Mortgage News in the Carolinas
Posts tagged NAHB
Led By Expectations Of A Strong Fall Season, Homebuilder Confidence Bounces Back
0306 days
by Geoff Brown
in Housing Analysis
Homebuilder confidence is bouncing back.
One month after an unceremonious dip highlighted by poor sales figures and dim prospects for the future, the National Association of Homebuilder’s Housing Market Index rebounded two points to 15 in July.
The monthly Housing Market Index is scored on a 1-100 scale. Readings above 50 indicate favorable conditions for homebuilders and the “new home” market. Readings below 50 indicate unfavorable conditions.
The Housing Market Index has not read higher than 50 in more than 5 years.
As a housing metric, the HMI is actually a composite of three separate surveys, self-reported by builders. The surveys ask about current single-family home sales volume; projected single-family home sales volume; and current buyer foot traffic levels.
In July, the responses read as follows :
- Current single-family sales : 15 (+2 from June)
- Projected single-family sales : 22 (+7 from June)
- Buyer foot traffic : 12 (Unchanged from June)
The most noteworthy reading is the rapid rise in Projected single-family home sales. Although builders aren’t experiencing more foot traffic, they think sales will spike between now and the New Year.
That could spell bad news for Charlotte home buyers.
When builders harbor higher expectations for the future, they’re less willing to make concessions for upgrades and/or price. Your likelihood of getting “a great deal” as a buyer diminishes.
That’s why it’s good that mortgage rates are still so low. Low mortgage rates help with home affordability and can offset slight jumps in sale price.
Mortgage rates remain just above their lowest levels of 2011, and of all-time.
Home Affordability Still Soaring; New Records Reached
0359 days
by Geoff Brown
in Housing Analysis
Home affordability moved higher last quarter, buoyed by stable mortgage rates and falling home prices in Charlotte area and nationwide. The National Association of Home Builders reports that Q1 2011 Home Opportunity Index reached an all-time high for the second straight quarter last quarter.
Nearly 3 of 4 homes sold between January-March 2011 were affordable to households earning the national median income of $64,400. It’s the 9th straight quarter in which home affordability surpassed 70 percent, and the highest reading in more than 20 years of record-keeping.
From metropolitan area-to-metropolitan area, though, affordability varied.
In the Midwest, for example, affordability was high. 7 of the 10 most affordable markets were in the Midwest, including Kokomo, Indiana, in which 98.6% of homes were affordable to median income-earning families. Indianapolis, Indiana placed second for “big city” affordability.
The most affordable “big city” last quarter was Syracuse, New York. With a 94.5% affordability rate, Syracuse ranks 8th nationally in the Home Opportunity Index. It’s the second time that Syracuse placed first in the last 4 quarters.
Meanwhile, on the opposite end of home affordability, the “Least Affordable Major City” title went to the New York-White Plains, NY-Wayne, NJ area for the 12th consecutive quarter. Just 24.1 percent of homes were affordable to households earning the area median income, down more than 1 percent from the last reading.
Regardless of where you live, remember that rising mortgage rates can levy more pain on your household budget than can rising home values. And mortgage rates are expected to rise long before home prices do.
The rankings for all 225 metro areas are available for download on the NAHB website.
As Buyer Traffic Grows, Homebuilder Confidence Slips
0397 days
by Geoff Brown
in Housing Analysis
Homebuilder confidence is falling — a good sign for buyers of newly-built homes.
According to the National Association of Homebuilders, the Housing Market Index slipped one point to 16 in April. It’s the 5th time in 6 months that the index read 16 — a figure exactly in line with the 1-year average, but still considered “poor”. The Housing Market Index reports on a scale of 1-100.
Values of 50 or better representing “favorable conditions”. Values below 50 are considered “unfavorable”.
It’s been 5 years since the Housing Market Index read north of 50.
As an index, the HMI is actually a composite of three separate surveys, the results of which can be as telling as the final, compiled results. The surveys focus on specific aspects about a homebuilder’s business, and use the broader responses to gauge overall market “sentiment”.
The 3 questions are:
- How are market conditions for the sale of new homes today?
- How are market conditions for the sale of new homes in 6 months?
- How is prospective buyer foot traffic?
In April, interestingly, home builders felt market conditions were worse across the board, but still cited higher buyer foot traffic. This may be the result of a combination of rising mortgage rates and falling home values. Both tend to be bad for builders, and both tend to spur home buyers into action.
As a home buyer this spring, therefore, use the HMI data to your advantage. When home builders feel less confident on housing, buyers can often exact better concessions and/or upgrades during the negotiation process.
And, so long as mortgage rates continue to rise, that pressure on builders should build.
Home Affordability Reaches Record-Levels… Last Quarter.
0528 days
by Geoff Brown
in Home Values
Last quarter, with home prices still relatively low and mortgage rates making new, all-time lows almost weekly, the cost of home ownership was extraordinarily low in Carolinas and most U.S. markets.
According to the National Association of Home Builders’ quarterly Home Opportunity Index, 72.5 percent of all new and existing homes sold between June-September 2010 were affordable to families earning the national median income. This ties the all-time high for home affordability, set in the first quarter of 2009.
The data also underscores that, when compared to historical norms, it’s a fantastic time to be a Charlotte home buyer.
Prior to 2009, the Home Opportunity Index rarely topped 65. The index has remained above 70 ever since.
All real estate is local, though, and on a city-by-city basis, home affordability varied last quarter.
For example, 96% of homes sold in Kokomo, IN are affordable for families earning the area’s median income. This handily beat the average figure and led the nation. Looking at major cities, Indianapolis led the pack.
93% of homes in Indianapolis are affordable to families earning the area’s median income. This ranks #9 nationwide.
On the opposite end of the affordability scale is the New York-White Plains, NY-Wayne, NJ region. For the 10th consecutive quarter, the New York Metro region ranks last in U.S. home affordability. Just 23% of homes are affordable to families earning the local median income, although this is 3 points higher versus Q1 2010.
The rankings for all 225 metro areas are available online.
Regardless of where your hometown ranks relative to its neighbors, home affordability remains high as compared to historical values. That said, with mortgage rates rising and home sales expected to climb this winter, it’s unlikely that the Home Opportunity Index will improve.
Buying a home may never be this inexpensive again. If you planned to buy in mid-2011, consider moving up your time frame.
