Home Builders Experiencing Heavy Foot Traffic And Higher Sales Volume

Home Builders have confidence. Do Home Buyers have confidence?
That's the question. Can we get enough confidence to go out and buy these homes.

Some leading economic surveys are improving. Mortgage rates are low.
Banks are loosening their purse strings. Are things in the housing market heating up, or are they just flat?  Give me the answers. I want to know.

In another good sign for the housing market, today's home builders believe that the housing market has turned a corner. Whatever corner they are on. (Winslow, Arizona - "What a sight to see")

For the third straight month, the Housing Market Index -- a home builder confidence survey from the National Association of Homebuilders -- reported strong monthly gains.

December's Housing Market Index climbed 2 points to 21 in December after a downward revision to last month's results. The index is now up seven points since September 2011, and sits at a 19-month high.

When home builder confidence reads 50 or better, it reflects favorable conditions in the single-family new home market. Readings below 50 reflect unfavorable conditions.

The Housing Market Index has not crossed 50 since April 2006.

The HMI itself is actually a composite reading; the result of three related home builder surveys. The National Association of Homebuilders asks its members about their current single-family home sales volume; their projected single-family home sales volume for the next 6 months; and their current buyer "foot traffic".
The results are compiled into the single Housing Market Index tally.

In December, builder survey responses showed strength across all 3 questions :

• Current Single-Family Sales : 22 (+2 from November)
• Projected Single-Family Sales : 26 (+1 from November)
• Buyer Foot Traffic : 18 (+3 from November)

These results support the recent New Home Sales and Housing Starts data, both of which show an increase in single-family sales, and a decrease in new home housing supply.

When demand rises and supplies fall, home prices climb.

It's also noteworthy that the Housing Market Index put buyer foot traffic at newly-built homes at its highest level since May 2008. With even more buyers expected to enter the market, new home prices are expected to rise across in 2012 -- especially in the face of shrinking home supplies.

For now, though, with home prices stable and mortgage rates low, buyers can grab "a deal". 60 days forward, though, may be too late. NOT!!!

The Spring Buying Season unofficially starts February 6, 2012.

Till next time

The New York Real Estate Nurse

Housing Starts Rising; New Construction Turns The Corner?

Yesterday I gave you the Homebuilder' report. Today I present you with
the Housing Starts. Love those STATS.

Another day, another signal that the market for newly-built homes is improving.

Single-Family Housing Starts rose to a seasonally-adjusted, annualized 430,000 units in October -- a 4 percent increase from September and the highest reading in 3 months.

A "Housing Start" is a home on which ground has been broken.
The increase in, surprised Wall Street analysts, although it shouldn't have.

Earlier this week, the National Association of Homebuilders showed that Homebuilder Confidence is at its highest point since May 2010, the effect of better market conditions and more sold units. Rising housing starts amid a lift in builder confidence is to be expected -- the two metrics have moved with loose correlation since mid-2000.

However, as with everything in real estate, Single-Family Housing Starts volume varied by location. The nation's 4 regions posted wide-ranging results :

• Northeast Region : + 10.0% from September
• Midwest Region : -4.1% from September
• South Region : +11.3% from September
• West Region : -10.2% from September

Buyers of new construction in the New York City area can infer two key points from last month's data.

First, with more homes will being built, home supply should rise, thereby softening pressure on rising home prices. This should help keep homes affordable.

However, the second point is that, with builder confidence rising, buyers are less likely to win price concessions and "free upgrades" in negotiations.

The last 6 weeks of 2011 may be your optimal time to buy new construction. Home prices remain affordable and mortgage rates are rock-bottom. In addition, because there are typically fewer active home buyers during the holidays, you'll be more likely to locate one of the few remaining new construction "deals".

Talk to your real estate agent about local trends and new construction.

Till next time

The New York Real Estate Nurse

Homebuilder Confidence Stays Flat

Homebuilders are feeling worse about the market for new homes nationwide.

Myself, I am late with the news. I am OK with the trend.

With construction credit tight and competition from foreclosures increasing, the National Association of Homebuilder's Housing Market Index slipped 1 point in September, falling to levels just below the index's 12-month average.

The HMI measures homebuilder confidence nationwide. It's the result of 3 separate homebuilder surveys, each designed to measure a specific facet of the homebuilder's business.

1. How are market conditions for the sale of new homes today? 
2. How are market conditions for the sale of new homes in 6 months?
3. How is prospective buyer foot traffic?

Each component survey showed a drop-off from August. Responses fell 1 point, 2 points, and 2 points, respectively. Together, September's composite reading was 14 out of a possible 100 points. Readings over 50 are considered favorable.

The HMI not been above 50 since April 2006.

With homebuilder confidence low -- and stagnant -- buyers of new homes in the New York City area should remain alert for "deals". Builders are more likely to offer free upgrades and other concessions to incoming buyers. The availability of such deals may increase as the seasons change and as the year comes to a close.
Low mortgage rates are making new homes attractive, too. Last week, 30-year fixed rate mortgage rates fell to their lowest levels of all-time. As compared to just 8 weeks ago, 30-year fixed rate mortgage payments are lower by 5 percent at all loan sizes, down $27 per month per $100,000 borrowed.

Things are getting cheaper, America is headed for stagflation. Anybody remember the 70's. What a decade!
The world is mired in debt and defaults could happen. Nobody could pay out on all the Swaps. Financial disaster all over again.

Till next time

The New York Real Estate Nurse

Housing Starts Surge 9 Percent; Signal A Strong Fall Season

Builders are busy once again.

According to the Census Bureau, Single-Family Housing Starts rose to 453,000 on a seasonally-adjusted, annualized basis in June -- a 9 percent spike from the month prior and the highest reading in 3 seasons.

A "Housing Start" is defined as a home breaking ground on new construction.

June's reading is largest one-month jump since June 2009. The reading surprised Wall Street despite that the Homebuilder Confidence survey may have foreshadowed the results.

Monday, the National Association of Homebuilders reported that builders are more confident about the future of the new home sales market, and forecast a large increase in sales over the next 6 months.

For buyers of new construction, the news is mixed. Rising confidence may mean that builders in Queens and Long Island are less willing to negotiate on upgrades and/or price, but rising construction levels add inventory to an already fragile market.
Adding to the nation's home supply without a corresponding increase in buyer demand shifts negotiation leverage away from builders.

The Census Bureau also reported on Building Permits.
In June, permits for single-family homes rose by 1,000 units nationwide on a seasonally-adjusted, annualized basis. This, too, bodes well for housing because 89 percent of homes with permits start construction within 60 days.

Momentum should carry forward into fall.

If you're buying new construction in New York , ask your real estate agent about local home supply, and how the market is trending. With mortgage rates low and the fall buying season approaching, you may find some of your best deals in the next few weeks.

Always remember, all Real Estate is local and all housing statistics are influenced by there locality.
So happy house hunting.

By the way, you can now follow me on a new Blog I have started called THE NY REAL ESTATE NURSE.
WWW.THENYREALESTATENURSE.COM

Till next time

Bob Ritchie

The New York Real Estate Nurse