Archive for New Home Sales
The number of newly-built homes sold slipped 8 percent in June from the month prior, says the U.S. Census Bureau in its latest New Home Sales report. The June data shows 350,000 homes sold nationwide on a seasonally-adjusted, annualized basis.
The home sale tally fell short of Wall Street expectations but the Census Bureau revised higher its previously-released results for March, April and May by a collective 33,000 units. This left the June New Home Sales report as the weakest of the last five months, yet still stronger than the 21 months preceding February.
In other words, despite retreating from May, the June New Home Sales data was still quite strong. As compared to June of last year, sales of newly-built homes are higher by 15% and the national inventory of new homes for sale is down to 144,000 units.
This marks a 13 percent inventory reduction in just twelve months.
At the current sales pace nationwide, the complete stock of new homes would “sell out” in 4.9 months, a noteworthy data point because analysts believe that a 6.0-month supply of homes marks a market in balance. Home supplies of below 6.0 months suggest a “seller’s market” where sellers have pricing power and excess leverage in negotiations.
Since October 2011, the average new home sale price is higher by 6% nationwide, a trend that should continue in Williams Bay through the end of 2012 and into 2013 — especially with mortgage rates at new all-time lows and home affordability at all-time highs. As more buyers enter the market amid limited supply, prices are expected to rise.
If you’re a home buyer in search of new construction, therefore, the best new home “deals” you may find may be the ones you find today.
Mortgage markets improved only slightly last week despite a large 2-day rally that lasted through Wednesday and Thursday.
Unfortunately for mortgage rate shoppers in Delavan , markets were worse throughout the other 3 days of the week, which kept mortgage rates from dropping to new all-time lows.
As with many weeks since the start of the year, political and economic action within the Eurozone dictated the direction of domestic mortgage rates. Last week’s 2-day EU Summit was the major driver of markets.
In the days leading up to the summit, mortgage rates worsened as optimism in summit’s outcome grew. This is because a stable Europe is good for the world’s economy which, in turn, encourages Wall Street investors to move money from “safe investments” such as U.S. mortgage bonds into more risky ones such as equities.
This creates an excess supply of mortgage bonds which causes mortgage rates to move higher.
Then, on the day prior to the summit, the optimism faded. Several Eurozone leaders expressed an unwillingness to compromise, rhetoric which drove investors back into “safe” asset classes, explaining the mid-week drop in mortgage rates.
However, Friday, in a surprise move, EU officials announced a plan to recapitalize Europe’s banks and to reduce borrowing costs for Spain and Italy, once again, pushing investors back into a risk-taking mood.
The news in Europe overshadowed strong housing reports here in the United States.
New Home Sales and the Pending Home Sales Index both gave strong results and inflationary pressures were shown to be in check. The housing market continues its slow, steady recovery.
This week, mortgage rates are expected to remain volatile. The markets have had the weekend to pick through the EU agreement and, later this week, the Bureau of Labor Statistics will release the June 2012 Non-Farm Payrolls report. In addition, this is a holiday week so trading volume is expected to be lighter-than-usual.
Mortgage markets will be closed Wednesday.
The new construction market continues to improve.
As reported by the Census Bureau, 369,000 new homes were sold last month on a seasonally-adjusted, annualized basis. A “new home” is a home that is considered new construction.
May’s data marks the highest number of new homes sold since April 2010, the last month of that year’s federal home buyer tax credit.
It’s also a 14% increase over the rolling 12-month average.
The news was somewhat expected based on the most recent Homebuilder Confidence survey, which rose to a 5-year high. Home builders have been reporting higher sales volume and rising buyer foot traffic since October of last year.
The May New Home Sales report confirms what builders already told us.
Furthermore, new homes are selling more quickly than builders have built them, lowering the national “home supply” to levels not seen since October 2005. There are currently 145,000 new homes for sale.
A supply of 6.0 months is believed to represent a market in balance. Anything less connotes a “sellers’ market”. At the current pace of sales, the entire new home housing stock would be exhausted in 4.7 months.
The South Region continues to account for the majority of new construction sales, posting a 55% market share in May. South Region sales were up 13 percent as compared to April. The other 3 regions turned in mixed results :
- Northeast Region : +36.7% from April 2012
- Midwest Region : -10.6% from April 2012
- West Region : -3.5% from April 2012
For all its strength, though, the Census Bureau’s New Home Sales data may also be “off”.
Although New Home Sales were said to rise by roughly 8 percent nationally from April to May, the government’s monthly report was also footnoted with a ±12.2% margin of error. This means that the actual New Home Sales reading may have been as high as +20% last month, or as low as -4%. The values could be positive or negative — we can’t know for certain.
However, that’s not to say that the New Home Sales should be ignored.
Longer-term, new home trends have been positive and builder confidence survey suggests the same. If you’re in the market for new construction in Lake Geneva , you may want to go into contract soon. Home prices and mortgage rates remain low — a terrific combination for today’s home buyers.
The April New Home Sales report suggests that the market for newly-built homes is as strong as the market for existing ones.
According to the U.S. Census Bureau, the number of new homes sold rose 3.3 percent in April to a seasonally-adjusted, annualized 343,000 units sold — its second-highest reading since April 2010.
April 2010 marked the last month of that year’s federal home buyer tax credit program.
April’s New Home Sales data also marks the 7th of eight consecutive months during which the number of new homes sold climbed nationwide, a streak unequaled in recent history. During this period, the supply of new homes for sale has dropped 13%.
The complete new home inventory is down to 146,000 homes nationwide.
At the current pace of sales, home buyers in Williams Bay and across the county would exhaust the complete supply of newly-built homes in 5.1 months.
This, too, is a significant figure.
When home supplies fall below 6 months of inventory, it’s widely believed to indicate a “seller’s market” and there hasn’t been more than 6 months of a new home supply since October 2011. This has placed upward pressure on new home prices and helps to explain why the average home sale price is up 9% from just 6 months ago.
Homes are selling, and they’re rising in price — a trend that today’s buyers should expect to continue through the summer and fall months.
Record-low mortgage rates have moved home affordability to an all-time high with home builders now reporting the highest levels of buyer foot traffic at any time since 2007. As builder confidence grows, buyers can expect to find fewer “great deals” — especially as demand for homes outpaces supply.
If you’re a home buyer in search of new construction, therefore, the best new construction “deals” of 2012 may be the ones you find today. By 2013, the deals may be gone.
According to the Census Bureau’s monthly New Home Sales report, 313,000 new homes were sold in February 2012 on a seasonally-adjusted, annualized basis, representing a 1.6% drop from the month prior.
A “new home” is a home for which there has been no prior owner nor tenant.
At first glance, the data looks negative for the housing market; a suggestion that the well-publicized housing market recovery may be slowed. However, within February’s New Home Sales report are three important counter-statistics worth mentioning.
First, although annualized home sales volume slipped 5,000 units in February, this occurred as the number of homes for sale nationwide remained constant at 150,000. This is the fewest number of new homes for sale since at least 1993 — the first year that the Census Bureau tracked such data.
A small home supply promotes rising home values when buyer demand is rising and, in February, buyer demand held firm.
A second reason to remain optimistic on housing is that New Home Supply was 5.8 months in February. This means that, at the current pace of sales, the entire new home inventory will be “sold out” in 5.8 months.
Housing experts say that when home supplies fall below 6.0 months, it’s bullish for housing.
And, as a third reason to look past the New Home Sales headline figure, last month’s reporting Margin of Error was huge.
According to the government, the February New Home Sales data was published with a ±23.9% margin of error. T his means that the actual New Home Sales sales volume may have dropped as much as -25.5%, or may have climbed by as much as +22.3%.
Because the range of possible values includes both positive and negative numbers, the Census Bureau assigned its February data the “zero confidence” label.
It will be several months before February’s New Home Sales data is revised. Until then, buyers of Lake Geneva real estate would do well to take cues from the real estate market-at-large which shows steady, gradual improvement.
If your 2012 housing plans call for buying new construction, consider using February’s results as a window to “make a deal”. As the year progresses, great values in housing may be gone for good.
New Home Sales slowed into the New Year but the market for newly-built homes remains strong. For home buyers in Wisconsin 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 Lake Geneva 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.
If you plan to buy of new construction in Wisconsin 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.
Home builders continue to sell homes and work through inventory.
According to data from the Census Bureau, the number of new homes sold in September jumped 6 percent from the month prior, beating analyst expectations. On a seasonally-adjusted, annualized basis, buyers in Wisconsin and nationwide closed on 313,000 newly-built homes last month.
It’s the highest reading since April and a major reason why the available number of new homes for sale is shrinking.
As compared to September 2010, there are 19% fewer homes for sale nationwide. At today’s sales pace, the complete new home inventory would be “sold out” in 6.2 months – the quickest sell-out pace since the April 2010 federal home buyer tax credit expiration.
It’s no wonder builder confidence is rising.
After averaging 15 through the first 9 months of the year, homebuilder confidence jumped 4 points for October, carried by low mortgage rates and the expectation for a strong winter/spring selling season.
For buyers in Lake Geneva real estate , this could be construed as a housing market-shifting signal. As builder confidence rises, it becomes more difficult to negotiate for upgrades and price reductions on a new home. “Great deals” get scarce.
Furthermore, it’s unlikely that mortgage rates will sustain their current, ultra-low levels into 2012. Rising rates lead to higher housing payments on a month-to-month basis.
If you’re in the market for a newly-built home, in other words, today’s homes may represent your best value of the year.
In addition, the supply of new homes dropped to 6.5 months — a 2-month decrease from October 2010 and the best reading in a year.
The report runs counter to recent reports from the National Association of Homebuilders and the National Association of REALTORS® which suggest a looming housing slowdown. April’s New Home Sales report runs counter to that theory; it shows ongoing, steady, staggered improvement in terms of sales volume and sales inventory.
Broken-down by sales prices, the New Home Sales report also showed that homes are selling across all price tiers. The “luxury market” improved most:
- Up to $199,999: +1,000 homes from March
- $200,000 to $399,999: +2,000 homes from March
- $400,000 and over: +3,000 homes from March
These figures suggest that that move-up buyers — not first-timers — are driving the Lake Geneva real estate new home market. Homes under $200,000 now account for just 40% new home sales, down from 46% a year ago.
However, as with most months, it’s important that we recognize the New Home Sales data’s margin of error. Although New Home Sales showed a 7% improvement in April, the reported margin of error was ±17%. This means that the actual reading could have been as high as 24 percent, or as low as -10 percent.
It’s a huge range, and because it encompasses both positive and negative values, the Census Bureau assigned its April reading “zero confidence”. It’s right there in the footnotes.
For home buyers of Lake Geneva real estate, rising sales and falling supply may mean higher home prices. And, combined with the issuance of fewer building permits, supplies may be constrained into the summer months. This, too, would pressure home prices higher.
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 Lake Geneva real estate 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 Lake Geneva 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.