June Home Starts Surge – Highest Pace in 28 Years

18 07 2015

The U.S. Commerce Department announced that housing starts in June climbed 9.8 percent to a seasonally adjusted annual rate of 1.17 million homes. All of that growth came from a 28.6 percent surge in multi-family housing that put apartment construction at its highest rate since November 1987. Starts for single-family houses slipped 0.9 percent last month.

U.S. builders broke ground on apartment complexes in June at the fastest pace in nearly 28 years, as developers anticipate that recent job gains will launch a wave of renters.

The gains show that what had been a sluggish construction sector is now running on economic adrenaline. Strong job growth and a rebounding economy have increased the numbers of buyers and renters searching for homes, while gradually rising mortgage rates have spurred homeowners to finalize deals.

Housing starts jumped 35.3 percent in the Northeast because of apartments, while climbing 13.5 percent in the South. Home construction slumped in the Midwest and West in June.

Nationwide, housing starts have risen 10.9 percent year-to-date.

Over the past 12 months, employers have added 2.9 million jobs, meaning there are more people with paychecks to spend across the broader economy. The impact of those job gains and the unemployment rate drop to 5.3 percent has surfaced in housing, where demand is outpacing the supply of homes and creating more pressure to build houses and apartments.

The market for new homes for sale had just 4.5 months of supply in May, compared to 6 months in a healthy market.

Approved building permits increased 7.4 percent to an annual rate of 1.34 million in June, the highest level since July 2007. The bulk of that increase came for apartment complexes, while permits for houses last month rose just 0.9 percent.

There are other signs that builders are increasingly optimistic.

The National Association of Home Builders/Wells Fargo builder sentiment index released Thursday climbed to 60 this month, a level last reached in November 2005 – shortly before the housing boom gave way to the mortgage crisis that triggered the Great Recession. Readings above 50 indicate more builders view sales conditions as good rather than poor.

Mortgage rates have started to rise, although they remain low by historic standards.

Source: The Associated Press





U.S. New-Home Sales in May Climb to Best Levels Since 2008

24 06 2015

Purchases of new U.S. homes surged in the Northeast and West in May, as steady job growth over the past year has lifted the real estate sector.

The Commerce Department said that new-home sales rose 2.2 percent in May 2015 to a seasonally adjusted annual rate of 546,000, the strongest pace in more than seven years.

Sales of new homes have soared 24 percent year-to-date, helped by the additional incomes from the employers hiring 3.1 million workers in the past 12 months and relatively low mortgage rates. The sharp increase in purchases could help drive more employment in the construction sector and broader economic growth, potentially offsetting the setbacks to growth in the manufacturing sector caused by cheaper oil prices and a stronger dollar that has hurt exports.

Last month’s sales gains were concentrated in the Northeast, where sales jumped 87.5 percent. New-home sales increased 13.1 percent in the West, but slipped in the Midwest and South.

The median sales price has fallen slightly, dipping 1 percent over the past 12 months to $282,800.

The increases have caused the supply of new homes to dwindle to 4.5 months, compared to the six months’ supply generally associated with a healthy market.

Still, homebuilders are preparing to meet this demand, having broken ground on more houses this year and plan to continue construction. Approved building permits rose increased 11.8 percent to an annual rate of 1.28 million, the highest level since August 2007, the Commerce Department reported last week.

Existing homes are also seeing strong sales as the economy continues to muscle up.

Sales of existing homes climbed 5.1 percent in May to a seasonally adjusted annual rate of 5.35 million, the National Association of Realtors said Monday. Tight supplies have lifted prices, which have climbed 7.9 percent over the past 12 months to an average of $228,700, about $1,700 below the July 2006 peak.

Much of the increased buying activity flows from a stronger job market and relatively affordable mortgage rates.

Borrowing costs are low by historical standards, but they have been rising in recent weeks at a speed that might prompt more people to buy homes.

Average 30-year fixed rates were 4 percent last week, according to the mortgage giant Freddie Mac. That average has increased from a 52-week low of 3.59 percent.

Soure: Associated Press





U.S. existing home sales rise in December but down for 2014

24 01 2015

U.S. home resales rose slightly in December but fell overall for the year, the first annual drop since 2010 and another sign that the housing market recovery remains uneven amid expectations of a pick-up in 2015.

The National Association of Realtors said existing home sales increased 2.4 percent to an annual rate of 5.04 million units last month. That was slightly below economists’ expectations for a 5.06-million-unit pace.

“The still-tight mortgage credit conditions and more challenging first-time homebuyer affordability that were revealed by the failure of home sales to continue recovering last year remain serious concerns as we head into 2015,” said Ted Wieseman, an economist at JPMorgan in New York.

First-time buyers made up 29 percent of transactions in December as well as for the year as a whole, well below the level needed to boost growth in the housing market.

For all of 2014, existing home sales fell 3.1 percent, the first annual drop in four years. The housing market has struggled to maintain momentum since stagnating in the second half of 2013 following a run-up in mortgage rates.

At December’s sales pace it would take 4.4 months to clear all available houses from the market, down from 5.1 months in November and the lowest since January 2013.

However, a decline in mortgage rates, an easing of lending standards and the resurgent health of the U.S. economy over the last few months has spurred optimism that sales could strengthen this year.

And the outlook for the economy remains upbeat. In a separate report the Conference Board said its Leading Economic Index rose 0.5 percent last month after a 0.4 percent increase in November.

December’s jump was driven by gains in most of the index’s components, suggesting the short-term outlook is getting brighter and the economy continues to build momentum, the Conference Board said.

Source: Reuter





Florida Tops in the U.S. for Cash Sales of Homes in July

16 10 2014

Florida had the largest share of cash sales of any state in July, with 49.7 percent, a new report from CoreLogic shows.

For the United States as a whole, cash sales made up 32.9 percent of total home sales in July, the lowest share since August 2008 and down from 35.9 percent in July 2013.

Besides Florida, other states with the largest percentage of cash sales included Alabama (47.6 percent), New York (44.5 percent), West Virginia (42 percent) and Idaho (39.9 percent).

Of the largest 100 core based statistical areas measured by population, West Palm Beach-Boca Raton-Delray Beach had the highest share of cash sales at 57.9 percent, followed by Cape Coral-Fort Myers (57.3 percent), Miami-Miami Beach-Kendall (56.5 percent), North Port-Sarasota-Bradenton (55.8 percent) and Detroit-Dearborn-Livonia, Mich. (55.8 percent).

Washington-Arlington-Alexandria, D.C.-Va.-Md. had the lowest cash sales share at 15.4 percent.

Source: Jacksonville Business Journal.





Ponte Vedra Dominates Priciest Home Sales in Second Quarter

13 10 2014

The second quarter of 2014 saw a number of multi-million dollar home sales in the Jacksonville area, with the majority of them in Ponte Vedra Beach.

The top sale of the quarter was a 4,200-square-foot home in the 800 block of Ponte Vedra Beach Boulevard, and nine more of the top 20 sales were nearby

Together, the 20 homes sold for just over $49 million, with the average price of the list around $2.5 million.

As well as Ponte Vedra Beach, the other waterfront areas of the region — not surprisingly — helped fill out the list, with Jacksonville Beach, Atlantic Beach and Fernandina Beach all snagging spots. Jacksonville proper had three homes on the list.

Source: Jacksonville Business Journal





Augst Home Prices Up 6.4 Percent Over Last Year

8 10 2014

Home prices continued the annual gains in August but have appreciated at a slower pace since hitting a peak a year ago.

CoreLogic, which tracks data on the housing market, reported that prices rose 6.4 percent in August compared with the same month a year ago, representing 30 months of year-over-year increases.

Home prices hit a high of 12 percent year-over-year in October 2013 and has been dropping since then.

“Continued moderation of home price appreciation is a welcomed sign of more balanced real estate markets and less pressure on affordability for potential home buyers in the near future,” Fleming said.

Prices were up 0.3 percent in August over July.

At the state level, including distressed sales, all states showed year-over-year home price appreciation in August.

Prices reached new highs in nine states — Alaska, Colorado, Iowa, Louisiana, Nebraska, North Dakota, Oklahoma, Texas and Wyoming — plus the District of Columbia.

Excluding distressed sales, home prices nationally increased 5.9 percent in August compared with the same month a year ago and 0.3 percent on a monthly basis.

Also, taking out distressed sales, 49 states and the District of Columbia showed year-over-year home price appreciation in August, with Mississippi being the only state to experience a decline (-1.7 percent).

CoreLogic’s forecast shows that home prices, including distressed sales, will increase 0.2 percent from August to September and by 5.2 percent from August to August 2015.

“Home prices continue to rise, albeit more slowly, across most of the U.S.,” said Anand Nallathambi, president and CEO of CoreLogic.

“Major metropolitan areas such as Riverside and Los Angeles, California, and Houston continue to lead the way with strong price gains buoyed by tight supplies and a gradual rebound in economic activity.”

Source: CoreLogic

 





U.S. Existing Home Sales Dip in August

30 09 2014

U.S. existing home sales retreated 1.8 percent to a 5.05 million annual pace in August.

Pending home sales dropped in August for the same reason closings did— investors retreated from the housing market

The National Association of Realtors’ Pending Home Sales Index, which is based on contract signings, fell 1 percent last month to 104.7. That number still represents an above-average level of contract activity.

But traditional home buyers who rely on mortgages will have to carry the housing market going forward — investors who pay cash aren’t buying as many homes as they were.

“Fewer distressed homes at bargain prices and the acknowledgement we’re entering a rising interest rate environment likely caused hesitation among investors last month,” said NAR Chief Economist Lawrence Yun.

The question is whether first-time buyers will become bigger players in the housing market. They’ve represented less than one-third of home purchasers over the past two years.

Yun thinks their share will go up gradually.

“The employment outlook for young adults is brightening and their incomes finally appear to be rising,” he said. “Jobs and income gains will help repay student debt and better position first-time buyers, setting the stage for improved sales growth in upcoming years.”

Yun projects existing home sales will total 4.94 million this year, down 3 percent from 2013.

The South remains the hottest market, with a Pending Home Sales Index of 117. The Northeast is the coolest, with an index of 86.5.

Source: Nightly Business Report and Bloomberg








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