New Home Sales Archives - Page 6 of 6

New Home Sales 2010-2012 The market for newly-built homes remains strong.

As reported by the U.S. Department of Commerce, 372,000 new homes were sold in July on a seasonally-adjusted, annualized basis. A “new home” is a home that can be considered new construction.

July’s New Home Sales report highlights what today’s buyers of new construction and the nation’s home builders have witnessed for themselves already — that the market for newly-built homes is improving in Chicago and nationwide.

The number of new homes sold in July on a seasonally-adjusted, annualized basis matches the tally from May 2012, and is the highest reading since April 2010, the last month of that year’s federal home buyer tax credit.

The South Region continues to account for the majority of new construction sales, posting a 48% market share in July. South Region sales were up 9.1 percent as compared to one year ago. The other 3 regions posted higher sales volume as well :

South Region : +9.1% from July 2011
Northeast Region : +30.4% from July 2011
Midwest Region : +21.7% from July 2011
West Region : +63.8% from July 2011

Also noteworthy is that the increase in new home sales is coming at a time when new home supplies are slipping.

At the end of July 2012, there were just 142,000 new homes for sale nationwide. This is the smallest new home housing stock in at least 7 years, and a signal that buyers are buying homes faster than builders can build them. At the current pace of sales, the national supply of new homes would sell out in 4.6 months.

Because economists believe that a 6.0-month supply represents a market in balance, the current new home market is decidedly a “sellers market”. Buyers throughout Illinois should expect higher new home prices ahead.

Dating back to October 2011, the housing market has shown slow, steady growth. Home prices have moved higher and so has builder confidence. If you’re in the market for new construction consider going into contract soon. The longer you wait to buy, the more you may be asked to pay.

The number of newly-built homes sold slipped 8 percent in June from the month prior, says the U.S. Census Bureau in its latest New Home Sales report. The June data shows 350,000 homes sold nationwide on a seasonally-adjusted, annualized basis.

The home sale tally fell short of Wall Street expectations but the Census Bureau revised higher its previously-released results for March, April and May by a collective 33,000 units. This left the June New Home Sales report as the weakest of the last five months, yet still stronger than the 21 months preceding February.

In other words, despite retreating from May, the June New Home Sales data was still quite strong. As compared to June of last year, sales of newly-built homes are higher by 15% and the national inventory of new homes for sale is down to 144,000 units.

This marks a 13 percent inventory reduction in just twelve months.

At the current sales pace nationwide, the complete stock of new homes would “sell out” in 4.9 months, a noteworthy data point because analysts believe that a 6.0-month supply of homes marks a market in balance. Home supplies of below 6.0 months suggest a “seller’s market” where sellers have pricing power and excess leverage in negotiations.

Home supplies have been south of 6.0 months since October 2011. This is the same month that marked a shift with other housing data points, too, including Existing Home Sales and the Home Price Index.

Since October 2011, the average new home sale price is higher by 6% nationwide, a trend that should continue in Chicago through the end of 2012 and into 2013 — especially with mortgage rates at new all-time lows and home affordability at all-time highs. As more buyers enter the market amid limited supply, prices are expected to rise.

If you’re a home buyer in search of new construction, therefore, the best new home “deals” you may find may be the ones you find today.