Archive for 'New Home Sales'
New Home Sales Crater In January, Opening The Door For Deals With Builders
February 25th, 2011. Published under New Home Sales. No Comments.
Not all housing reports are sunny, it seems.
In its monthly New Home Sales release, the U.S. Department of Commerce showed a 13 percent drop-off in annualized new construction sales between the months of December and January.
It’s the biggest one-month drop in New Home Sales since May 2010.
In addition, the supply of new homes for sale spiked higher to 7.9 months last month. ”Home supply” is defined as the amount of time it would take to sell the complete “for sale” inventory at the current pace of sales.
In December, the supply measured just 7.0 months,
Don’t fret the news, however. For buyers of new construction , falling New Home Sales figures can be terrific. Weaker markets put pressure on the nation’s home builders to sell their respective homes more quickly. To reach that goal, builders often discount prices and/or offer free upgrades to buyers.
Some of that action may already be in effect.
Despite falling volume, the New Home Sales report showed that new homes are selling faster than in recent months. The median time required to sell a newly-built home dropped to 7.8 months in January – a figure well below January 2010′s reading of 13.9 months.
It suggests that builders are getting better at locating buyers, and moving property.
Therefore, if you’re shopping for a new construction and see one worth buying, get to it. Not only will the home likely sell soon if it’s priced right, but an increase in mortgage rates will make the home more expensive to finance.
Every 0.250% increase to rates adds $15 monthly per $100,000 borrowed.
New Home Sales Reach 8-Month High
January 28th, 2011. Published under New Home Sales. No Comments.
Sales of new homes rose sharply in December, posting a 17.5 percent gain from the month prior.
According to the Department of Housing and Urban Development, New Home Sales climbed to 329,000 in December, besting November by close to 50,000 units on a seasonally-adjusted annual basis.
Last month’s reading is an 8-month high for New Home Sales, and the latest in a series of signals that housing is improving around the country.
Note that December’s Existing Homes Sales and Building Permits reports also showed marked gains last month, climbing 12 percent and 6 percent, respectively.
Furthermore, an interesting pattern is emerging in the price points of home sales. The highest levels of relative growth are occurring within the “move-up buyer” segments. Entry-level price points are lagging the market, as a whole.
December’s New Home Sales data breaks down by price point as follows:
- Homes under $200,000 : 36% of the market (-9% from November)
- Homes between $200,000-$299,999 : 32% of the market (+7% from November)
- Homes between $300,000-$499,999 : 27% of the market (+7% from November)
Luxury homes accounted for less than 5% of the newly-built home market, suggesting that homeowners are either not “buying new” as frequently, or are choosing to renovate their existing properties instead.
The 2010 housing market finished on a tear, and that momentum is carrying forward into 2011. Expect the spring season to show strongly, putting pressure on home prices to rise.
Coupled with rising mortgage rates, the long-term cost of homeownership is unlikely to be as low as it is today.
New Home Sales Rise In November; Hint At Strong Winter 2011
December 28th, 2010. Published under New Home Sales. No Comments.
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 , 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.
New Home Sales Drop In July — Just Like Existing Home Sales
August 26th, 2010. Published under New Home Sales. No Comments.
One day after the National Association of Realtors released the softest Existing Home Sales report since 1995, the U.S. Census Bureau released a similarly-weak New Home Sales report.
Americans bought just 276,000 newly-built homes in July. That marks the fewest units sold since the government started keeping records in 1963.
In addition, although new home inventory actually dropped 2,000 units in July, the slowing sales pace still managed to push the national supply higher by 1.1 months. At July’s rate of sales, the nation’s new home inventory would be exhausted in just about 9 months.
None of this news should surprise you, though. It’s all been foreshadowed for weeks.
First, Single-Family Housing Starts have dropped in every month since April. A “housing start” is a when a home starts construction and, because fewer homes are under construction, we should expect fewer homes to be sold.
Second, Building Permits are down. The number of new permits peaked in March and have fallen 23 percent since.
And, lastly, home builder confidence ranks at its lowest levels since early-2009. A contributing factor in that pessimism is dwindling buyer foot traffic.
Regardless, there’s two sides to the story. Although the New Home Sales data looks bad for builders, it can be terrific for you. This is because new homes are more likely to be discounted when the sales cycle favors buyers.
Coupled with ultra-low mortgage rates, the cost of buying a newly-built home may have just become cheaper.
New Homes Sales Gain in June, But Gains Are Relative
July 27th, 2010. Published under New Home Sales. No Comments.
After a down month in May, the sales of newly-built homes appears back on track.
As published by the Census Bureau, June’s New Home Sales report showed:
- A 24 percent sales volume increase from the month prior
- A 2-month drop in the supply of newly-built home
There are now just 210,000 new homes for sale nationwide.
June’s data is a major improvement over May, but it’s possible that the true “new home market” may be softer than the statistics suggest. This is for several reasons.
First, we’re comparing June’s sales data to the worst month in New Home Sales history.
In May, sales of new homes totaled just 267,000 units nationwide. That’s one-quarter fewer sales than in the previous worst month in New Home Sales history. May’s sales levels were awful by any measure but June’s improvement to 330,000 units remains second-worst sales levels ever posted.
Second, although much improved, June’s new home supply of 7.6 months is elevated versus the historical norm near 6.0 months. The last year has averaged 7.7 months.
For buyers of new homes , this combination of low sales volume and higher-than-normal inventory may be a positive. It’s the main reason why homebuilder confidence is reeling and the downturn has opened some doors for big discounts and deals. Free upgrades and closing cost credits can make a well-priced home even more attractive.
Plus, with mortgage rates at all-time lows and expected to rise, home affordability is may never be better.
Buyers Take The May 2010 New Home Sales Data All The Way To The Bank
June 25th, 2010. Published under New Home Sales. No Comments.
One month after the federal homebuyer tax credit’s official expiration, the New Home Sales report turned in its worst showing ever.
In May 2010, for the first time in 11 months, the inventory of unsold new homes crossed the 8-month marker, posting an 8.5 month supply overall.
Additionally, new homes sales volume fell to 300,000 units nationwide — a drop of 32% and its lowest level since the Commerce Department started tracking data in 1963.
Now, universally, the press is referring to the May New Home Sales report as “poor“. A closer look, however, shows that may not be the case.
For one, we have to keep New Home Sales in perspective as a percentage of overall home sales. Yes, there were just 300,000 new homes sold in May, but there were also 5.66 million “existing” homes sold.
New Home Sales, therefore, accounted for just 5 percent of the total housing market — a very small percentage.
Another reason why the weak New Home Sales data isn’t so awful is that, when New Home Sales stall, it actually benefits home buyers. Excess supply puts a strain on sellers which, in turn, gives buyers a tremendous amount of leverage in negotiation.
When home inventories are high, builders are more apt to appease their customers in hopes of making a sale. For home buyers, this can result in buying a better product at a lower price.
Especially with builder confidence plummeting.
Since February 2009, housing has shown steady gains. There’s been both peaks and valleys across units, inventories, and prices, but overall, the market is improving. May’s New Home Sales data shows how now may an opportune time to “buy new”.
