gain and the fifth-consecutive month-over-month gain.

Even more encouraging to us is the fact that home builder optimism isn't confined to specific index components or specific areas. Gains are evenly split among current sales, future sales, and buyer traffic, and evenly distributed by metropolitan region.

The latest data further buttress the case for a rosier housing outlook. In fact, the Co mm erce Department data show housing starts increased 1.5% in January, pushing starts up to 699,000 annualized units, the highest start rate since October 2008.

Many housing pundits have pointed to multifamily starts as reason for the upturn. To be sure, multifamily starts are in an uptrend, having increased 14% to an annualized rate of 175,000 units in January. It's worth noting, though, that single-family starts posted at 508,000 annualized units in January. That's a 1 percent drop from December's starts, but December's single-family starts were revised up strongly to 513,000 homes – a 12-percent gain from November.

In short, the resurgence in home construction isn't being driven by renters alone. People still want to own a home, and they are still willing to buy a new one.

Whatever type of home someone wants, it can be financed at record low mortgage rates. In fact, a new low was set again this past week. For this, we can thank the Greeks. As improbable as it might seem, what occurs in Athens, Greece impacts mortgage rates in Athens, Georgia.Modern financial markets are very interwoven. When investors become nervous about the debt situation in Greece, they pull their money out of Greek debt and put it in haven investments like U.S. Treasury securities. The securities (particularly the 10-year Treasury note), in turn, influence long-term mortgage rates: Treasury rates drop, mortgage rates invariable drop as well.

The Federal Reserve also influences mortgage rates by purchasing mortgage-backed securities. The Fed's purchases creates demand for these securities, thus driving mortgage rates down. The Fed has recently stated that it's willing to purchase more of these securities if needed. That means rates are unlikely to move significantly higher in the near future.

That said, they are unlikely to move significantly lower either, thanks to an improving economy. Therefore, we see no reason to wait to refinance or purchase a home for anyone so inclined. On the latter, the timing is unlikely to get better. According to the NAHB and Wells Fargo, buying a home today is more affordable than it has been any time in the past 20 years.

We've noted many times that low prices and high affordability don't last in perpetuity. Given the surge in home builder optimism and improved employment numbers, we don't expect homes to be as affordable at year's end as they are today.

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