In January, sales of newly built single-family homes increased 3.7 percent over the previous month and are now 5.5 percent higher than last year at the same time, according to new numbers released by the U.S. Census Bureau and the Department of Housing and Urban Development. But though the improvement was solid, it didn’t meet economists’ expectations. Surveyed economists were predicting a 6.3 percent sales increase. Weather could be among the possible reasons sales didn’t perform as well as expected. For example, a look at regional results shows sales up by double digits in the Northeast and Midwest. The South also saw gains, rising 4.3 percent from the month before. In the West, however, sales fell – which may be due to the fact that the west coast has had an unusually rainy winter. Overall, though, the news was positive, with sales signaling a boost in consumer confidence and a healthy level of demand among prospective buyers. It also shows that interested buyers have not been deterred by the rise in mortgage rates. The median sales price of new homes sold in January was $312,900. The average sales price was $360,900. More here.
If you follow real estate, you’ve heard a lot about inventory lately. That’s because, inventory – which refers to the number of homes available for sale – plays a big role in how much house the typical buyer can afford. When there are more homes for sale than there are interested buyers, home prices fall. These days, there are a lower-than-usual number of homes available to buy in many markets, which is why prices have continued to rise across the country. Of course, one good way to boost inventory is to build new homes. New home construction produces more choices for buyers and more competition among sellers, which helps balance the market. For this reason, the National Association of Home Builders regularly surveys builders to get a feel for whether they are optimistic about the market and likely to build more homes. The NAHB’s Housing Market Index scores builders answers on a scale where any number above 50 indicates more builders feel conditions are good than poor. In February, the index fell two points but remains in positive territory at 65. Granger MacDonald, NAHB’s chairman, says builders are generally optimistic. “While builders remain optimistic, we are seeing the numbers settling back into a normal range,” MacDonald said. Regionally, the Northeast and South were down, while the Midwest rose one point and the West was unchanged at 79. More here.