Tag Archives: Homebuilders

Builders lowered prices and buyers responded in August, pushing new home sales up 7.9 percent to 421,000, reversing almost half of July's 64,000 drop in sales, the Census Bureau and HUD reported Wednesday. The report for August showed a slight shift away from higher-priced homes as houses priced at $500,000 or more accounted for 9 percent of August sales, down from 12 percent in July. Homes priced at $300,000 or less represented 63 percent of all August sales, unchanged from July.

In a blog for the company, Trulia chief economist Jed Kolko posits his own theory for why new construction is moving so slowly.

Led by the strongest gain for single-family construction this, year, the pace of housing starts edged up 0.9 percent in August, the Census Bureau and HUD reported Wednesday. Builders broke ground in August on new homes at a seasonally adjusted annual rate of 891,000--up from a revised 883,000 in July--and filed for permits at the seasonally adjusted annual rate of 918,000, down from 954,000 in July. The gain in both single-family permits and starts came amid signs of improving builder confidence.

The National Association of Home Builders' (NAHB) Housing Market Index (HMI) stalled at 58 in September, unchanged from August's downwardly revised reading, the group reported.

Even as housing inventory starts to recover, the basic fundamentals of supply and demand--as measured by new starts versus job growth across the nation--point to continued price growth, according to one expert at John Burns Real Estate Consulting. Nationally, the employment growth-to-permit (E/P) ratio is 2.5, up from 2.3 last year and well above the "equilibrium level" of 1.2. Eighteen of the top 20 markets have an E/P ratio higher than the equilibrium.

Data from the Mortgage Bankers Association (MBA) for August shows mortgage applications for new home purchases declined compared to July. According to MBA's monthly Builder Application Survey (BAS), loan applications for the purchase of new homes fell 14 percent month-over-month in August. Taking information from the BAS--as well as assumptions regarding market coverage and other factors--MBA estimates sales of new single-family homes ran at a seasonally adjusted annual rate of 424,000 in August.

Friday's report on the August employment situation at the same time confounded analysts twice with a less than robust 169,000 month-month increase in payrolls and a staggering 58,000 reduction in the initial report on payrolls for July. While it may not be easy to reconcile the numbers in the employment situation report with themselves, it is even more difficult to reconcile them with other economic indicators.

While price gains may paint a picture of a recovery well on its way, construction figures aren't as encouraging, according to an analysis from Trulia. While prices are up 11 percent year-over-year in August, according to Trulia, which monitors list prices, construction activity is lagging. Additionally, when it comes to price gains and increases in construction, markets tend to be experiencing one or the other, with markets reporting price growth seeing meager construction.

As the market trudges toward recovery, housing starts remain depressed due to a shortage of vacant lots, according to the National Association of Home Builders (NAHB).

Residential construction spending edged up in July, according to numbers from the Census Bureau. Overall, construction spending was at a seasonally adjusted annual pace of $900.8 billion in July, 0.6 percent above June's revised estimate of $895.7 billion and 5.2 percent ahead of July 2012's $856.3 billion. Spending on residential construction was at a pace of $340.6 billion, up 0.5 percent from June and 16.8 percent from July 2012.