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New Home Sales Rise to Post-Recession High

Sales of newly built, single-family homes rose 16.6% in April from an upwardly revised March reading to a seasonally adjusted annual rate of 619,000 units, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest sales pace since January 2008.

“Builders remain optimistic about the housing market, and this month’s jump in new home sales is a positive sign that growing demand will keep the housing sector on an upward trajectory through the spring buying season,” said National Association of Home Builders Chairman Ed Brady.

“Rising home sales combined with tight inventory will translate into increased housing production as we move onward in 2016, especially as job creation continues and mortgage rates remain low,” said National Association of Home Builders Chief Economist Robert Dietz.

The inventory of new homes for sale was 243,000 in April, which is a 4.7-month supply at the current sales pace. The median sales price of new houses sold in April was $321,100.

Regionally, new home sales rose by 52.8% in the Northeast, 18.8% in the West and 15.8% in the South. Sales fell by 4.8% in the Midwest.

See National Association of Home Builders’ historical new home sales data and read Dietz’s Eye on Housing blog post for further details.

Increase in Sales of Existing and New Homes

Existing Home Sales

Existing home sales, as reported by the National Association of Realtors (NAR), surged 14.7% in December, including an increase in the first-time buyer share to 32%, the highest share since August. December sales snapped back from a November decline partially attributable to delays in closings from the rollout of the Know Before You Owe mortgage disclosure rule by the Consumer Financial Protection Bureau (CFPB). The new rule was designed to help consumers understand their loan options and avoid closing cost surprises. Total existing home sales in December increased to a seasonally adjusted rate of 5.46 million units combined for single-family homes, townhomes, condominiums and co-ops, up from 4.76 million units in November. December existing sales were up 7.7% from the same period a year ago.

Existing sales increased in all regions, ranging from 8.7% in the Northeast to 23.2% in the West. Year-over-year, all regions increased, ranging from 4.6% in the South to 11.9% in the Northeast.

Total housing inventory decreased by 12.3% in December, and is 3.8% lower than its level a year ago. At the current sales rate, the December unsold inventory represents a 3.9-month supply, down from a 5.1-month supply in November. Some 32% of homes sold in December were on the market for less than a month.

Distressed sales are defined as foreclosures and short sales sold at deep discounts. The distressed sales share decreased to 8% in December from 9% in November. The December all-cash sales share decreased to 24% from 27% in November and 26% in December 2014. Individual investors purchased a 15% share in December, down from 16% in November and 17% a year ago.

The December median sales price of $224,100 was 7.6% above last December, and represents the 46th consecutive month of year-over-year increase. The median condominium/co-op price of $209,900 in December was up 4.9% from last December.

Although the Pending Home Sales Index fell slightly in November, the sharp volatility in November and December sales was a function of implementing a new regulation. Builder sentiment remains strong, and the tight inventory of existing homes bodes well for new single-family sales in 2016.

“This is a really good indicator that the real estate market is returning to normal levels. When existing home sales rise it stimulates sales of new homes, and it stimulates remodeling activity," said Home Builders Association of Greenville President Joe Hoover, APB, of Hoover Custom Homes.

New Home Sales

Sales of newly built, single-family homes rose 14.5% to 501,000 units in 2015: the highest level since 2007, according to newly released data from the Department of Housing and Urban Development and the U.S. Census Bureau. Meanwhile, sales in December increased 10.8% to a seasonally adjusted annual rate of 544,000 from an upwardly revised November reading.

“The December sales report is a great end to a very strong year,” said National Association of Home Builders Chairman Ed Brady. “As we move forward in 2016, we should see the housing market continue to make lasting gains.”

“Relatively low interest rates and an improving economy are motivating buyers to make a new-home purchase,” said National Association of Home Builders Chief Economist David Crowe. “Builders are upping their inventory in response to heightened consumer interest. Housing inventory is now at its highest level since October 2009.”

Sales increased in all four regions in December. The Midwest, West, Northeast and South all posted respective gains of 31.6%, 21%, 20.85% and 0.4%.

The inventory of new homes for sale was 237,000 units in December, a 5.2-month supply at the current sales pace.

Combining the reports of increasing sales of existing and new homes points to an overall increase in the housing market. Considering recent history, those in the building industry should always be cautious, but these reports point to a strengthening economy.

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New Home Sales Rise 4.3% in November

Sales of newly built, single-family homes rose 4.3% to a seasonally adjusted annual rate of 490,000 units in November, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“It is encouraging to see new-home sales continue to tick upward,” said NAHB Chairman Tom Woods. “Builders are also increasing their inventory even as they face difficulties accessing lots and labor.”

Regionally, sales rose 20.5% in the West and 4.5% in the South. Sales fell 28.6% in the Northeast and 8.6% in the Midwest.

“Limited gains in new-home sales can be attributed to a weak existing sales report,” said NAHB Chief Economist David Crowe. “People who already own a house comprise most of the new residential construction market, and they often must sell their existing home before making another purchase.”

The inventory of new homes for sale was 232,000 units in November. This is a 5.7-month supply at the current sales pace. This increase in new home sales shows the continuation of growth in the industry.

New Home Sales Drop in September

Sales of newly built single-family homes fell 11.5% to a seasonally adjusted annual rate of 468,000 units in September, according to newly released data from HUD and the U.S. Census Bureau.

“Despite this monthly drop, our members continue to tell us that housing is moving in the right direction,” said NAHB Chairman Tom Woods. “Consumers may have simply been reacting to soft job numbers.”

“It is not surprising to see sales pull back in September following a strong August reading, especially after a few months of weak job creation,” said NAHB Chief Economist David Crowe. “However, new-home sales year to date are up 17.6% compared to the same period of 2014, and we expect the market to continue improving at a gradual but steady pace for the rest of year.”

Regionally, new home sales were down across the board. Sales fell 61.8% in the Northeast, 8.3% in the Midwest, 8.7% in the South and 6.7% in the West.

The inventory of new homes for sale was 225,000 units in September. This is a 5.8-month supply at the current sales pace.

New Home Sales Rise 5.7 Percent in August

 Sales of newly built, single-family homes rose 5.7% to a seasonally adjusted annual rate of 552,000 units in August from an upwardly revised July reading, according to newly released data from HUD and the U.S. Census Bureau.

“We continue to hear from our members that more serious home buyers are returning to the market,” said Tom Woods, chairman of the National Association of Home Builders (NAHB) and a home builder from Blue Springs, Mo. “Builders are gradually adding inventory to meet future demand as they handle shortages of lots and labor.”

Regionally, the Northeast, South and West posted respective gains of 24.1 percent, 7.4 percent and 5.4 percent. The Midwest registered a 9.1 percent decline. The inventory of new homes for sale was 216,000 units in August. This is a 4.7-month supply at the current sales pace.

“Today’s report indicates the release of pent-up housing demand as the overall economy strengthens, consumer confidence grows and mortgage interest rates remain low,” said NAHB Chief Economist David Crowe. “The housing market should continue to move forward at a modest but more persistent pace throughout the rest of 2015.”

Article courtesy of nahbnow.com

NAHB: New Home Sales Surge in May

New single-family home sales reached the highest pace in six years in May.

New-home sales were at a seasonally adjusted annual rate of 504,000 in May, a gain of 18.6% over a slightly downwardly revised April (425,000), according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest rate since May 2008 and is a significant increase from the winter low point for sales in March (410,000).

“These numbers are in line with our recent builder surveys, which indicate that more consumers are getting off the fence and coming back into the marketplace,” said NAHB Chairman Kevin Kelly.

NAHB is forecasting that single-family new home sales will total 515,000 in 2014, a nearly 20% year-over-year gain.

Regionally, new-home sales were up across the board. Sales rose 54.5% in the Northeast, 34% in the West, 14.2% in the South and 1.4% in the Midwest.

The inventory of new homes for sale held steady at 189,000 units in May. This is a 4.5-month supply at the current sales pace. Total inventory levels have remained in the 183,000 to 190,000 range since September 2013.

Builder: new home sales are 13.1 percent of total home sales

According to Builder magazine, new home sales were 13.1 percent of total home sales in October 2013, up slightly from 12.8 percent in September 2012.  While up, new homes as a percentage of total sales is significantly lower than other markets like Charlotte and Columbia, where the new home sales market share is closer to 20 percent.

New Home Sales in Recovery

After dipping during the “pause” in September, new home sales rebounded in October. Some slowdown in housing was expected due to declines in consumer confidence and the uncertainty produced by the partial government shutdown. However, the October data add more evidence that the recovery for housing will continue into the new year.

For the economy as a whole, job creation continues to be positive, although weaker than hoped. The Bureau of Labor Statistics reported that November payroll employment grew by 203,000, plus an additional 8,000 for prior month revisions. The job openings rate continues to rise, as jobs are posted but not filled. This is particularly true in construction. In October, there were 124,000 unfilled positions in construction firms – the highest level since May 2008.

Gross domestic product growth surprised on the upside for the third quarter, coming in at 3.6%. This was higher than the earlier estimate of 2.8%, but the bump in growth largely came from inventory investment: for 1.7 percentage points or nearly half the 3.6% total. As a result, your Home Builders Association expects growth to slow sharply in the final quarter of the year.

Against this economic backdrop, October new home sales showed strength after a weak September. Rising 25% from the September pace, the annualized rate for October came in at 444,000, reaching a level established earlier in the year. Months' supply totaled 4.9, the lowest inventory measure since the second quarter. In fact, for October the total inventory of completed, ready-to-occupy newly built homes remains low, at only 42,000 nationwide.

With respect to new home financing, Census data show that the cash share of new home sales totaled 7.37% during the third quarter, near the recent high of 7.89% of the third quarter of 2011. FHA-insured mortgages came in at 17% of the market for the third quarter. But interest rates remain low by historic standards. Data from the Federal Housing Finance Agency indicate that the average contract interest rate for October for newly built homes was 4.32%.

Looking at individual markets, the NAHB/First American Leading Markets Index rose slightly to a value of 0.86 in December, up from 0.85 in November. The index measures progress for employment, home prices, and home building based on normal market conditions. So the 0.86 measure indicates that nationwide, housing markets are operating at 86% of normal conditions. In December, 54 metros were at or above a value of one, meaning those markets had returned to or were above their last normal levels of activity. These markets were dominated by energy and agriculture states and smaller markets that did not see rapid declines in production and prices in recent years.



In the Upstate, Greenville's index is .87.  However, building permits are lagging at 55 percent of normal while home prices have soared to 114 percent of normal.

In other positive news for home builders, lending conditions for acquisition, development and construction (AD&C) loans continue to improve, although a considerable lending gap between demand for AD&C and current loans persists. Survey data by the National Association of Home Builders indicate that for the third quarter, only 9% of those surveyed reported that lending conditions deteriorated, with 28% noting improving conditions. And FDIC data show that the stock of outstanding AD&C loans grew nearly 5% during the second and third quarters of the year.

Overall, total private residential construction spending was up 17.8% from a year ago, a useful measure of the progress the housing recovery has made recently. Since market lows in June 2009, single-family construction spending is up almost 87%, multifamily 164%, and remodeling-related improvement spending 17%. Over the course of 2013, single-family spending is up 14%, multifamily 22%, and remodeling 3%.

In analysis news, economists at your Home Builders Association recently examined how comprehensive tax reform could affect business-related advertising and tax accounting, with a focus on construction firms. Additional analysis examined average electric utility bill by state and geographic breakdown of residential trade contractor employment after the Great Recession.

Source: Eye on Housing

NAHB: More Buyers Purchasing Homes Still Under Construction

In a recent Eye on Housing blog entry, NAHB's economists describe a significant shift in the marketplace whereby greater numbers of buyers are purchasing homes that are still under construction or not yet started versus newly completed homes that are part of a builder's inventory.

The experts attribute this emerging trend to several factors, including, for example, smaller inventories of completed homes (which have limited buyers' choices in that area) and also builder credit constraints that have led to a surge in construction-to-permanent financing. In any case, our economists note that the recent shift has been quite dramatic.

Whereas completed homes were half of all new-home sales in 2008, by mid-2013, that average had fallen to just 29 percent. In the same period, the share of homes sold but not yet started went from 21 percent of sales to 37 percent and the share of homes sold that were under construction went from less than a quarter of the total to more than one-third currently.

One likely explanation for what seems to be a long-term trend in favor of sales of unfinished homes is the rise in concentration of larger building companies, which can hold an inventory of models and available lots for buyers to choose from without having to risk building ready-to-occupy homes that might not fit buyers’ preferences.

New-Home Sales Rise 2.3 Percent in April

Sales of newly built, single-family homes rose 2.3 percent to a seasonally adjusted annual rate of 454,000 units in April, according to newly released figures from HUD and the U.S. Census Bureau. The gain builds on a strong upward revision to sales numbers reported for the previous month.

“Builders are reporting an active spring buying season as consumers become more confident about going forward with a new-home purchase along with steadily firming prices in local markets,” said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. “While the cost of constructing homes is rising due to tightened supplies of materials, lots and labor, to some extent, this may be creating greater urgency among potential buyers.”

“Today’s report is further evidence of the gradual, consistent improvement we have been seeing in housing market conditions over the past year,” noted NAHB Senior Economist Robert Denk. “We’re now about half-way back to what could be considered a full recovery, and we do expect to see continual, solid gains in both starts and sales of new homes going forward.”

On a regional basis, new-home sales rose 3.0 percent in the South and 10.8 percent in the West, but fell 4.8 percent in the Midwest and 16.7 percent in the Northeast in April.

The inventory of new homes for sale edged up to a still-thin 156,000 units in April. This is a 4.1-month supply at the current sales pace.

New-Home Sales Rise in November

Sales of new single-family homes increased 4.4 percent in November to a seasonally adjusted annual rate of 377,000 units, according to figures released today by HUD and the U.S. Census Bureau. It was the highest monthly total since April 2010 when the federal home buyer tax credit expired.

“New-home sales are gradually picking up momentum as the economy improves,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “Prospective home buyers who have been sitting on the fence for years are moving back into the market due to continuing low mortgage interest rates, attractive pricing and the improving economy,” he said.

“This increase is consistent with NAHB’s member surveys, which show increasing confidence in the market,” said NAHB Chief Economist David Crowe. “We’re projecting a total of about 365,000 new-home sales in 2012, an increase of almost 20 percent over the previous year. The year ahead will see a similar gain as more people who have been sitting on the sidelines decide that it is time to purchase a new home.”

Crowe cautioned, however, that failure to address the “fiscal cliff” could set the housing market back. “Continued uncertainty about the fiscal cliff has the potential to affect new home sales and other aspects of the housing market,” he said. “Some people will definitely hold off on making major financial decisions until the situation is resolved.”

Regionally, new-home sales numbers were mixed in November. Rebounding from declines the previous month, both the South and the Northeast showed improvement, with respective increases of 21.1 percent and 12.5 percent. New-home sales in the Midwest dropped by 12.5 percent, and the West posted a decline of 17.8 percent.

The inventory of new homes for sale increased slightly to 149,000 units in November, which is a 4.7-month supply at the current sales pace.

New Home sales up 5.7% in September

Sales of single-family homes have risen 5.7% to an ajusted rate of 389,000 units in September, making it the fastest sales pace recorded since April 2010. The reason for the increase in sales is because most consumers have been anxiously waiting for the perfect time to buy over the past few years and are now going forward with the purchase of a new home. However, there has been some kick back for some, as mortgage guidelines are still stringent.
It has been suggested that there is only a 4.5 month supply of new homes at the current sales price. There is an indication that builders continue to have a tough time obtaining construction credit which could mean problems down the road as the completed number of new homes for sale is at is tightest since October of 2005.

One further note: while most areas have experienced increases  for new home sales the Midwest had a 37.3% decline.

For the full article from the NAHB click here.

Huffington Post: Americans Buying Homes at the Fastest Pace in 2 Years

Americans bought new homes in May at the fastest pace in more than two years. The increase suggests a modest recovery in the housing market is continuing, despite weaker job growth.

The Commerce Department said Monday that sales of new homes increased 7.6 percent in May from April to a seasonally adjusted annual rate of 369,000 homes. That's the best pace since April 2010, the last month that buyers could qualify for a federal home-buying tax credit.

Even with the gains, the annual sales pace is less than half the 700,000 that economists consider to be healthy.

Read the entire report at Huffington Post by clicking here.