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More Bullish Data : Housing Starts Climb 3.6%

November 23, 2012 by Jeff Cost

According to a joint release from the U.S. Census Bureau and the Department of Housing and Urban Development, Housing Starts rose 3.6% in October 2012, climbing to a seasonally-adjusted, annualized rate of 894,000 units.

A “housing start” is a new home on which construction has started and the report gives buyers and sellers across Ohio yet one more reason to be optimistic for the 2013 housing market.

Regionally, Housing Starts varied.

The West and Midwest Regions posted gains between September and October 2012; and, the South and Northeast Regions posted declines. The latter was affected by the effects of Hurricane Sandy.

West Region : +17.2% from the month prior
Midwest Region : +8.9% from the month prior
South Region : -2.5% from the month prior
Northeast Region : -6.5% from the month prior

Single-family housing starts — starts for homes not considered multi-unit properties or to be apartment buildings — was mostly unchanged, slipping 1,000 units on a seasonally-adjusted annualized basis.

The Housing Starts data is the third housing-related release this week that hints at a strong start for the 2013 housing market.

Early in the week, the National Association of Homebuilders released its Housing Market Index (HMI), a measure of home builder confidence in the new construction market. The HMI posted 46 — the highest reading since 2006. With mortgage rates low and buyer traffic high, builders are expecting a rash of sales between now and the New Year, and an elevated number of closing over the next six months, in general.

The HMI is scored on a scale of 1-100. One year ago, it read 19.

Then, the National Association of REALTORS® showed Existing Home Sales climbing 2.1% and home supply fell to a multi-year low. At the current sales pace, the entire U.S. home inventory would be sold in just 5.4 months. Analysts believe that a home supply of less than 6.0 months favors home sellers.

In unison, these three housing market reports suggest a sustained, national housing market recovery. Home prices are expected to rise into next year’s housing market.

Existing Home Sales Move Higher In October

November 21, 2012 by Jeff Cost

Existing Home Sales October 2012 After a small decline in September, Existing Home Sales rebounded in October, increasing a modest 2.1%.

The housing market’s slow, steady recovery continues as sales volume in all four regions expanded last month with the exception of the Hurricane Sandy-affected Northeast.

The National Association of REALTORS® monthly Existing Home Sales Report comprises completed sales of single-family homes, townhomes, condominiums, and co-ops. The Existing Home Sales report is compiled on a seasonally-adjusted, annualized basis. It shows a 10.9 percent sales increase as compared last year.

Sales volume might otherwise be higher, however, if not for a lack of homes for sale.

Total housing inventory fell 1.4 percent to 2.14 million homes last month which, at the current sales pace, represents a 5.4-month national supply — the lowest in more than 6 years.

The lack of supply amid burgeoning demand has led home prices higher nationwide. October’s median existing home sale price was $178,600 — an 11.1% increase from October 2011 and the eighth consecutive month during which the median sales price rose.

The last time that occurred was during the eight months ending May 2006.

In addition, the Existing Home Sales report showed that the median time on market in October rose to 71 days, up 1 day from September 2012. As compared to October 2011, however, median time on market is down 26% from 96 days.

Other noteworthy statistics from the October Existing Home Sales report include :

Foreclosures and short sales accounted for 24% of sales
Foreclosures sold for an average discount of 20% to market
Short sales sold for an average discount of 14% to market

Furthermore, thirty-two percent of homes sold in October were on the market for less than one month. 20% were on the market for six months or longer.

Record-low mortgage interest rates continue to spur housing, as do low prices. Neither will last indefinitely. If you plan to purchase a home in Cincinnati in 2013, therefore, consider moving up your time frame. Home ownership will likely increase in cost as the year moves on.

Homebuilder Confidence Spikes To 6-Year High

November 20, 2012 by Jeff Cost

NAHB Housing Market Index The National Association of Home Builders (NAHB) released its Housing Market Index (HMI) Tuesday, which showed sharp, 5-point increase to 46 for November 2012, marking the seventh consecutive monthly gain for the HMI, and lifting the index to its highest point since May 2006.

Readings under 50 indicate unfavorable housing conditions for builders. Readings over 50 signal “good” conditions.

The Housing Market Index is a measure of builder confidence, published monthly, based on a survey sent to NAHB members which asks them to rate housing market conditions.

In November, home builders reported gains in two of the three areas surveyed:

Current Single-Family Sales: 49 (+8 from October 2012)
Projected Single-Family Sales: 53 (+2 from October 2012)
Buyer Foot Traffic: 35 (unchanged from October 2012)

Builders report growing demand for new homes as inventories for alternative properties — distressed and foreclosed homes, for example — shrink nationwide.

Even Hurricane Sandy did little to suppress builder confidence.

The NAHB survey was conducted in the two weeks immediately following Hurricane Sandy so the Housing Market Index does reflect builder sentiment during that period. All regions of the country posted confidence gains in November.

The South Region showed a 4-point gain to 43; the West Region showed a 3-point gain to 47; the Midwest Region showed a 3-point gain to 45; and the Northeast Region showed a 2-point gain to 31.

Despite the gains, builders in Louisville and nationwide still report challenges with home appraisals and tight credit conditions. In addition, a shortage of buildable lots in some areas is limiting the ability for home builders to put more single-family homes on the market.

As builder confidence grows, today’s buyers throughout Ohio should prepare for the possibility of higher home prices. Confident sellers are less likely to make price concessions or to offer free upgrades.

If you are in the market for a new home, therefore, the time between now and the New Year may be the best opportunity to make a bid on a home. Starting next year, low prices may be gone.

More Bullish Data : Housing Starts Climb 3.6%

Existing Home Sales Move Higher In October

Homebuilder Confidence Spikes To 6-Year High

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