Builder Confidence Rises to 56
Builder Confidence rose one point to 56 in July after rising five points to 55 in June, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). It was the seventh consecutive monthly increase in confidence. The HMI index gauging current sales conditions in July rose one point to 62, the component charting sales expectations in the next six months fell two points to 60, and the gauge measuring traffic of prospective buyers increased three points to 40, the highest reading since June of last year. Scores rose in all regions. The July HMI survey also revealed that despite elevated interest rates, builders’ use of sales incentives has declined, as the market has firmed, and resale inventory options remain limited. Any number over 50 indicates that more builders view the component as good than view it as poor.
Building Permits Fall 3.7%
Overall building permits fell 3.7% in June to 1.44 million annual units after rising to 1.49 million annual units in May. Single-family permits rose 2.2% to 922,000 annual units after rising to 897,00 million units in May but were down 21.5% from June 2022. Multifamily permits dropped 12.8% to an annualized pace of 518,000 units after rising to 594,000 units in May. Permits fell year to date in all regions.
Housing Starts Fall 8.0%
Housing starts fell 8.0% in June to a seasonally adjusted annual rate of 1.43 million units after rising more than 20% in May to 1.63 million units. Single-family starts dropped 7.0% to a seasonally adjusted annual rate of 935,000 after jumping to 997,000 units in May. The number of single-family units under construction fell 17% to 688,000. Meanwhile, the number of apartments under construction increased to 994,000, the highest total since May 1973. Regional starts were mixed.
New Home Sales Fall 2.5%
New home sales fell 2.5% in June to a seasonally adjusted annual rate of 697,000 homes and sales for May were revised downward, according to the National Association of Home Builders (NAHB). Demand for new homes cooled off in June as mortgage rates rose more than a quarter-point. New single-family home inventory in June fell 3.6% to 432,000 homes, down 3.6% compared to a year ago, a 7.4 months’ supply at the current building pace, up from 6.4 months in May. A measure near a 6 months’ supply is considered balanced. Of that total inventory, only 67,000 were completed, ready-to-occupy homes, up 91.4% from a year ago but representing just 15% of total inventory. The median new home sale price in June was $415,400, down roughly 4% compared to a year ago. Regional sales year to date 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 Fall 3.3%
Existing home sales fell 3.3% in June to a seasonally adjusted annual rate of 4.16 million homes after rising slightly to 4.30 million homes in May, according to the National Association of Realtors. Sales were down 18.9% from June 2022. The median existing-home sales price rose to $410,200 in June after rising to $396,100 in May. It was the second-highest median home price on record. Inventory held steady at 1.08 million homes after increasing 3.8% in May. That’s just a 3.1 months’ supply at the current sales pace, up slightly from May. The current supply of existing homes for sale is roughly half what it was in 2019 before the pandemic. Regional sales were mixed year to date.
Regional Housing Data
Mortgage Rates Rise to 6.81%
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