If you want to know what’s happening with home prices, it’s really just a matter of supply and demand. When there are a lot of houses available for sale and not many buyers, prices fall. When there are a lot of buyers but not a lot of homes to buy, home prices rise. That’s been the case lately. The number of homes for sale has been low for a while now and, since
buyer demand is high, prices and competition have been increasing steadily in a lot of markets. With fewer opportunities for buyers and prices rising, there’s been a lot of attention focused on builders. But why? Well it’s because, as builders build new homes and put them up for sale, home prices moderate and affordability conditions improve, helping to balance the market. So naturally, the hope is that new home construction picks up. One measure of how the new home market is doing is the National Association of Home Builders’ Housing Market Index. The index scores builders’ confidence in the new home market on a scale where any number above 50 indicates more builders view conditions as good than poor. In October, the index fell to 63, but remains at its second highest level this year. Ed Brady, NAHB’s chairman, says the results indicate new home construction should continue to make gains. “Even with this month’s drop, builder confidence stands at its second-highest level in 2016, a sign that the housing recovery continues to make solid progress,” Brady said. More here.
You may not have given any thought to whether or not home builders are feeling optimistic about the market but it has something to do with you. Whether you’re a prospective home buyer or an owner looking to sell their house, the new home market plays a role. That’s because, when builders are feeling confident that there are serious buyers out there, they build more homes and that leads to home prices leveling off. In other words, when there are more homes for sale, price increases slow. So how are home builders feeling currently? Well, according to the National Association of Home Builders’ Housing Market Index – which scores builder confidence on a scale where any number above 50 indicates more builders feel good than poor – they are feeling better than they have in almost a year. In fact, September’s index reached 65, the highest since last October. Ed Brady, NAHB’s chairman says the results are a positive sign for the entire housing market. “As household incomes rise, builders in many markets across the nation are reporting they are seeing more serious buyers, a positive sign that the housing market continues to move
forward,” Brady said. “The single-family market continues to make gradual gains and we expect this upward momentum will build throughout the remainder of the year and into 2017.” More here.
Over the past few years, a lower-than-usual number of young Americans have been buying homes. Historically, first-time home buyers made up around 40 percent of all home sales. In recent years, however, the number has been hovering just above 30 percent. Still, survey after survey shows that – despite not being as active in the market – young Americans still want to become homeowners. In fact, according to a recent survey from the National Association of Home Builders, 81 percent of respondents between the ages of 18 and 29 said they want to buy a home. That, combined with the fact that nearly 40 percent of total participants said they would like to buy a home in the next three years, is encouraging news for the residential real-estate market. Ed Brady, NAHB’s chairman, says homeownership is still an important part of the American Dream. “The survey shows that most Americans believe that owning a home remains an integral part of the American Dream and that policymakers need to take active steps to encourage and protect homeownership,” Brady said. Americans agree. The survey also found 72 percent in favor of the government providing tax incentives to encourage homeownership. More here.
New homes play an important role in bolstering the economy and balancing the housing market. When new homes are being built, it is a sign that the economy is doing well, jobs are being created, and Americans are on the move. Because of this, the National Association of Home Builders’ Housing Market Index is an important resource for gauging the market’s health and future outlook. Each month, the index tracks builder confidence in the market for new homes on a scale where any number above 50 indicates more builders view conditions as good than poor. In April, builder confidence held at 58 for the third consecutive month. Ed Brady, NAHB’s chairman, says it’s a sign that the market is slowly improving. “Builder confidence has held firm at 58 for three consecutive months, showing that the single-family housing sector continues to recover at a slow but consistent pace,” Brady said. “As we enter the spring home buying season, we should see the market move forward.” In support of Brady’s point, the index did find that builders are optimistic about sales over the next six months. In fact, the component measuring future expectations rose one point to 62. More here.
In recent years, energy efficiency has repeatedly ranked among the top features potential home buyers say are important to them. And according to a recent survey from the National Association of Home Builders, that hasn’t changed. In fact, four of the top 10 features builders said they were most likely to include in new homes they build this year were focused on energy efficiency. “Today’s new homes include features that will help homeowners reduce energy consumption and enhance the conveniences of modern living,” Ed Brady, chairman of the National Association of Home Builders, said. “Our builders are telling us that energy efficiency continues to be a top demand from consumers.” Among the energy-efficient features most likely to be found in new homes built this year, low-E windows, Energy Star-rated appliances and windows, and programmable thermostats were all in the top 10. These features are so popular, buyers say they’d be willing to pay more in order to have them. In fact, buyers said they’d pay nearly $11,000 more for a house that could save them $1,000 a year on utilities. More here.