Builder Confidence Falls to 86
Builder confidence fell four points to 86 in December after rising to a record-setting 90 in November, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). It was the first time the index has been above 80 for four consecutive months and the eighth consecutive monthly increase. The HMI index gauging current sales conditions dropped four points to 92, the component measuring sales expectations in the next six months fell four points to 85 and the gauge charting traffic of prospective buyers dropped four points to 73. Regional scores were mixed after rising for six consecutive months. Any number over 50 indicates that more builders view the component as good than do as poor.
Building Permits Rise 6.2%
Overall building permits rose 6.2% in November to a seasonally adjusted annual rate of 1.64 million units after being unchanged at 1.55 million units in October. Single-family permits increased 1.3% to a 1.14 million unit rate after inching up 0.6% in October. Multifamily permits jumped 19.2% to a 496,000 unit pace after dropping to 425,000 units in October. On a year-to-date regional basis, permits were mixed.
Housing Starts Rise 1.2%
Housing starts rose 1.2% in November to a seasonally adjusted annual rate of 1.55 million units after rising to 1.53 million units in October. Single-family starts rose 0.4% to a seasonally adjusted annual rate of 1.19 million after rising more than 7% in both September and October. Single-family starts were up 10.0% year to date and remained at the highest level since spring 2007. Analysts expected starts to level off in November due to growing material shortages and higher lumber prices. Multifamily starts rose 4.0% to 361,000 units after remaining stable in October. Combined single-family and multifamily regional starts were mixed year to date compared to 2019.
New-Home Sales Fall 11%
New-home sales fell 11% in November to a seasonally adjusted annual rate of 841,000 units after slipping to 999,999 units in October. Sales were up 20.8% from November 2019. Inventory rose slightly to a 4.1 months’ supply, with 286,000 new single-family homes for sale, 11.2% lower than November 2019.The median sales price was $335,300, up from $328,000 in November 2019. NAHB noted that the widening gap between new-homes sold and homes under construction finally caught up with sales, with the inventory of completed, ready-to-occupy new homes for sale down 43% from November 2019 to just 43,000 new homes. Builders are grappling with rising prices for materials and shortages of lots and labor. New home sales rose in all four regions. 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 2.5%
Existing-home sales fell 2.5% in November to a seasonally adjusted annual rate of 6.69 million units after rising to 6.85 million in October. Existing home sales were up 25.8% from November 2019. The median existing home price for all housing types in November was $310,800, up 14.6% from November 2019. November’s national price increase marks 105 consecutive months of year-over-year gains. Total housing inventory at the end of November fell to a record-low of 1.28 million homes, down from 1.42 million homes in October and down from November 2019. Unsold inventory fell to a 2.3-months’ supply from 2.5 months in October and was down from a 3.7 months’ supply in November 2019. Sales were held back by the exceptionally low number of homes available to buy. The pandemic has boosted demand for homes but has also meant that fewer homeowners are willing to put their homes on the market and go through the process of showing them. That imbalance has pushed up prices and led to bidding wars in some markets. Properties were on the market for an average of 21 days, down from 38 days in November 2019. Regional existing-home sales fell in all regions except for the West, where they were unchanged.
Regional Housing Data
Mortgage Rates Steady at 2.7%
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