New Home Sales Increase in October

2022-11-23T11:19:34-06:00

By Danushka Nanayakkara-Skillington on November 23, 2022 • New home sales rebounded in October despite higher mortgage rates, likely due to low existing home inventory and builders using incentives to attract buyers to the new home market. The U.S. Department of Housing and Urban Development and the U.S. Census Bureau estimated sales of newly built, single-family homes in October at a 632,000 seasonally adjusted annual pace, which is a 7.5% increase over downwardly revised September rate of 588,000 and is 5.8% below the October 2021 estimate of 671,000. Sales-adjusted inventory levels are at an elevated 8.9 months’ supply in October. However, only 63,000 of the new home inventory is completed and ready to occupy. This count has been increasing in recent months and is up 75.0% compared to a year ago. Homes under construction accounts for 63.8% of the inventory. Moreover, sales are increasingly coming from homes that have not started construction, with that count up 13.7% year-over-year, not seasonally adjusted (NSA). The median sales price increased to $493,000 in October, up 8.2% compared to September and is up 15.4% compared to a year ago. In October there were 23,000 homes that were priced above $500,000 compared to 17,000 a year ago. Nationally, on a year-to-date basis, new home sales are down 14.2% for the first ten months of 2022. Regionally, on a year-to-date basis, new home sales fell in all four regions, down 4.8% in the Northeast, 22.0% in the Midwest, 11.8% in the South, and 17.9% in the West. Related ‹ Small Increase for Missing Middle MultifamilyTags: economics, home building, housing, new home sales, sales, single-family

New Home Sales Increase in October2022-11-23T11:19:34-06:00

All-Cash New Home Sales Outnumber FHA-Backed for the First Time Since 2007

2022-10-28T12:21:21-05:00

NAHB analysis of the most recent Quarterly Sales by Price and Financing published by the U.S. Census Bureau reveals that new home sales financed through FHA numbered 11,000 and accounted for 7.5% of the total in Q3 2022–the smallest share since the fourth quarter of 2007.  The share has dropped by nearly two-thirds since the spring of 2020. In contrast, the share of cash purchases has climbed each of the past three quarters to reach a 20-year high of 9.5% (14,000 sales). This is first time since 2007 that cash sales accounted for both a larger number as well as a larger share of the total. Conventional loans financed 77.6% of new home sales in the third quarter—a 1.2 percentage point quarter-over-quarter increase. The share has risen each of the prior seven quarters. The share of VA-backed sales declined 0.8 percentage point to 5.4% in the third quarter–0.8 ppts higher than the share one year prior. Although cash sales typically make up a small portion of new home sales, they constitute a larger share of existing home sales. According to estimates from the National Association of Realtors, 22% of existing home transactions were all-cash sales in September 2022, down from 24% in August and 23% in September 2021. The average interest rate of a 30-year fixed rate mortgage increased 100 basis points, quarter-over-quarter.  Over the four quarters ending Q3 2022, the average rate of a conventional 30-year FRM spiked 369 basis points—the largest yearly increase since 1981. Stock market returns (proxied by the S&P 500®) in the third quarter were -5.3%, quarter-over-quarter, and -16.8% year-over-year. Each of these factors plays an important role in the dynamics among market share by type of financing. Higher stock returns and the resulting increased wealth aids borrowers in the underwriting process as well as increasing the down payment a household can afford (should they cash out some of their portfolio). Higher mortgage rates decrease the odds that a given loan will be approved, all else held equal, as they make monthly payments larger than they would otherwise be. Different sources of financing also serve distinct market segments, which is revealed in part by the median new home price associated with each. In the second quarter, the national median sales price of a new home was $454,900. Split by types of financing, the median prices of new homes financed with conventional loans, FHA loans, VA loans, and cash were $503,200, $340,300, $432,200, and $494,200, respectively. The median new home price has increased 5.0% in 2022 but there is a large variance by type of financing.  The price of a new home purchased with cash has increased 27.3% since Q1 2022 while the price of an FHA-backed sale has fallen 7.6%. Related ‹ Inflation Brings Savings Rate Down In SeptemberTags: conventional loans, Existing Home Sales, FHA, financing, mortgage finance, mortgage lending, new home cash purchases, new home financing, new home sales, sales by financing, single-family sales, VA

All-Cash New Home Sales Outnumber FHA-Backed for the First Time Since 20072022-10-28T12:21:21-05:00

New Home Sales Plummet in July

2022-08-23T10:18:28-05:00

By Danushka Nanayakkara-Skillington on August 23, 2022 • New home sales in July fell to their lowest level since January 2016 as the industry grapples with supply chain disruptions that are delaying new home building projects and raising housing costs as mortgage interest rates increased. The U.S. Department of Housing and Urban Development and the U.S. Census Bureau estimated sales of newly built, single-family homes in July at a 511,000 seasonally adjusted annual pace, which is a 12.6% decline over downwardly revised June rate of 585,000 and is 29.6% below the July 2021 estimate of 726,000. Sales-adjusted inventory levels are at an elevated 10.9 months’ supply in July. However, only 45,000 of the new home inventory is completed and ready to occupy. This count has been going up in recent months and is up 40.6% compared to a year ago. Moreover, sales are increasingly coming from homes that have not started construction, with that count up 22.6% year-over-year, not seasonally adjusted (NSA). The median sales price increased to $439,400 in July, up 5.9% compared to June and is up 8.2% compared to a year ago. Nationally, on a year-to-date basis, new home sales are down 15.7% for the first seven months of 2022. Regionally, on a year-to-date basis, new home sales fell in all four regions, down 14.9% in the Northeast, 26.5% in the Midwest, 13.4% in the South, and 15.7% in the West. Related ‹ Employment Situation in July: State-Level AnalysisTags: economics, home building, housing, new home sales, sales, single-family

New Home Sales Plummet in July2022-08-23T10:18:28-05:00

Staying safe during the Coronavirus pandemic.

2021-05-11T08:19:31-05:00

By Hillwood Communities on July 30, 2020 • As we all continue to navigate the disruptive beast that is the Coronavirus, Hillwood Communities is working diligently to continue to partner with our Realtor community to make the sales process as

Staying safe during the Coronavirus pandemic.2021-05-11T08:19:31-05:00

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