Mortgage News in the Carolinas
Posts tagged New Home Sales
New Home Supply Falls To 16-Year Low
0389 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.
Pending Home Sales Rebound; Suggest Brighter Spring For Housing
0418 days
by Geoff Brown
in Housing Analysis
On a seasonally-adjusted basis, the Pending Home Sales Index rose 2 percent last month, according to the National Association of REALTORS®. A “pending home sale” is defined as a home under contract to sell, but not yet closed.
February’s Pending Home Sales Index rebound breaks a 2-month losing streak, and reverses the recent downward momentum in housing. Both Existing Home Sales and New Home Sales volume showed a sizable loss last month.
For buyers and sellers of real estate in Charlotte , the Pending Home Sales Index is of particular import. It’s one of the few forward-looking indicators in housing, and February’s data suggests a stronger spring season than was the winter.
Region-by-region, Pending Home Sales data varied:
- Northeast Region: -10.9%
- Midwest Region : +4.0%
- South Region : +2.7%
- West Region : +7.0%
3 of 4 regions showed marked improvement, which is good for housing. In the fourth — New England — it’s likely that inclement weather hampered results.
February was colder-than-normal and the month capped a record-breaking snowfall season for the region. Anecdotally, fewer homes are sold in the cold-and-snow of winter and it’s likely that the weather affected local housing markets.
Looking to March and April, therefore, we should expect Existing Home Sales data to rebound. This is because 80% of “pending” homes close within 60 days, and because improving weather should release pent-up demand for housing.
More sales plus higher home demand tends to lead home prices higher. If you’re in the market for a new home, consider that your best negotiation leverage comes in a weak market. As the seasons turn, your leverage looks poised to slip.
The best time to buy this year may be right now.
Pending Home Sales At The Highest Levels Since April 2010
0474 days
Another day, another strong report for housing.
The Pending Home Sales Index climbed 2 percent in December, according to the National Association of REALTORS®. A “pending home sale” is an existing home under contract to sell, but not yet closed.
Pending Home Sales are up for the fifth time in 6 months. The December reading is now its highest since the federal home buyer tax credit’s April 2010 contract deadline, and the figure is well north of the Pending Home Sales Index 3-year average.
Coupling this data with December’s strong Existing Homes Sales report (+12%) and its strong New Home Sales report (+17%), it’s clear that the housing market has past its trough and is in Recovery Mode.
Even consumer confidence is at an 8-month high.
On a regional basis, December’s Pending Home Sales Index varied as compared against November. The South region led the way, and the West region lagged.
- Northeast Region: +1.8%
- Midwest Region : +8.0%
- South Region : +11.5%
- West Region : -13.2%
Home buyers would do well to study last month’s Pending Home Sales Index. It offers clues of what to expect during the spring buying season. For example, according to the National Association of REALTORS®, 80 percent of homes under contract close within 60 days.
Therefore, we can look at the December Pending Home Sales Index and project, with a high level of confidence, that home sales will be higher throughout February and March on a units-basis.
Furthermore, because the Existing Home Sales and New Home Sales reports show that housing stock is falling nationwide, spring buyers in Charlotte will notice find more competition for the available housing stock. As the Supply-and-Demand curve shifts towards sellers, home prices rise.
In other words, there’s no rush to buy a home, but as the year progresses, home prices are expected to rise, as are mortgage rates. This one-two combination will impact home affordability negatively. And the higher that mortgage rates go, the worse the damage.
Your home-buying dollar won’t go as far in 2011′s second half as it will go right now. If you have plans to buy a home in 2011, consider moving up your time-frame.
New Home Sales Rise In November; Hint At Strong Winter 2011
0509 days
by Geoff Brown
in New Home Sales
Like most housing data in November, the most recent New Home Sales report showed sales volume increasing last month, and home supplies falling.
According to the U.S. Department of Commerce, sales of new, single-family homes increased to 290,000 in November on an annual basis, a figure equal to the New Home Sales 6-month rolling average, and a 6 percent improvement from October.
At the current pace of sales, the national supply of new homes for sale will be exhausted in 8.2 months — a strong 0.6-month improvement from October.
This data is consistent with the most recent Existing Home Sales report. It showed sales volume rising 6 percent, too, and a similarly-strong inventory drop.
For the housing market in Charlotte , it’s another step in the right direction. Since May’s post-tax credit plunge, home prices have stabilized and a foundation for growth has been built. Home builder confidence data highlights this point.
Also interesting in the November New Home Sales report is the volume breakdown by price point. Less expensive homes powered the market:
- Homes under $200,000 : 47 percent of all sales
- Homes between $200,000-$299,999 : 29 percent of all sales
- Homes between $300,000-$399,999 : 14 percent of all sales
Luxury homes accounted for less than 2 percent of sales last month suggesting that builders count first-time and move-up buyers as their core market.
As 2010 comes to a close, housing looks poised for a rebound. Sales in all categories are improving, relative to 6 months ago, and the economy is improving. In conjunction with rising mortgage rates, the best time to buy a new home may be now.
