Building confidence for newly-built single-family homes fell one point in January 2020, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index.
The last two monthly readings reported the highest sentiment levels since July 1999. NAHB states that low-interest rates and a healthy labor market, combined with a need for additional inventory, is “setting the stage for further home building gains in 2020.”
“With the Federal Reserve on pause and attractive mortgage rates, the steady rise in single-family construction that began last spring will continue into 2020,” the NAHB said. “However, builders continue to grapple with a shortage of lots and labor while buyers are frustrated by a lack of inventory, particularly among starter homes.”
The HMI index studying prospective buyers rose one point to 58, which is the highest level since December 2017. Current sales conditions fell three points to 81 and the component measuring sales expectation in the next six months remained at 79.
The three-month moving average for regional HMI scores found the Northeast rose one point to 62, the Midwest increased three points to 66, and the West increased one point to 84. The South was unchanged at 76.
A report by CoreLogic found Texas was home to the top-two markets with the highest share of new home sales from October 2018 to September 2019—Dallas and Houston.
Dallas had more than 32,000 new homes over that one-year span, followed by Houston at nearly 30,000. This increase occurred during the same period where Texas grew by 367,000 people.
Florida was second in growth, adding 233,000 residents. CoreLogic added that six of the ten metros with the largest number of new sales were in Texas and Florida—two states with the largest population gains.
Port St. Lucie, Florida, led the nation in new-home growth at nearly 30%, followed by Warren Robbins, Georgia; Ocala, Florida; and The Villages, Florida.
“These places had lower housing costs than in high-cost markets and had a collective unemployment rate that was two-tenths of a percentage point lower than the U.S. rate,” the report states.