Housing & Construction April 2024

Builder Confidence Rises to 51
Builder Confidence rose three points to 51 in March after rising four points to 48 in February, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). It was the fourth consecutive month confidence increased and the first time the index has been above 50 since July 2023. All three indices rose in March, with current sales conditions rising four points to 56, sales expectations in the next six months rising two points to 62 and the component gauging traffic of prospective buyers increasing two points to 34. Confidence rose in all regions for the second consecutive month. Any number over 50 indicates that more builders view the component as good than view it as poor.
 
Building Permits Rise 1.9%
Overall building permits rose 1.9% in February to 1.52 million units after falling to 1.47 million units in January. Single-family permits rose 1.0% to 1.03 million annual units after rising to 1.02 million units in January. Multifamily permits rose 4.1% to 487,000 annual units after falling in February. Regional permit issuance was mixed.
 
Housing Starts Rise 10.7%
Housing starts rose 10.7% in February to a seasonally adjusted annual rate of 1.52 million units after falling to 1.33 million units in January. Single-family starts rose 11.6% to 1.13 million units after falling to 1.0 million units in January. Single-family starts were up 35.2% from February 2023 and were at the highest level since April 2022. Multifamily starts, which include apartment buildings and condos, rose 8.3% to an annualized 392,000 pace. Multifamily starts are typically very volatile.
 
New Home Sales Fall 0.3%
New home sales slipped 0.3% in February to a seasonally adjusted annual rate of 662,000 homes after rising to an upwardly revised rate in January, according to the National Association of Home Builders (NAHB). Sales were up 5.9% from February 2023. New single-family home inventory in February rose 1.3% from January to 463,000 homes, an 8.4 months’ supply at the current building pace. A 6 months’ supply is considered balanced. However, with only a 2.9 months’ supply of existing homes available for sale, NAHB economists believe that new home inventory can safely remain above the balanced measure. The median new home sale price in February was $400,500, down 3.5% from January and 7.6% compared to February 2023. 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 9.5%
Existing home sales jumped 9.5% in February to a seasonally adjusted annual rate of 4.38 million after rising to 4.0 million in January, according to the National Association of Realtors. Sales were down 3.3% from February 2023. The median existing-home sales price rose 5.7% year over year to $384,500, leaving year-over-year prices below $400,000 for the sixth consecutive month. The inventory of unsold existing homes rose 5.9% to 1.07 million homes, a 2.9-months’ supply at the current sales pace, down slightly from a 3.0 months’ supply in January. A chronic shortage of existing inventory continues to spur new home construction and sales despite high prices. Existing home sales were down year-over-year in all regions.
 
Regional Housing Data

Mortgage Rates Slip to 6.8% 

• 30-year fixed-rate mortgages dropped slightly to 6.8% at the end of March after rising to 6.9% at the end of February. Mortgage rates were 6.3% at the end of March 2023.
  
• The recent boomerang in rates has pushed uneasy potential homebuyers back to the sidelines even though home prices continue to rise and inventory remains in short supply.

 

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