Sales of newly built, single-family homes rose 5.7 percent to a seasonally adjusted annual rate of 313,000 units in September, according to newly released data from the U.S. Commerce Department. This marks the fastest pace of new-home sales in the past five months.
"Today's report highlights the gradual improvement in housing market conditions that is becoming evident in certain pockets of the country, as consumers who can surmount very restrictive lending standards to qualify for a favorable mortgage rate seize on this opportunity to buy," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "The latest numbers also reveal that first-time buyers are driving the new-homes market right now, as evidenced by the volume of lower-priced, entry-level homes under contract. It's worth noting that these consumers are very dependent upon federal policies and programs that support homeownership, such as the mortgage interest deduction and low-downpayment mortgage options that have been threatened by recent government proposals."
"The improved rate of new-home sales in September is on par with NAHB's forecast for the overall number of sales this year and in keeping with the spotty improvements that our latest builder surveys have highlighted in select markets," said NAHB Chief Economist David Crowe. "While 313,000 is still an exceptionally low rate of new-home sales by historic standards, it is an encouraging sign of an anticipated broader recovery over the course of next year, and builders have helped the situation by keeping their inventories of homes for sale very lean in areas where there is an oversupply of existing units."
Regionally, new-home sales were mixed in September, with gains of 11.2 percent and 9.7 percent registered in the South and West, respectively, and declines of 4.2 percent and 12.2 percent registered in the Northeast and Midwest, respectively.
The inventory of new homes for sale held at an all-time record low of 163,000 units in September. This represents a modest 6.2 -month supply at the current sales pace.
Wednesday, October 26, 2011
Wednesday, October 12, 2011
Number of Improving Housing Markets Nearly Doubles in October
The second edition of the National Association of Home Builders/ First American Improving Markets Index (IMI), released today, shows 23 individual housing markets now qualifying as "improving" under the new gauge's parameters. This is nearly double the 12 housing markets that made the list last month.
The index reveals metropolitan areas that have shown improvement for at least six months in housing permits, employment and housing prices. The following metros were listed in October:
•Alexandria, LA
•Amarillo, TX
•Anchorage, AK
•Bismarck, ND
•Casper, WY
•Fairbanks, AK
•Fayetteville, NC
•Houma, LA
•Iowa City, IA
•Jonesboro, AR
•Kankakee, IL
•McAllen, TX
•Midland, TX
•New Orleans, LA
•Odessa, TX
•Pine Bluff, AR
•Pittsburgh, PA
•Sherman, TX
•Sumter, SC
•Waco, TX
•Waterloo, IA
•Wichita Falls, TX
•Winston-Salem, NC
"Both the number and geographic diversity of improving housing markets expanded this month, with Iowa, Illinois and South Carolina all newly represented by one entry or more on the list," said National Association of Home Builders (NAHB) Chairman Bob Nielsen, a home builder from Reno, Nev. "This is further evidence that, despite the tough conditions that persist in many cities, pockets of improvement are emerging in local housing markets across the country."
"While Pittsburgh and New Orleans remain the two largest improving markets, the October IMI is heavily weighted by smaller cities in which energy and agriculture are the primary economic drivers and where the effects of the recession have been less pronounced," said NAHB Chief Economist David Crowe. "In particular, Texas stands out for its seven entries on the improving markets list."
Bangor, Maine, was the only area to drop off of the improving markets list in October, due to a decline in local building permits.
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.
Please visit www.nahb.org/imi for additional data, tables and a list of 2011 future economic release dates.
The index reveals metropolitan areas that have shown improvement for at least six months in housing permits, employment and housing prices. The following metros were listed in October:
•Alexandria, LA
•Amarillo, TX
•Anchorage, AK
•Bismarck, ND
•Casper, WY
•Fairbanks, AK
•Fayetteville, NC
•Houma, LA
•Iowa City, IA
•Jonesboro, AR
•Kankakee, IL
•McAllen, TX
•Midland, TX
•New Orleans, LA
•Odessa, TX
•Pine Bluff, AR
•Pittsburgh, PA
•Sherman, TX
•Sumter, SC
•Waco, TX
•Waterloo, IA
•Wichita Falls, TX
•Winston-Salem, NC
"Both the number and geographic diversity of improving housing markets expanded this month, with Iowa, Illinois and South Carolina all newly represented by one entry or more on the list," said National Association of Home Builders (NAHB) Chairman Bob Nielsen, a home builder from Reno, Nev. "This is further evidence that, despite the tough conditions that persist in many cities, pockets of improvement are emerging in local housing markets across the country."
"While Pittsburgh and New Orleans remain the two largest improving markets, the October IMI is heavily weighted by smaller cities in which energy and agriculture are the primary economic drivers and where the effects of the recession have been less pronounced," said NAHB Chief Economist David Crowe. "In particular, Texas stands out for its seven entries on the improving markets list."
Bangor, Maine, was the only area to drop off of the improving markets list in October, due to a decline in local building permits.
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.
Please visit www.nahb.org/imi for additional data, tables and a list of 2011 future economic release dates.
Friday, October 7, 2011
Feelin' Hot.. Hot.. Hot!
The summer may be over, but some parts of the economy are just starting to heat up. One economic indicator that has come in hotter lately is inflation. At the end of September, the final reading of GDP in the 2nd Quarter showed inflation at 2.5%, which was up from the previous reading of 2.4%.
That elevated inflation reading was released on the heels of a hot Core Consumer Price Index (CPI), which has risen steadily and jumped to the upper-end of the Fed’s comfort level in the latest release.
Although Fed Chair Ben Bernanke stated a couple weeks ago that inflation has "moderated" of late and should continue to do so, there are still some reasons for concern. For example, we are experiencing an unprecedented amount of stimulus and low rates, which is something never seen before in history.
So why is this significant?
The concept is simple: If inflation rises, investors in Bonds demand a higher yield to offset the lost buying power inflation imposes on a fixed payment. And as home loan rates are tied to Mortgage Bonds, this would mean home loan rates move higher.
Once inflation starts to emerge it can manifest rather quickly. Future inflation readings will be closely watched to see if a trend higher is emerging, and last month’s elevated number will certainly heat up the debate surrounding more stimulus, as more money into the system fuels inflation further.
If inflation heats up even more, the Fed will likely back off their "low rates until mid-2013" mandate. Inflation really does change everything, so the markets will continue to follow this story closely.
That elevated inflation reading was released on the heels of a hot Core Consumer Price Index (CPI), which has risen steadily and jumped to the upper-end of the Fed’s comfort level in the latest release.
Although Fed Chair Ben Bernanke stated a couple weeks ago that inflation has "moderated" of late and should continue to do so, there are still some reasons for concern. For example, we are experiencing an unprecedented amount of stimulus and low rates, which is something never seen before in history.
So why is this significant?
The concept is simple: If inflation rises, investors in Bonds demand a higher yield to offset the lost buying power inflation imposes on a fixed payment. And as home loan rates are tied to Mortgage Bonds, this would mean home loan rates move higher.
Once inflation starts to emerge it can manifest rather quickly. Future inflation readings will be closely watched to see if a trend higher is emerging, and last month’s elevated number will certainly heat up the debate surrounding more stimulus, as more money into the system fuels inflation further.
If inflation heats up even more, the Fed will likely back off their "low rates until mid-2013" mandate. Inflation really does change everything, so the markets will continue to follow this story closely.
Saturday, October 1, 2011
Home prices post fourth month of gains
U.S. home prices inched up for the fourth month in a row, rising 0.9 percent from June to July, according to the latest Standard & Poor's/Case-Shiller Home Price Indices.
Only two of the 20 metro areas tracked by the Case-Shiller 20-City Composite saw month-to-month price declines: Las Vegas (-0.2 percent) and Phoenix (-0.1 percent). The index showed prices in Las Vegas down 59.3 percent from their August 2006 peak, hitting a new low.
Looking back a year, 18 out of 20 metro areas saw annual price declines, with the price index for Minneapolis falling 9.1 percent, Phoenix down 8.8 percent, and Portland, Ore., dropping 8.4 percent.
Detroit (up 1.2 percent) and Washington D.C. (up 0.3 percent) were the only cities to post annual gains in July, leaving the 20-City Composite down 4.1 percent.
But a dozen other cities -- Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Las Vegas, Miami, Minneapolis, Phoenix, Portland, and Tampa -- posted improvements in annual price declines compared to June.
Standard & Poor's said the report included some "unusually large revisions" across some metro areas. Detroit was the most affected, with additional sales in May and June showing "a much healthier market than previously thought."
Only two of the 20 metro areas tracked by the Case-Shiller 20-City Composite saw month-to-month price declines: Las Vegas (-0.2 percent) and Phoenix (-0.1 percent). The index showed prices in Las Vegas down 59.3 percent from their August 2006 peak, hitting a new low.
Looking back a year, 18 out of 20 metro areas saw annual price declines, with the price index for Minneapolis falling 9.1 percent, Phoenix down 8.8 percent, and Portland, Ore., dropping 8.4 percent.
Detroit (up 1.2 percent) and Washington D.C. (up 0.3 percent) were the only cities to post annual gains in July, leaving the 20-City Composite down 4.1 percent.
But a dozen other cities -- Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Las Vegas, Miami, Minneapolis, Phoenix, Portland, and Tampa -- posted improvements in annual price declines compared to June.
Standard & Poor's said the report included some "unusually large revisions" across some metro areas. Detroit was the most affected, with additional sales in May and June showing "a much healthier market than previously thought."
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