Having a car isn’t really a choice for a lot of Americans – and even some of us that are lucky enough to choose whether or not to have a car decide to have one. Put simply, cars are a fact of life for most us. So it comes as no surprise that an analysis of Census Bureau construction data done by the National Association of Home Builders found that an increasing number of new homes have garages and the size of those garages is also on the rise. For example, the share of homes with a three or more car garage jumped from 11 percent in 1992 to 20 percent in 2005. And, in the past decade, new homes built without a garage have become almost non-existent. Robert Dietz, NAHB’s chief economist and senior vice president for economics and housing policy, breaks down the numbers in a recent article. “For new single-family completions in 2015, 61 percent of homes offered a two-car garage,” Dietz writes. “Another 24 percent of homes possessed a garage large enough to hold three or more cars. Just 6 percent of newly-built homes had a one-car garage, and only 1 percent possessed a carport. Another 9 percent of new homes had no garage or carport.” Additionally, of the 9 percent of homes without a garage, 23 percent were townhomes. More here.
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.
One way to determine the health of any particular housing market is to gauge how many new homes are being built in the area. That’s because new homes add inventory to the market, which plays an important role in moderating price increases and giving buyers more options when looking for a house to buy. For this reason, the National Association of Home Builders surveys builders each month to get a feel for how the new home market is doing. The survey scores builders’ responses on a scale where any number above 50 indicates more builders view conditions as good than poor. In August, the survey found builder confidence up two points from the month before, reaching a score of 60. In particular, the index components measuring current sales conditions and future expectations both increased. Robert Dietz, NAHB’s chief economist, says the overall housing market should continue on an upward path through the end of the year. “Builder confidence remains solid in the aftermath of weak GDP reports that were offset by positive job growth in July,” Dietz said. “Historically low mortgage rates, increased household formations and a firming labor market will help keep housing on an upward path during the rest of the year.” 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.
Because builders have an unique view of the new home market, the National Association of Home Builders tracks their perspective each month as part of their Housing Market Index. The survey has been conducted for 30 years and scores builders’ responses on a scale where any number above 50 indicates more builders view conditions as good than poor. In July, builder confidence was relatively unchanged from the month before, falling one point to 59. Robert Dietz, NAHB’s chief economist, says the market remains poised for growth. “The economic fundamentals are in place for continued slow, steady growth in the housing market,” Dietz said. “Job creation is solid, mortgage rates are at historic lows and household formations are rising. These factors should help to bring more buyers into the market as the year progresses.” Among the survey’s three components, measuring buyer traffic, current sales, and expectations for the next six months, future expectations fell furthest, dropping three points to 66. Regionally, the Midwest, South, and West all continued to post positive numbers, while the Northeast trails behind with a three-month moving average of 39. Builder confidence is considered an important measure of housing’s health due to the important role new homes play in balancing the market. More here.
The new home market is particularly important to the health of the overall housing market. That’s because any improvement in the number of new homes being built helps inventory levels, which also helps moderate prices and balance supply and demand. Currently, buyer demand is high and the number of homes available for sale is low. So now is a good time to keep an eye on what’s happening in the market for newly built homes. One good indicator of where the market stands is the National Association of Home Builders Housing Market Index. The survey asks builders for their perspective on current sales levels, buyer traffic, and the outlook for the next six months. The results are scored so that any number above 50 indicates more builders view conditions as good than poor. In June, the index rose two points to 60 – the highest reading since January. Robert Dietz, NAHB’s chief economist, says there are a number of indications that the housing market will improve during the second half of this year. “Rising home sales, an improving economy, and the fact that the HMI gauge measuring future sales expectations is running at an eight-month high are all positive factors indicating that the housing market should continue to move forward in the second half of 2016,” Dietz said. More here.
When thinking of buying a home, few buyers consider the number of buildable lots in their area. However, builders say a shortage of available lots is keeping them from putting up more new homes. And at a time when the number of homes available for sale is already low, that isn’t good for buyers. That’s because, more new homes on the market would help slow down price increases, improve affordability, and provide buyers with more choices. According to a recent survey conducted by the National Association of Home Builders, 64 percent of builders say the supply of lots in their market is “low” or “very low.” That’s the highest it’s been since the NAHB began tracking lot availability in 1997. Robert Dietz, NAHB’s chief economist, says the problem is growing. “We have monitored lot availability for the last two decades, and it is clear that the scarcity of building lots is growing,” Dietz said. “Whether due to land use policy, geographic constraints or other regulatory constraints, the lack of lots for residential construction will have negative impacts on housing affordability in many markets.” Regionally, the West had the highest number of builders reporting a low number of lots, at nearly 40 percent. In the South, 23 percent of builders said lot supply was low, compared to 18 percent in both the Midwest and Northeast. More here.
Builders are in an unique position to gauge home buyer traffic and demand for newly-built single-family homes. Because of this, their views are considered an important measure of the market’s health and future outlook. Each month, the National Association of Home Builders surveys builders and scores their responses on a scale where any number above 50 indicates more builders view conditions as good than poor. In May, the index was unchanged from the month before – remaining at 58 for the fourth-consecutive month. Robert Dietz, NAHB’s chief economist, says a closer look at the numbers shows there is a lot of optimism about the market going forward. “The fact that future sales expectations rose slightly this month shows that builders are confident that the market will continue to strengthen,” Dietz said. “Job creation, low mortgage interest rates and pent-up demand will also spur growth in the single-family housing sector moving forward.” In fact, builders are so optimistic that the index component measuring sales expectations for the next six months jumped three points to 65, while gauges of buyer traffic and current sales stayed flat. Regionally speaking, three-month moving averages show the Midwest and South up a point, the West unchanged, and the Northeast down slightly. More here.
The market for new homes among buyers over the age of 55 has been in positive territory for eight consecutive quarters, according to the National Association of Home Builders’ 55+ Housing Market Index. The index measures builder confidence in the market for newly built single-family homes on a scale where any number above 50 indicates more builders view conditions as good than poor. Survey results for the first quarter of this year scored a 56, down five points from the previous quarter. Jim Chapman, chairman of the NAHB’s 55+ Housing Industry Council, says sentiment overall was positive. “Although builder sentiment in the 55+ housing sector is down slightly from its peak, overall confidence is still in positive territory,” Chapman said. “Builders for the 55+ market are doing quite well in some areas across the country, while others are experiencing challenges that are hindering production.” Despite those challenges, the number of builders expecting sales to be strong over the next six months was higher than ever. In fact, the index component measuring expected sales rose eight points to 71, which is the highest reading since the index began in 2008. On the other hand, gauges of current sales and buyer traffic were down from the previous quarter. More here.