New Residential Construction Archives

Builder Survey Hits Highest Level In 11 Years

There are a number of perspectives from which you could view the housing market. That’s why there are surveys gauging the attitudes of buyers and sellers, as well as Realtors, mortgage lenders, and builders. Each has an unique take on the real estate market that is based on their specific role. For example, an agent may have a very different understanding of their local market than the average home buyer, if only because of their experience and expertise. Builders are considered an important measure of the market because they have a ground-level view of how many people are shopping for new homes, the challenges facing builders, and the amount of foot traffic they’re currently seeing. For this reason, the National Association of Home Builders’ Housing Market Index surveys builders each month and scores their responses on a scale where any number above 50 indicates more builders view conditions as good than poor. In December, the index hit 70, its highest reading since July 2005. Robert Dietz, NAHB’s chief economist, says this month’s increase may have more to do with the recent election than any fundamental change in conditions. Still, Dietz says the market looks good. “Though this significant increase in builder confidence could be considered an outlier, the fact remains that the economic fundamentals continue to look good for housing,” Dietz said. “The rise in the HMI is consistent with recent gains for the stock market and consumer confidence. At the same time, builders remain sensitive to rising mortgage rates and continue to deal with shortages of lots and labor.” More here.

New Home Construction Jumps In June

As a home buyer or seller, new residential construction numbers may not seem like they have a whole lot to do with you. But, at a time when there are more buyers than there are homes available for sale, the pace of new home construction has a significant impact on home prices – which are most likely very important to you. In today’s market, for example, home prices are increasing in many areas due to the fact that there is more demand than there is supply. When there are fewer homes for sale, home prices rise as competition among buyers increases. As new homes are built, however, those price increases will begin to moderate and buyers will have more options to choose from. For that reason, the U.S. Census Bureau and the Department of Housing and Urban Development’s New Residential Construction report is widely cited as a good barometer of the housing market’s health. According to the most recent report, new home construction rose more than economists’ expected in June. In fact, the number of single-family homes that began construction during the month was 4.4 percent higher than the month before. The improvement was largely due to a 46.3 percent spike in the Northeast and a 17.4 percent pickup in the West. Also in the report, building permits – which are a good indication of future housing starts – rose 1 percent from May. More here.

New Residential Construction Flat In May

Housing starts refer to the number of homes that broke ground during the month. The U.S. Census Bureau and the Department of Housing and Urban Development track starts – along with building permits and housing completions – as part of their monthly New Residential Construction report. According to the most recent release, privately-owned housing starts were virtually unchanged in May from one month earlier. However, regional results show the number of single-family homes that broke ground in the South, West, and Northeast actually increased over the month before. In fact, home construction spiked 12.7 percent in the Northeast alone. But overall results suffered, despite solid gains elsewhere, due to a nearly 15 percent drop in the Midwest. Still, analysts point to the fact that authorized building permits increased and home builders are feeling more confident as evidence that, despite not gaining ground in May, residential construction is still poised for continued gains. And a closer look at the numbers reveals that both housing starts and building permits are, in fact, about 10 percent higher than they were last year. New residential construction is an important indicator for the housing market because, as more new homes are built, the total number of homes available for sale increases which helps moderate prices, balance the market, and provide more choices for buyers. More here.

New Home Construction Remains Strong

New home construction is an important indicator of the health of the housing market. In fact, taking note of how many new houses are being built in your area is one way of determining whether or not your local market is strong. For that reason, each month’s New Residential Construction report – released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development – is watched closely by both economists and real estate analysts. According to the most recent release, the number of new single-family homes that began construction during the month of August fell 3 percent from the month before. But, despite the drop, housing starts remain above a one million-unit pace for the fifth consecutive month. In addition, the number of permits authorized to build new single-family homes, which is a good indicator of future housing starts, rose 2.8 percent from the month before. And, because they’re an indication of future home construction, a rise in building permits points to a coming rebound in construction and continued strength in the new home market through the end of the year. More here.