Tag Archives: Homebuilders

It’s been accepted for the last few years that housing supply hasn’t been able to keep up with demand, contributing to large gains in home prices nationwide—but how do the numbers break down, and how do specific groups of buyers and sellers balance against each other?

While most other reports have indicated a decline in Americans’ ability to pay for homes at the national median price ($205,000 as of Q4), NAHB’s latest index actually shows relative stability, with 64.7 percent of new and existing homes sold in Q4 classified as “affordable” to families earning the median income of $64,400. That result is a slight step up from the index reading of 64.5 percent recorded in Q3.

The Census and HUD announced jointly Wednesday that housing starts in January ran at a seasonally adjusted annual rate of 880,000, a 16 percent decline from December. The drop in starts came during a month in which homebuilder confidence in the single-family market (as measured by the National Association of Home Builders) measured at an index value of 57, reflecting general optimism.

The National Association of Home Builders’ (NAHB) Housing Market Index (HMI), released in partnership with Wells Fargo, posted a 10-point decline to 46 in the group’s latest report. It was the first time since May 2013 that the index measured below 50, the “neutral” point between a market viewed as “good” or “bad.” All four regions reported declines in confidence, with losses ranging from seven points in the South to 14 points in the West.

A survey of loan application volume from mortgage subsidiaries of homebuilders across the country suggests sales of new homes experienced a substantial leap in January. The Mortgage Bankers Association's (MBA) Builder Applications Survey indicates new home sales ran at a seasonally adjusted annual rate of 543,000 last month, reflecting a month-over-month increase of 35 percent. On an unadjusted basis, the group estimates there were 38,000 new home sales in January, a 36 percent increase over December.

While last year's rising home prices brought relief to many underwater homeowners, allowing many older homeowners with increased net worth to purchase new homes, they also precluded many young first-time buyers from purchasing, according to a report from BBVA Group. ""Older homeowners are increasingly able to purchase a new residence with cash only after they sell their current home,"" said Jason Frederick, an economist for BBVA Compass.

As of February, 58 out of approximately 350 metro areas nationwide have either returned to or exceeded their last ""normal"" levels of economic and housing activity.

Speaking at the National Association of Home Builders (NAHB) International Builders' Show (IBS) in Las Vegas, economists expressed a positive outlook for homebuilders in 2014--with a few warnings. NAHB chief economist David Crowe noted five key points for his positive projections: ""Consumers are back, pent-up demand is emerging, there is a growing need for new construction, distressed sales are diminishing and builders see it."" However, builders still face hurdles like tight credit conditions, and difficulties in obtaining accurate appraisals.

The Department of Commerce reported Monday that spending in December ran at a seasonally adjusted annual rate of $930.5 billion, 0.1 percent above November's revised estimate of $929.9 billion and 5.3 percent ahead of December 2012's $883.6 billion. December's figure was the highest since March 2009, when spending ran at a rate of $955.0 billion. Residential construction came in at a rate of $357.4 billion, its highest since June 2008.

Ever since home prices bottomed out, increases in Nevada, Arizona, California, and Florida have outpaced the country. At the same time, however, homebuilding has remained "very subdued."