Housing & Construction March 2022
Builder Confidence Falls to 82
Builder confidence slipped to 82 in February after falling to 83 in January, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI hit an all-time high of 90 last November. Despite the decline, the HMI has been above 80 for the past five months. Production delays due to shortages of materials and labor are raising costs and pricing buyers out of the market. The HMI index gauging current sales conditions increased one point to 90, the gauge measuring sales expectations in the next six months fell two points to 80, and the component charting traffic of prospective buyers posted a four-point decline to 65. Regional scores remained mixed. Any number over 50 indicates that more builders view the component as good than view it as poor.
Building Permits Rise 0.7%
Overall permits inched up by 0.7% in January to 1.90 million annual units after jumping to a 1.87 million units in December. Single-family permits rose 6.8% to 1.21 million annual units after increasing to 1.13 million units in December. Multifamily permits dropped 8.3% to 694,000 annual units after rising to 745,000 annual units in December. There are now 785,000 single-family homes under construction, a 26.8% year-over-year gain. There are 758,000 multifamily units under construction, a 14% gain. Regional permits were mixed year to date.
Housing Starts Fall 4.1%
Housing starts fell 4.1% in January to a seasonally adjusted annual rate of 1.64 million units after rising to 1.70 million units in December. Single-family starts fell 5.6% to 1.12 million units after falling to 1.17 million units in December. Regional starts were mixed. The number of single-family homes under construction continues to rise as supply chain log jams prevent homes from being completed. Rising costs combined with mortgage rates that are creeping up are making housing less affordable and pricing more first-time buyers out of the market.
New Home Sales Fall 4.5%
New home sales fell 4.5% in January to a seasonally adjusted annual rate of 801,000 homes. December sales were revised sharply upwards. New single-family home inventory was up 34.4% over last year, rising to a 6.1 months’ supply, with 406,000 homes available for sale. However, just 37,000 are completed and ready to occupy. The median sales price rose to $423,300 in January from $395,500 in December and is up more than 13% compared to a year ago, due primarily to higher development costs, including materials. Regional new home sales were mixed. Sales of new homes are tabulated when contracts are signed and are considered a more timely barometer of the housing market than purchases of previously-owned homes, which are calculated when a contract closes.
Existing Home Sales Rise 6.7%
Existing home sales jumped 6.7% in January to a seasonally adjusted annual rate of 6.5 million units after falling to 6.18 million units in December, according to the National Association of Realtors. The inventory of unsold existing homes fell to a new all-time low of 860,000 at the end of January. That’s an all-time low of a 1.6 months’ supply. The median existing-home sales price was up 15.4% year over year to $350,000. Year-over-year prices have risen for 119 consecutive months. Properties were on the market for an average of just 19 days in January, with homes priced under $500,000 being snapped up in even less time. Existing home sales rose in all regions.
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