Archive | 2015

Prices can’t rise fast enough for builders

The National Association of Home Builders reported its housing-market index showed optimism among builders reached its highest level this month since October of 2005. The Commerce Department’s report on building activity showed construction was started on 740,000 single-family homes in September, up from 661,000 a year earlier.

Contributing to the high level of optimism is survivorship bias: There aren’t as many firms in business now as there were during the bubble. With homes fetching high prices and costs contained, it’s no wonder spirits are running high. In the twelve months leading up to August, the median price for a new home averaged $290,000 across the US, 35% higher than the average median price for an existing home over the same period.

Home building stocks have been doing well this year, handily outperforming the broader market.

Credits:

Justin Lahart & The Wall Street Journal

Post created by: Pamela Biggs

Good News Nationwide

September brought a rise of 6.5% in home building after two straight months of declines. An 18.3% increase in multifamily units, which include apartments and condominiums, led to this surge. Starts of single-family homes, which make up nearly two-thirds of the market, barely budged, rising a mere 0.3%.

Builders are confident home buyers will return to the housing market, drawn by an improved job market, higher rental costs, and continuing low interest rates from the Federal Reserve.

Sales of new homes rose in July and August, though sales have yet to reach their pre-recession levels. Building permits fell 5% between August and September, but year-to-date housing starts are up 12% and building permits up 13%.

Home construction figures can be volatile and subject to significant revisions, Tuesday’s report showed new home starts for august were revised to a 1.7% decline, compared with an initial estimate of a 3% decrease.

Rises in August

Sonoma County home prices climbed 10.2 percent in August from a year earlier, far outstripping the rise in home prices statewide, property data service CoreLogic reported Tuesday.

 

The company forecasts that national home prices will climb another 4.3 percent by August 2016. The higher mortgage rates and greater number of single family starts “should dampen demand and augment supply, leading to a moderation in home price growth” next year.

 

The Press Democrat’s monthly housing report placed the county’s median price of single family homes sold in August at $546,000 a nearly 15% increase from a year earlier.

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