Archive for NAHB
Homebuilder Confidence Moves To 5-Year High
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Homebuilder Confidence is on the rise once again.
After a brief dip in April, the National Association of Homebuilders reports that the Housing Market Index rose 5 points in May to 29. The increase marks the sharpest climb in homebuilder confidence on a month-to-month basis in 10 years, and raises the index to a 5-year high.
The Housing Market Index is scored from 1-100. Readings above 50 indicate favorable conditions in the single-family new home market overall. Readings below 50 indicate poor conditions.
The HMI has not been above 50 since April 2006.
The Housing Market Index itself is a composite reading as opposed to a straight-up homebuilder survey. The published HMI figure is a compilation of the results of three specific questionnaires sent to NAHB members monthly.
The survey questions are basic :
- 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?
This month, builders are reporting strong improvement across all three surveyed areas. Current home sales are up 5 points; sales expectations for the next six months are up 3 points; and buyer foot traffic is up 5 points to its highest point since 2007.
With mortgage rates low and home prices suppressed, the market for new homes is gaining momentum, a conclusion supported by the New Home Sales report which shows rising sales volume and a shrinking new home inventory nationwide.
The basics of supply-and-demand portend higher new home prices later this year — a potentially bad development for buyers of new homes in Wisconsin and nationwide. With demand for new homes rising, builders may be less likely to make sale price concessions or to offer “upgrade packages” to buyers of new homes.
If you’re shopping for new construction in or around Williams Bay , therefore, consider moving up your time frame. Home affordability is high today. It may not be tomorrow.
8-Fold Increase In “Improving Markets” Since September
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The economic recovery continues nationwide, but the recovery’s an uneven one.
Some metropolitan areas are faring very well this year, posting measurable gains in both employment and housing. Other metropolitan areas, by contrast, are struggling.
To help identify those markets in which growth is occurring, the National Association of Homebuilders created the Improving Market Index, a metric analyzing three separate, independently-collected data series “indicative of improving economic health”.
The IMI’s three collected data series are :
- Employment Growth (as published by the Bureau of Labor Statistics)
- Home Price Growth (as published by Freddie Mac)
- Single-Family Housing Growth (as published by the Census Bureau)
A metropolitan area is considered to be “improving” if all three indicators show growth at least six months after the respective area’s most recent trough, or “bottoming out”.
In May, there are exactly 100 U.S. markets that qualify for the NAHB’s Improving Market Index, down from 101 last month but higher by more than 800% from the reading in September 2011, the index’s inaugural release.
17 areas were added to the Improving Market Index list this month including Phoenix, Arizona; Ann Arbor, Michigan; and Bend, Oregon. 18 areas were removed from the May IMI.
83 metropolitan areas remained from April.
There is little actionable information in the Improving Markets Index but the report does a good job of highlighting how “real estate markets” can’t be summarized on a national level and remain relevant to everyday home buyers and sellers across Wisconsin and nationwide. For example, Fort Collins, Colorado is listed as an Improving Market. However, Greeley, Colorado — located just 30 miles away — was just downgraded from the same list.
Home values and economies vary by region, by state, by city, by neighborhood, and even by street.
The complete Improving Markets Index can be viewed at the NAHB website but for the best read of what’s happening in your neighborhood, talk to a local real estate agent.
Home Affordability Reaches An All-Time High
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Home affordability moved higher last quarter, boosted by the lowest mortgage rates in history, a rise in median income, and slow-to-recover home prices throughout Wisconsin and the country.
According to the National Association of Home Builders, the quarterly Home Opportunity Index read 75.9 in 2011′s fourth quarter. More than 3 in 4 homes sold between October-December 2011, in other words, were affordable to households earning the national median income of $64,200.
Never in recorded history have U.S. homes been as affordable on a national level. Even on a regional and local level, affordability soared.
Affordability was highest in the Midwest; 7 of the 10 most affordable markets nationwide were in the nation’s heartland.
The Top 5 most affordable U.S. cities in Q4 2011 were:
- Kokomo, IN (99.2% home affordability)
- Fairbanks, AK (97.5% home affordability)
- Cumberland, WV (96.9% home affordability)
- Lima, OH (96.0% home affordability)
- Rockford, IL (95.5% home affordability)
These are each considered “small markets”. The most affordable “major market” was the Youngstown, Ohio area, where 95.1% of homes sold were affordable to households earning the area’s local median income.
Not surprisingly, America’s “least affordable cities” were regionally-concentrated, too, with 7 of the 10 least affordable markets located in either California or Texas.
San Francisco (#3), Santa Ana (#4), and Los Angeles (#5) led for the Golden State but, for the 15th consecutive quarter, the New York metropolitan area took “Least Affordable Market” honors.
Just 29 percent of homes in and around New York City were affordable to households earning the area’s median income last quarter. It’s a large jump from the quarter prior during which 23 percent of homes were affordable.
The rankings for all 225 metro areas are available for download on the NAHB website.
Homebuilder Confidence Returns To Pre-Recession Levels
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New construction buyers in Williams Bay , look out. The nation’s home builders are predicting a strong 2012 for new home sales. It may mean higher home prices as the spring buying season approaches.
For the sixth straight month, the National Association of Homebuilders reports that homebuilder confidence is on the rise. The Housing Market Index climbed four points to 29 in February, the index’s highest reading since May 2007.
The Housing Market Index is now up 8 points in 8 weeks. The last time that happened was June 2003, a month during which the U.S. economy was regaining its footing, much like this month. It’s noteworthy that June 2003 marked the start of a 4-year bull run in the stock market that took equities up 54%.
The NAHB’s Housing Market Index itself is actually a composite reading. It’s the end-result of three separate surveys sent to home builders monthly.
The association’s questions are basic :
- 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 February, builders reported marked improvement across all three areas. Builders report that current home sales climbed 5 points; that sales expectations for the next 6 months climbed 5 points; and that buyer foot traffic climbed 1 point.
Most notable of all of the statistics, though, is that the nation’s home builders report that there are now twice as many buyers setting foot inside model units as compared to just 6 months ago.
This data is supported by the monthly New Home Sales report which shows rising sales and a shrinking new home inventory.
Because of this, today’s new home buyers throughout Wisconsin should expect fewer concessions from builders at the time of contract including fewer price breaks on a home and fewer free upgrades. Builders are optimistic for the future and, therefore, may be less willing to “make a deal”.
This spring may mark the best time of year to buy a new home. 60 days forward, it may be too late.
Homebuilders Getting Optimistic; Higher Home Prices Ahead?
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Homebuilder confidence continues to rise.
Just two months after falling to a multi-month low, the Housing Market Index surged again in November, climbing another three points to 21. It’s the second straight month that the HMI posted a 3-point gain, catapulting the index to an 18-month.
The Housing Market Index is monthly report from the National Association of Homebuilders. It’s meant to measure confidence among the nation’s homebuilders, scored on a scale of 1-100.
When homebuilder confidence reads 50 or better, it reflects favorable conditions for homebuilders. Readings below 50 reflect unfavorable conditions.
The Housing Market Index has not read north of 50 since April 2006.
As an index, the HMI is actually a composite reading; the result of three separate surveys sent to homebuilders each month. The National Association of Homebuilders asks it members about current single-family home sales volume; projected single-family home sales volume over the next 6 months; and current “foot traffic”.
In November, builder responses were stronger in all 3 categories :
- Current Single-Family Sales : 20 (+3 from October)
- Projected Single-Family Sales : 25 (+1 from October)
- Buyer Foot Traffic : 15 (+1 from October)
And, beyond the headline data, there is an important, noteworthy item in this month’s Housing Market Index.
In November, “Current Single Family Sales” climbed 3 points for the second straight month, and is now at the highest point since May 2010 — the month after last year’s home buyer tax credit expired. And, this increase in sales volume is occurring as new home construction is falling, thereby reducing home inventory nationwide.
That’s an important point for Lake Geneva real estate home buyers.
With more new home sales and fewer new home listings, prices are likely to increase into 2012. Especially with home builders predicting higher sales levels over the next 6 months, and seeing higher levels of buyer foot traffic through their properties today.
For now, though, home prices are stable and mortgage rates are low. This creates low-cost homeownership throughout Wisconsin , and helps new home construction remain affordable.
If you’re in the market for new home construction, the next 60 days may prove to be your best time to get “a deal”.