New Home Sales Uptick in December But Market Weakness Remains

2023-01-26T16:25:34-06:00

While new home sales posted a modest gain in December, elevated mortgage rates and higher construction costs continue to hinder housing affordability and put a damper on consumer demand. The U.S. Department of Housing and Urban Development and the U.S. Census Bureau estimated sales of newly built, single-family homes in December at a 616,000 seasonally adjusted annual pace, which is a 2.3% increase over downwardly revised November rate of 602,000 and is 26.6% below the December 2021 estimate of 839,000. 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 December reading of 616,000 units is the number of homes that would sell if this pace continued for the next 12 months. Sales-adjusted inventory levels are at an elevated 9.0 months’ supply in December. A measure near a 6.0 months’ supply is considered balanced. A year ago, there were just 35,000 completed, ready to occupy homes available for sale (not seasonally adjusted). By December 2022, that number increased 117% to 76,000, reflecting flagging demand and more standing inventory due to lower sales. Completed, ready to occupy inventory however remains just 16.5% of total inventory and homes under construction accounts for 62.6 of the inventory. Home that has not started construction when the sales contract is signed accounts for 20.9% of new homes sold in December. The median sales price decreased 3.7% to $442,100 in December but is up 7.8% compared to a year ago due to higher construction costs. The number of entry-level homes priced below $300,000 has been steadily falling in recent years. In 2021, 23% of new home sold were priced below $300,000. That share has now fallen to 10%. In 2022, there were 266,000 homes that were priced above $500,000 compared to 226,000 in 2021. Nationally, on a year-to-year basis, 644,000 new homes were sold in 2022. This is 16.4% below the 2021 level of 771,000. Regionally, on a year-to-year basis, new home sales fell in all four regions, down 8.2% in the Northeast, 22.1% in the Midwest, 13.0% in the South and 23.5% in the West. Related ‹ Economic Growth and Signs of Cooling Inflation End 2022Tags: economics, home building, housing, new home sales, sales, single-family

New Home Sales Uptick in December But Market Weakness Remains2023-01-26T16:25:34-06:00

2022 Ends With A Decline in Single-Family Starts For the First Time Since 2011

2023-01-19T12:09:54-06:00

Led by a decline in multifamily production, overall housing starts decreased 1.4% to a seasonally adjusted annual rate of 1.38 million units in December, according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Also of note, single-family housing starts ended the year down more than 10%, marking the first annual decline since 2011. The December reading of 1.38 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 11.3% to a 909,000 seasonally adjusted annual rate. The three-month moving average (a useful gauge given recent volatility) inched up to 862,000 starts, as charted below. However, single-family housing starts are down 25% compared to December 2021. The multifamily sector, which includes for-rent apartment buildings and condos, decreased 19% to a 473,000 pace for 2+ unit construction in December. The three-month moving average for multifamily construction has been a solid 541,000-unit annual rate. One a year-over-year basis, multifamily construction is down 14.9%. Total housing starts for 2022 were 1.55 million, a 3% decline from the 1.60 million total from 2021. Single-family starts in 2022 totaled 1.01 million, down 10.6% from the previous year. Multifamily starts (2+) in 2022 were up 15.1% compared to the previous year and exceeded a 500,000 annual pace for the first time since the Great Recession. On a regional and year-to-year basis, combined single-family and multifamily starts are 5% higher in the Northeast, 5.7% lower in the Midwest, 1.6% lower in the South and 7.2% lower in the West. As an indicator of the economic impact of housing, there are now 769,000 single-family homes under construction. This is 0.1% lower than a year ago. There are currently 943,000 apartments under construction, up 24.9% compared to a year ago (755,000). Total housing units now under construction (single-family and multifamily combined) is 12.3% higher than a year ago. Overall permits decreased 1.6% to a 1.33 million unit annualized rate in December and are down 29.9% compared to December 2021. Single-family permits decreased 6.5% to a 730,000 unit rate and are down 34.7% compared to December 2021. Multifamily permits increased 5.3% to a 600,000 unit pace. Total permits for 2022 were 1.65 million units, a 5% decline from the 1.74 million unit total from 2021. Single-family permits in 2022 totaled 972,000 unit rate, down 12.9% from the previous year. Multifamily permits in 2022 were up 9.0% compared to the previous year. Looking at regional permit data on a year-to-year basis, permits are 13.6% lower in the Northeast, 3.4% lower in the Midwest, 2.4% lower in the South and 8.3% lower in the West. Related ‹ Remodeling Market Sentiment Weakened in Fourth Quarter but Remains PositiveTags: economics, home building, housing, multifamily, single-family, starts

2022 Ends With A Decline in Single-Family Starts For the First Time Since 20112023-01-19T12:09:54-06:00

Single-Family Permits Decreased in November 2022

2023-01-17T09:20:28-06:00

Over the first eleven months of 2022, the total number of single-family permits issued year-to-date (YTD) nationwide reached 921,626. On a year-over-year (YoY) basis, this is 10.5% below the November 2021 level of 1,029,208. Year-to-date ending in November, single-family permits declined in all four regions. The South posted a decline of 8.4%, while the West region reported the steepest decline of 13.9%. The Northeast declined by 10.2% and the Midwest declined by 13.6% in single-family permits during this time. On the other hand, multifamily permits posted increased in all but one region, Northeast (-1.4%). Permits were 25.2% higher in the South, 18.0% higher in the Midwest, and 5.6% higher in the West. Between November 2021 YTD and November 2022 YTD, five states and the District of Columbia saw growth in single-family permits issued. New Mexico recorded the highest growth rate during this time at 37.5% going from 5,083 permits to 6,989. Forty-five states reported a decline in single-family permits during this time with Colorado posting the steepest decline of 27.9% declining from 31,741 permits to 22,900. The ten states issuing the highest number of single-family permits combined accounted for 63.4% of the total single-family permits issued. Year-to-date, ending in November, the total number of multifamily permits issued nationwide reached 624,128. This is 14.8% ahead of the November 2021 level of 543,508. Between November 2021 YTD and November 2022 YTD, 37 states and the District of Columbia recorded growth, while 13 states recorded a decline in multifamily permits. Georgia led the way with a sharp rise (141.7%) in multifamily permits from 11,385 to 27,520 while Delaware had the largest decline of 57.5% from 1,235 to 525. The ten states issuing the highest number of multifamily permits combined accounted for 63.3% of the multifamily permits issued. At the local level, below are the top ten metro areas that issued the highest number of single-family permits. Metropolitan Statistical Area Single-Family Permits: Nov-22 (Units #YTD, NSA) Houston-The Woodlands-Sugar Land, TX                                                                                      45,584 Dallas-Fort Worth-Arlington, TX                                                                                      41,275 Phoenix-Mesa-Scottsdale, AZ                                                                                      25,831 Atlanta-Sandy Springs-Roswell, GA                                                                                     25,278 Austin-Round Rock, TX                                                                                      20,589 Charlotte-Concord-Gastonia, NC-SC                                                                                      17,900 Orlando-Kissimmee-Sanford, FL                                                                                      15,110 Tampa-St. Petersburg-Clearwater, FL                                                                                     14,785 Nashville-Davidson–Murfreesboro–Franklin, TN                                                                                      14,523 Jacksonville, FL                                                                                     13,345 For multifamily permits, below are the top ten local areas that issued the highest number of permits. Metropolitan Statistical Area  Multifamily Permits: Nov-22 (Units #YTD, NSA) New York-Newark-Jersey City, NY-NJ-PA                                                                                   43,165 Dallas-Fort Worth-Arlington, TX                                                                                   30,980 Houston-The Woodlands-Sugar Land, TX                                                                                   26,012 Austin-Round Rock, TX                                                                                 21,855 Los Angeles-Long Beach-Anaheim, CA                                                                                   19,959 Atlanta-Sandy Springs-Roswell, GA                                                                                   18,964 Washington-Arlington-Alexandria, DC-VA-MD-WV                                                                                   18,410 Seattle-Tacoma-Bellevue, WA                                                                                   18,405 Phoenix-Mesa-Scottsdale, AZ                                                                                   17,149 Minneapolis-St. Paul-Bloomington, MN-WI                                                                                 14,802 Related ‹ Material Shortages Ease, With Notable ExceptionsTags: home building, multifamily, single-family, state and local markets, state permits

Single-Family Permits Decreased in November 20222023-01-17T09:20:28-06:00

Single-Family Production Continues to Decline, Multifamily Permits Weakening

2022-12-20T09:18:53-06:00

Single-family housing starts continued to fall in November, with the pace of construction down 32% since February when mortgage rates began to rise. The housing market continues to weaken because stubbornly high construction costs and elevated interest rates are harming housing affordability. And with the count of multifamily units under construction reaching a near 50-year high, multifamily permit growth is weakening. Overall housing starts decreased 0.5% to a seasonally adjusted annual rate of 1.43 million units in November, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The November reading of 1.43 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 4.1% to an 828,000 seasonally adjusted annual rate. Year-to-date, single-family starts are down 9.4%. Single-family starts are down on falling affordability conditions and lingering supply-chain issues, particularly for electrical transformers. For the last four months, there have been more single-family homes that completed construction than have been started over the past four months, per the non-seasonally adjusted estimates. The November data shows there were 25,500 more single-family homes completed than started for the month, thus pushing down the number of new homes under construction. Overall permits decreased 11.2% to a 1.34 million unit annualized rate in November. Single-family permits decreased 7.1% to a 781,000 unit rate. Multifamily starts, which includes apartment buildings and condos, increased 4.9% to an annualized 599,000 pace in November. Multifamily permits decreased 16.4% to an annualized 561,000 pace, the lowest reading for apartment permits since September 2021. We are forecasting declines for apartment construction in 2023 due to the large amount of supply in the construction pipeline, as well as tightening commercial real estate finance conditions. The number of multifamily units under construction for November was 932,000; this is the highest number since December 1973. The number of single-family units under construction has fallen for six consecutive months, declining to 777,000 homes in November. On a regional and year-to-date basis, combined single-family and multifamily starts are 1.3% higher in the Northeast, 0.8% higher in the Midwest, 0.6% higher in the South and 7.0% lower in the West. Looking at regional permit data on a year-to-date basis, permits are 5.6% lower in the Northeast, 0.5% lower in the Midwest, 0.6% lower in the South and 6.5% lower in the West. Related ‹ Reflecting a Weakening Housing Market, Builder Confidence Declined Every Month in 2022Tags: home building, housing, multifamily, single-family, starts

Single-Family Production Continues to Decline, Multifamily Permits Weakening2022-12-20T09:18:53-06:00

Single-Family Permits Continues On A Downward Trend in October 2022

2022-12-16T19:15:39-06:00

Over the first ten months of 2022, the total number of single-family permits issued year-to-date (YTD) nationwide reached 865,815. On a year-over-year (YoY) basis, this is 8.7% below the October 2021 level of 948,321. Year-to-date ending in October, single-family permits declined in all four regions. The South posted a modest decline of 6.8%, while the Midwest and the West regions reported the steepest decline of 11.6%. The Northeast declined by 9.7% in single-family permits during this time. On the other hand, multifamily permits posted increased in all four regions. Permits were 27.7% higher in the South, 17.8% higher in the Midwest, 9.1% higher in the West, and 2.4% higher in the Northeast. Between October 2021 YTD and October 2022 YTD, seven states saw growth in single-family permits issued. New Mexico recorded the highest growth rate during this time at 39.2% going from 4,718 permits to 6,567. Forty-three states and the District of Columbia reported a decline in single-family permits during this time with Colorado posting the steepest decline of 26.0% declining from 29,358 permits to 21,726. The ten states issuing the highest number of single-family permits combined accounted for 63.5% of the total single-family permits issued. Year-to-date, ending in October, the total number of multifamily permits issued nationwide reached 575,671. This is 17.4% ahead of the October 2021 level of 490,172. Between October 2021 YTD and October 2022 YTD, 39 states and the District of Columbia recorded growth, while 11 states recorded a decline in multifamily permits. Georgia led the way with a sharp rise (168.7%) in multifamily permits from 9,237 to 24,818 while Delaware had the largest decline of 61.5% from 968 to 373. The ten states issuing the highest number of multifamily permits combined accounted for 63.5% of the multifamily permits issued. At the local level, below are the top ten metro areas that issued the highest number of single-family permits. Metropolitan Statistical Area Single-Family Permits: Oct-22 (Units #YTD, NSA) Houston-The Woodlands-Sugar Land, TX                                                                                      42,826 Dallas-Fort Worth-Arlington, TX                                                                                      39,154 Phoenix-Mesa-Scottsdale, AZ                                                                                      24,470 Atlanta-Sandy Springs-Roswell, GA                                                                                     23,805 Austin-Round Rock, TX                                                                                      19,582 Charlotte-Concord-Gastonia, NC-SC                                                                                      16,806 Orlando-Kissimmee-Sanford, FL                                                                                      14,099 Tampa-St. Petersburg-Clearwater, FL                                                                                     13,733 Nashville-Davidson–Murfreesboro–Franklin, TN                                                                                      13,594 Jacksonville, FL                                                                                     12,551 For multifamily permits, below are the top ten local areas that issued the highest number of permits. Metropolitan Statistical Area  Multifamily Permits: Oct-22 (Units #YTD, NSA) New York-Newark-Jersey City, NY-NJ-PA                                                                                   40,527 Dallas-Fort Worth-Arlington, TX                                                                                   28,844 Houston-The Woodlands-Sugar Land, TX                                                                                   24,121 Austin-Round Rock, TX                                                                                  20,505 Los Angeles-Long Beach-Anaheim, CA                                                                                   18,600 Seattle-Tacoma-Bellevue, WA                                                                                   17,181 Atlanta-Sandy Springs-Roswell, GA                                                                                   17,018 Washington-Arlington-Alexandria, DC-VA-MD-WV                                                                                   16,892 Phoenix-Mesa-Scottsdale, AZ                                                                                   16,454 Minneapolis-St. Paul-Bloomington, MN-WI                                                                                   14,053 Related ‹ The Size of the Housing Shortage: 2021 DataTags: home building, multifamily, single-family, state and local markets, state permits

Single-Family Permits Continues On A Downward Trend in October 20222022-12-16T19:15:39-06:00

Nearly Two-Thirds of Homes Started in 2021 are in Community Associations

2022-12-15T10:24:18-06:00

By Ashok Chaluvadi on December 15, 2022 • According to data from the Census Bureau’s Survey of Construction (SOC), 65.5 percent of single-family homes started in 2021 were built within a community or homeowner’s association. Since the re-design of the SOC in 2009, this was the second highest percentage for new homes started with an association. The Census Bureau defines community or homeowner’s associations as “formal legal entities created to maintain common areas of a development and to enforce private deed restrictions; these organizations are usually created when the development is built, and membership is mandatory.”  In absolute numbers, a total of 729,109 homes with community associations were started in 2021, compared to 657,378 in 2020. The share of all new homes built within a community or homeowner’s association declined slightly to 62.0 percent in 2019, after a decade long upward trend. In 2009, the share was 47.6 percent, and in 2010, 48.0 percent. Since 2011, more than 50 percent of all homes have been built within a community or homeowner’s association. In 2018, the share was 62.5 percent, the second highest and in 2021, 67.1 percent was the highest since 2009. When analyzed by the 9 census divisions, the highest share was in the Mountain Division, where 82.4 percent of new homes were in such communities. In the New England Division, on the other hand, the share was only 34.5 percent. In the West South-Central Division, 73.1 percent of new homes started in 2021 had a community or homeowner’s association, followed by the South Atlantic Division at 71.3 percent, and the East North-Central Divisions at 54.9 percent. In the Pacific Division, the share was 52.1 percent, while in the West North-Central Division, it was 50.6 percent. In the East South-Central and Middle Atlantic Division 39.4 percent and 35.8 percent of new homes started in 2021 were within a community or homeowner’s association, respectively. Related ‹ Property Taxes by State – 2021Tags: eye on the economy, home building, housing economics, single-family

Nearly Two-Thirds of Homes Started in 2021 are in Community Associations2022-12-15T10:24:18-06:00

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

Flat Readings for Single-Family Built-for-Rent

2022-11-17T11:19:57-06:00

Single-family built-for-rent construction leveled off during the third quarter of 2022 as the overall housing market slowed. This occurred after an exceptionally strong second quarter for rental housing production. According to NAHB’s analysis of data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design, there were approximately 16,000 single-family built-for-rent (SFBFR) starts during the third quarter of 2022. This is 6% lower compared to the third quarter 2021 total. Over the last four quarters, 68,000 such homes began construction, which is a 42% increase compared to the 48,000 estimated SFBFR starts in the prior four quarters. The SFBFR market is a source of inventory amid challenges over housing affordability and downpayment requirements in the for-sale market, particularly during a period when a growing number of people want more space and a single-family structure. Single-family built-for-rent construction differs in terms of structural characteristics compared to other newly-built single-family homes, particularly with respect to home size. Given the relatively small size of this market segment, the quarter-to-quarter movements typically are not statistically significant. The current four-quarter moving average of market share (6%) is nonetheless higher than the historical average of 2.7% (1992-2012) and sets a data series high as this submarket expands. Importantly, as measured for this analysis, the estimates noted above only include homes built and held by the builder for rental purposes. The estimates exclude homes that are sold to another party for rental purposes, which NAHB estimates may represent another five percent or higher of single-family starts based on industry surveys. Indeed, the Census data notes an elevated share of single-family homes built as condos (non-fee simple), with this share averaging 4% over recent quarters. Some, but not all, of these homes will be used for rental purposes. Additionally, it is theoretically possible some single-family built-for-rent units are being counted in multifamily starts, as a form of “horizontal multifamily,” given these units are often built on single plat of land. However, spot checks by NAHB with permitting offices indicate no evidence of this data issue occurring at scale thus far. With the onset of the Great Recession and declines for the homeownership rate, the share of built-for-rent homes increased in the years after the recession. While the market share of SFBFR homes is small, it has clearly been trending higher. As more households seek lower density neighborhoods and single-family residences, a growing number will do so from the perspective of renting. This will be particularly true as mortgage interest rates remain elevated and increase. Thus, the SFBFR market will expand in the quarters ahead. Related ‹ Multifamily Developer Confidence Declines Significantly in the Third QuarterTags: economics, home building, housing, SFBFR, single family built for rent, single-family

Flat Readings for Single-Family Built-for-Rent2022-11-17T11:19:57-06:00

Single-Family Permits Decline in September 2022

2022-11-15T09:18:27-06:00

Over the first nine months of 2022, the total number of single-family permits issued year-to-date (YTD) nationwide reached 800,424. On a year-over-year (YoY) basis, this is 7.4% below the September 2021 level of 864,184. Year-to-date ending in September, single-family permits declined in all four regions. The South posted a modest decline of 5.4%, while the Midwest region reported the steepest decline of 11.0%. The Northeast declined by 8.6% and the Western region reported an 10.0% decline in single-family permits during this time. On the other hand, multifamily permits posted increased in all four regions. Permits were 24.4% higher in the South, 22.5% higher in the Midwest, 11.3% higher in the West, and 6.0% higher in the Northeast. Between September 2021 YTD and September 2022 YTD, seven states saw growth in single-family permits issued. New Mexico recorded the highest growth rate during this time at 35.2% going from 4,432 permits to 5,993. Forty-three states and the District of Columbia reported a decline in single-family permits during this time with the District of Columbia posting the steepest decline of 36.9% declining from 328 permits to 207. The ten states issuing the highest number of single-family permits combined accounted for 63.7% of the total single-family permits issued. Year-to-date, ending in September, the total number of multifamily permits issued nationwide reached 516,955. This is 17.8% ahead of the September 2021 level of 438,700. Between September 2021 YTD and September 2022 YTD, 41 states and the District of Columbia recorded growth, while nine states recorded a decline in multifamily permits. Georgia led the way with a sharp rise (159.9%) in multifamily permits from 8,375 to 21,766 while Delaware had the largest decline of 75.1% from 962 to 240. The ten states issuing the highest number of multifamily permits combined accounted for 63.5% of the multifamily permits issued. At the local level, below are the top ten metro areas that issued the highest number of single-family permits. Metropolitan Statistical Area Single-Family Permits: Sep-22 (Units #YTD, NSA) Houston-The Woodlands-Sugar Land, TX                                                                                          39,590 Dallas-Fort Worth-Arlington, TX                                                                                          36,445 Phoenix-Mesa-Scottsdale, AZ                                                                                          23,399 Atlanta-Sandy Springs-Roswell, GA                                                                                          21,743 Austin-Round Rock, TX                                                                                          18,320 Charlotte-Concord-Gastonia, NC-SC                                                                                          15,496 Orlando-Kissimmee-Sanford, FL                                                                                          13,017 Nashville-Davidson–Murfreesboro–Franklin, TN                                                                                          12,781 Tampa-St. Petersburg-Clearwater, FL                                                                                          12,639 Jacksonville, FL                                                                                          11,395 For multifamily permits, below are the top ten local areas that issued the highest number of permits.  Metropolitan Statistical Area  Multifamily Permits: Sep-22 (Units #YTD, NSA) New York-Newark-Jersey City, NY-NJ-PA                                                                                        38,978 Dallas-Fort Worth-Arlington, TX                                                                                        24,071 Houston-The Woodlands-Sugar Land, TX                                                                                        21,070 Austin-Round Rock, TX                                                                                        18,682 Los Angeles-Long Beach-Anaheim, CA                                                                                        16,008 Washington-Arlington-Alexandria, DC-VA-MD-WV                                                                                        15,484 Seattle-Tacoma-Bellevue, WA                                                                                        15,208 Atlanta-Sandy Springs-Roswell, GA                                                                                        14,831 Phoenix-Mesa-Scottsdale, AZ                                                                                        13,816 Minneapolis-St. Paul-Bloomington, MN-WI                                                                                        12,617   Related ‹ Patios Continue to Substitute for Decks on New HomesTags: home building, multifamily, single-family, state and local markets, state permits

Single-Family Permits Decline in September 20222022-11-15T09:18:27-06:00

New Home Sales Fall Back in September

2022-10-26T19:15:08-05:00

Rising mortgage rates approaching 7% along with declining builder sentiment stemming from stubbornly high construction costs and weakening consumer demand pushed new-home sales down at a double-digit rate in September. Following a brief uptick in August, sales of newly built, single-family homes in September fell 10.9% to a 603,000 seasonally adjusted annual rate, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Builders continue to face lower buyer traffic due to declining affordability conditions as the housing downturn continues. New home sales are down 14.3% on a year-to-date basis compared to 2021. Moreover, sales are now down 1.9% on the same basis compared to 2019 levels that were prior to the Covid-related changes to interest rates. 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 September reading of 603,000 units is the number of homes that would sell if this pace continued for the next 12 months. Notably, the new home sales data does not incorporate cancellations, which according to NAHB survey data have more than doubled compared to a year ago. New single-family home inventory remained elevated at a 9.2 months’ supply (of varying stages of construction). A measure near a 6 months’ supply is considered balanced. The count of homes available for sale, 462,000, is up 23.2% over last year. Of this total, only 56,000 of the new home inventory is completed and ready to occupy. The remaining have not started construction or are currently under construction. Reflecting rising construction costs, the median new home price in August was $470,600, up 13.9% from a year ago. However, NAHB surveys indicate that a quarter of builders are now cutting prices, thus recent months’ price data reflects a composition change, with sales lost at the low end of the market pushing the median price higher. In September 2022, there were 20,000 sales priced below $300,000. In September 2021, sales in this price range totaled only 6,000. Regionally, on a year-to-date basis, new home sales fell in all four regions, down 8.1% in the Northeast, 21.2% in the Midwest, 12.1% in the South and 17.6% in the West. Related ‹ More Buyers Taking a Look at New ConstructionTags: economics, home building, housing, sales, single-family

New Home Sales Fall Back in September2022-10-26T19:15:08-05:00

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