New Home Sales Increase in July

2023-08-23T10:30:18-05:00

By Robert Dietz on August 23, 2023 • Low existing inventory and solid demand more than offset rising mortgage rates and elevated construction costs to boost new home sales last month. Sales of newly built, single-family homes in July increased 4.4% to a 714,000 seasonally adjusted annual rate from a downwardly revised reading in June, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales in July was up 31.5% from a year ago. New home sales were solid in July because of an ongoing housing deficit in the U.S. and a lack of resales stemming from many home owners electing to stay put to preserve their low mortgage rates. However, despite this monthly uptick, new home sales will likely weaken in August as higher interest rates price out prospective buyers. Mortgage rates increased from 6.7% at the start of July to above 7% in August. New single-family home inventory in July was 437,000, up 4.8% compared to a year ago. This represents a 7.3 months’ supply at the current building pace. A measure near a 6 months’ supply is considered balanced. Of the total home inventory, including both new and resale homes, 31% of homes available for sale are newly built. 17% of new home inventory was completed ready-to-occupy homes. This is up from approximately 9% from a year ago. The median new home sale price in July was $436,700, down roughly 9% compared to a year ago. Pricing is down both due to builder incentive use and a shift towards building slightly smaller homes. Regionally, on a year-to-date basis, new home sales are up 5.0% in the Northeast, 1.0% in the Midwest and 3.5% in the South. New home sales are down 8.1% in the affordability-challenged West. Related ‹ Missing Middle Construction WeakensTags: home building, housing, new home sales, sales

New Home Sales Increase in July2023-08-23T10:30:18-05:00

New Home Sales Increasingly Backed by FHA Loans

2023-08-03T08:24:32-05:00

NAHB analysis of the most recent Quarterly Sales by Price and Financing report reveals that the share of new home sales backed by FHA loans climbed from 12.1% (revised) to 14.0% in the second quarter of 2023. It is the largest share since Q1 2021 but roughly three percentage points lower than the post-Great Recession average. Conventional loans financed 73.7% of new home sales, down one percentage point over the quarter and 2.7ppt, year-over-year. The share of VA-backed sales edged up from 5.2% to 5.4%, a 0.8 ppt decline over the past year. Cash purchases made up 6.5% of new home sales in the second quarter of 2023. The share has declined each of the past two quarters and is down 4.2 ppt over that period. The share of cash purchases has decreased 2.9 percentage points over the past year and has ranged from 4.1% to 10.7% since Q2 2020. Although cash sales 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, 26% of existing home transactions were all-cash sales in June 2023, up from 25.0% in May and June 2022. Price by Type of Financing 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 $416,100. Split by types of financing, the median prices of new homes financed with conventional loans, FHA loans, VA loans, and cash were $458,100, $346,500, $392,600, and $364,800, respectively. The purchase price of new homes declined over the past year, regardless of means of financing. The largest drop occurred in cash sales prices which fell 20.1% over the year. This is in stark contrast to year-over-year price changes in the second quarter of 2021 and 2022 (see below). Related ‹ Homeownership Rates for Households Aged Under 35 Fell to 38.5%Tags: conventional loans, conventional loans market share, existsing home sales, FHA, FHA loans, finance, home price appreciation, housing finance, lending, mortgage lending, new home cash purchases, new home prices, new home sales, sales by financing, VA

New Home Sales Increasingly Backed by FHA Loans2023-08-03T08:24:32-05:00

Pace of Sales Cool in June

2023-07-26T11:27:38-05:00

Rising mortgage rates and elevated construction costs put a damper on new home sales last month. The U.S. Department of Housing and Urban Development and the U.S. Census Bureau estimated sales of newly built, single-family homes in June at a 697,000 seasonally adjusted annual pace, which is a 2.5% decline over a downwardly revised reading of 715,000 in May. However, new home sales are up 23.8% from a year ago. A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the June reading of 697,000 units is the number of homes that would sell if this pace continued for the next 12 months. New single-family home inventory increased 2.8% in June and remained elevated at a 7.4 months’ supply at the current building pace. A measure near a 6 months’ supply is considered balanced. Total new home inventory peaked in October at 466,000 and has been declining since that time, with a total inventory of 432,000 available for sale in June. A year ago, there were just 35,000 completed, ready-to-occupy homes available for sale (not seasonally adjusted). By June 2023, that number increased 91.4% to 67,000, reflecting flagging demand and more standing inventory due to lower sales. Completed, ready-to-occupy inventory, however, remains just 15% of total inventory and homes under construction account for 60% of the inventory. Homes that have not started construction when the sales contract is signed account for 25% of new homes sold in June. The median new home sale price fell 0.5% in June to $415,400 and is down 4.0% compared to a year ago. Stability in building material costs, especially lumber prices, have contributed to a fall in home prices. In terms of affordability, the share of entry-level homes priced below $300,000 has been steadily falling in recent years. Only 12% of the homes were priced in this entry-level affordable range while 33% of the homes were priced above $500,000. The majority of homes (53%) were priced between $300,000-$500,000. Regionally, on a year-to-date basis, new home sales are up 4.7% in the Northeast and 3.2% in the South. New home sales are down 7.6% in the Midwest and 16.5% in the affordability-challenged West. Related ‹ Interest for New Homes StrengthensTags: economics, home building, housing, new home sales, sales, single-family

Pace of Sales Cool in June2023-07-26T11:27:38-05:00

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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