Housing is dim light in the economic tunnel

As previously reported in this blog, the housing market is consistently, albeit slowly, growing stronger each month, pointing to signs of a recovery. Recent data suggests that U.S. homebuilder's confidence continues to grow, which will only add to the strength of the industry as a whole.

Earlier this week, the National Association of Home Builders (NAHB) reported that its housing market index (HMI) jumped to 35 this month, the highest level since March 2007. This is the largest one-month gain recorded by the HMI in nearly a decade and is also up six points from last year. The HMI runs on a scale of 0 to 100, used in conjunction with the latest housing starts to forecast demand for new homes.

David Crowe, NAHB chief economist, said in a press release that the report, combined with upward movement in other key housing indicators over the last six months, adds to the fact that housing is returning to its role of leading the economy out of its recession.

"This is particularly encouraging at a time when other parts of the economy have begun to show softness, and is all the more reason that the challenges constraining housing’s recovery – namely overly tight lending conditions, poor appraisals and the flow of distressed properties onto the market – need to be resolved," Crowe said.

In addition, Ben Bernanke, federal reserve chairman, testified to Congress earlier this week that the housing industry was on the mend, citing historically low mortgage rates as a key factor to buyers' confidence.

As reported by Bloomberg, the average 30-year, fixed mortgage rate declined to 3.56 percent last week, the lowest in data going back to 1972.

With mortgage rates at such a favorable level, lenders might see an influx of hopeful borrowers, and as such, would benefit from investing in loan management software. As current legislation is in place to protect borrowers, lenders must also be sure that individuals are able to fully repay any loans. An amortization calculator is another way to ensure that ideal and realistic payment plans are created.