Mortgage News in the Carolinas
Posts tagged New Home Sales
Supply Of New Homes At 6.1 Months Nationwide
07 days
by Geoff Brown
in Housing Analysis
New Home Sales slowed into the New Year but the market for newly-built homes remains strong. For home buyers in Carolinas and nationwide, December’s New Home Sales report is yet one more signal that the housing market recovery may be underway.
According to the Census Bureau, the number of new homes sold in December 2011 slipped 2 percent to 307,000 units on a seasonally-adjusted, annualized basis nationwide.
A “new home” is a home that is considered new construction; a home for which the buyer will be the first owner and tenant.
As compared to December 2010, last months’ sales volume fell seven percent. It’s a statistic that suggests housing market weakness. However, in looking at a different component of the New Home Sales report — the supply of homes for sale — we’re forced to reconsider.
At the current pace of sales, every new home for sale nationwide would be “sold” in a matter of 6.1 months.
Economists believe that a 6.0-month supply defines a market in balance — anything quicker is termed a “seller’s market”. Statistics like that are enough to create urgency among today’s Charlotte home buyers.
Unfortunately, the Census Bureau’s data may be wrong.
Although December’s New Home Sales report shows sales down 2 percent, the government’s data was published with a ±13.2% margin of error. This means that the actual New Home Sales figure may have been as low as -15.2 percent, or as high as +11.2 percent. And, because the range of possible values includes both positive and negative numbers, the Census Bureau had no choice but to assign its December data “Zero Confidence”.
It will be a few months before final revisions are made to December New Home Sales data. Until then, therefore, buyers should take cues from the market-at-large and the market-at-large hints at recovery. One example of this is homebuilders showing more confidence in their product than at any time in the last 5 years.
If your plans for 2012 call for buying new construction, therefore, consider using this lull to “make a deal”. As the year progresses, the great values in housing may be gone.
Behind The Housing Starts Headlines, The Story That Matters
018 days
by Geoff Brown
in Housing Analysis
When it comes to housing data, sometimes you have to look past the headlines. December’s Housing Starts data offers a terrific illustration of why.
Each month, the Census Bureau tallies Housing Starts for the month prior. A “housing start” is a home on which construction has started.
The Housing Starts report is separated by property type. There is a count for single-family homes; a count for 2-4 unit homes; and a count for buildings of 5 units or more, a category including apartments and condominiums.
In December, as reported by the government, Housing Starts fell 4 percent nationwide overall. This runs contrary to recent strength in housing and the story was quickly picked up by the press :
- U.S. Housing Starts Fall More Than Forecast (BusinessWeek)
- U.S. Housing Starts Fall (MarketWatch)
- December Housing Starts Are Worse Than Expected (Fox Business)
Now, although these headlines are factually true, they’re also are a little bit misleading.
Housing Starts did fall 4 percent last month but that was for all Housing Starts, across all three property types. Data like this is somewhat irrelevant to home buyers in Carolinas or anywhere else nationwide.
Few buyers purchase 2-4 unit homes, and almost nobody purchases an entire apartment building. Rather, it’s the Housing Starts reports’ “single-family” tally that matters because that’s the home type that the majority of home buyers purchase.
In December, for the fourth straight month, Single-Family Housing Starts increased.
Single-family housing starts climbed 4 percent last month to 470,000 units on a seasonally-adjusted, annualized basis. This is the highest number of Single-Family Housing Starts since April 2010 — the last month of last year’s home buyer tax credit.
The Single-Family Housing Starts data is the latest in a series of data that point to a housing rebound nationwide. New Home Sales, Existing Home Sales, Pending Home Sales and Homebuilder Confidence has each posted multi-month highs and all are poised for strong gains into 2012.
If you’re planning to buy a home in 2012, consider buying in between now and March rather than at some point later. Home prices — and mortgage rates- are likely to move higher.
New Home Supplies Fall To An 18-Month Low
070 days
by Geoff Brown
in Housing Analysis
If you plan to buy of new construction in Carolinas sometime in 2012, don’t expect today’s low prices. Like everything in housing of late, the market for newly-built homes appears to be stabilizing and, in some markets, improving.
As foreshadowed by this month’s strong Homebuilder Confidence survey, the Census Bureau reports that the number of new homes sold rose to a 6-month high in October, climbing to 307,000 units on a seasonally-adjusted, annualized basis.
A “new home” is a home that is considered new construction. It’s the opposite of an “existing home”.
Home buyers are comparing new construction to home resales and liking what they see. At the current sales pace, the nation’s complete new home inventory would now be depleted in just 6.3 months. This marks the lowest home supply since April 2010 — the last month of the last year’s federal homebuyer tax credit.
By building only to meet new demand, builders are keeping home supplies in check, and home prices stable. They’ve also found a niche market – 80% of homes sold last month sold for less than $300,000.
Split by region, the Census Bureau reports October’s New Home Sales as follows :
- Northeast Region : +0.0% from September 2011
- Midwest Region : +22.2% from September 2011
- South Region : -9.5% from September 2011
- West Region : -14.9% from September 2011
Unfortunately, the data may be incorrect.
Although the October New Home Sales report says that sales climbed 1.3 percent last month, the government’s data was published with a ±19.7% margin of error. This means that the actual New Home Sales reading may have been as high as +21.0 percent, or as low as -18.4 percent. Because the range of values includes both positive and negative values, the Census Bureau assigned its October data “zero confidence”.
As home buyers, then, we can’t take our market cues from the published data. Instead, we should look to other metrics including Housing Starts data and the aforementioned homebuilder confidence survey. Each points to strength in the new home market, and foretells higher home prices in 2012.
If you’re in the market for new construction, consider writing an offer soon. Home prices remain low and mortgage rates do, too — a combination that keeps home payments low. Next year, that may not be the case.
New Home Supply Falls To 16-Year Low
0286 days
by Geoff Brown
in Housing Analysis
After posting an all-time low in February, New Home Sales rebounded strongly last month.
Based on joint research from the Census Bureau and HUD, 300,000 new, single-family homes were sold on a seasonally-adjusted, annualized basis in March. It’s an 11 percent improvement from February, and right in-line with the 6-month average.
The supply of available new homes improved, too, in March, falling by close to a full month.
At the current pace of sales, the entire new home housing stock would be sold in 7.3 months. This is the second-best reading in a year, a statistic partially-supported by the relatively small number of new homes on the market.
There are now just 183,000 new homes available for sale across Charlotte and the country. That’s the smallest reading since the Census Bureau started to keep New Home Sales records beginning in 1995.
However, it should be noted that the March New Home Sales data is suspect. The reading’s margin of error exceeds it actual measurement by almost double. It’s possible that sales volume fell in March instead of rising, therefore. The Census Bureau says as much in its footnotes:
The change [in new home sales] is not statistically significant; that is, it is uncertain whether there was an increase or decrease [in March 2011].
We won’t know for certain until future data revisions are made.
If you’re a home buyer , though, and want to stay ahead of the market, you won’t want to take chances. If the Census Bureau finds its data to be accurate after revisions are made, new home prices will already have started to rise.
You may get your best home value by buying sooner rather than later.
