In many markets builders are playing catch up. They can't build fast enough. As a result, of the 45,000 new homes sold in May, 16,000, or 36%, weren't yet under construction. The share of sold-but-not-yet-built houses is up from 26% a year ago and way, way up from the low of 14% in the recession-riddled market of September 2008.

(By the way, the annual pace of new home sales in May was the fastest since 2008 as well!)

And there's good reason to think that the pace of sales and construction will get even better because consumer confidence is rebounding sharply. So much so that the percentage of potential home buyers who think it's a good time to sell a house is at an eight-year high, while the percentage who think it's a bad time to buy a house is at a 10-year low.

Finally there's this: even if, as expected, starts this year reach almost 1 million units, that's well below what most housing economists see as demand for 1.2 to 1.5 million new homes a year. So it looks like builders will be playing catch up for some time to come.