US Home Price Predictions As we leave the Corona Virus…
New Home Construction and Sales
While the resale homes market struggles to get traction, the new home market is booming in 2020 heading into a promising 2021 for home builders.
After a big drop in home construction and sales, the market is whiplashing back, perhaps stronger than ever. The new homes market is the one to watch now.
Taylor Morrison Home the No. 5 U.S. home builder, whose sales declined 30% in April versus a year earlier, reported a 17% increase in May. “We’ve seen that momentum continue,” CEO Sheryl Palmer says. “How we can go from peak to trough back to peak again, all in about 10, 12 weeks, is unlike anything I’ve seen.” — from Barrons news report.
The reason for the growth in new home sales may be due to a big change in home buyer’s values. With the threat of Covid 19 and a preference for the burbs or rural areas, new work at home routines, and low mortgage rates, some buyers see new homes as the right choice going forward into 2021.
Glen Kelman, CEO of Redfin noted that traffic growth for his website’s online listings for houses in suburbs and small towns has grown 164% over the past two months vs the major metros. Those sellers living in outlying areas or in new construction neighborhoods should be able to name their price.
I’ve forecasted that home prices will rise this summer. It may even be a bidding war market.
The National Association of Home Builders said Tuesday that May sales of newly constructed homes were up 12.7% year over year were up 16.6% from April’s sales numbers. NAHB’s Chuck Fowker said sales are up 1.9% year to date in 2020.
“The May sales numbers are in line with rising builder sentiment. With home building considered an essential business, this solid sales report is another indicator that housing is leading the economic recovery.” said NAHB Chairman Chuck Fowke in a NAHBNow report.
New Home Inventory Falling
New home Inventory fell to a 5.6 months supply, with 318,000 new single-family homes for sale. Inventory is down 16.4% from May 2019. Only 76,000 units are completed, ready to occupy. The median new home sales price was $317,900 while the median price twelve months ago was $312,700.
Across the US, the year-to-date basis new home sales were up in all US regions: 6.8% in the Northeast, and 1.4% in the West, 0.3% in the South, and 9.5% in the Midwest.
“As the nation reopens, housing is well-positioned to lead the economy forward. Inventory is tight, mortgage applications are increasing, interest rates are low and confidence is rising. And buyer traffic more than doubled in one month even as builders report growing online and phone inquiries stemming from the outbreak.” said NAHB Chairman Dean Mon, a home builder and developer from Shrewsbury, N.J.
Please do Share on Facebook with your Friends!
New Residential Home Sales
NAHB’s Robert Dietz reported home builders using pricing incentives in April, but have since reduced those incentives as sales have picked up.
The Home Inventory Squeeze is Coming
Stats show a drop of 15% year-over-year decline in homes available for sale.
NAHB’s new homes sold data indicates an increase in homes sold which had not begun construction, rising almost 20% to a 184,000 annual rate. In May there was a 15% year-over-year decline in homes available for sale that were currently under construction.
New Housing Construction Starts
Census.gov reported privately-owned housing starts in May rose 4.2% to a seasonally adjusted annual rate of 974,000. This was 4.3% above the revised April estimate of 934,000, and is still below last May’s rate of 1,268,000 units. This drop of 650,000 homes started per month has created a huge shortage of new homes. With demand picking up, home prices should rise.
Single-family housing starts in May rose .1% to a new rate of 675,000 units. This was also 0.1 % above the revised April housing starts figure of of 674,000.
The May rate for units in buildings with five units or more was 291,000.
New Home Building Permits
Looking to the future inventory, Census.gov reported that privately-owned housing building permits in May rose 14.4% to a seasonally adjusted annual rate of 1,220,000. That’s up from April’s building permits of 1,066,000. It’s still 8.8 percent lower than the May 2019 rate of 1,338,000 units.
Single-family permits issued in May rose 11.9% to 745,000 units, which is 11.9% above the revised April figure of 666,000 units.
The May rate for multifamily buildings with five units totalled 434,000 in May.
Home Builder Confidence Rising
And home builders are forecasting better times for buyer demand and sales across the US. Builder confidence in the market for newly-built single-family homes jumped 21 points to 58 in June, according to the NAHB /Wells Fargo Housing Market Index (HMI).
As this chart shows, June’s confidence indicators are rocketing.
Don’t forget to check the housing market forecast for 2021, and more on major metro markets in including Los Angeles, Denver, Dallas, Philadelphia, Atlanta, Boston and New York. See the state forecasts for Florida and California.
Housing Market Predictions 2021 | Housing Market Forecast Part 2 | Corona Virus and the Real Estate Market | Will Home Prices Fall? | Stock Market Forecast 2021 | Housing Market Crash? | Mortgage Rates | Will Home Prices Fall in Florida? | Dallas Real Estate | Denver Real Estate | New Home Construction | Atlanta Real Estate | Should I Buy a New Home? | When Will House Prices Drop? | Sitemap | RSS Syndication
Please do Share this post on Facebook, Twitter, or Linkedin. It’s good to share!!