Builder Confidence Steady
Builder confidence held steady in May after rising one point to 83 in April, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). It was the ninth consecutive month the index was above 80. While buyer demand remains strong, rising costs and lengthening delivery times for materials, particularly softwood lumber, are impacting sentiment and pushing many first-time and first-generation buyers to the sidelines. The HMI index gauging current sales conditions held steady at 88 and the component measuring sales expectations in the next six months rose one point to 81. The gauge charting traffic of prospective buyers fell one point to 73. Regional scores were mixed for the sixth consecutive month. Any number over 50 indicates that more builders view the component as good than view it as poor.
Building Permits Rise 0.3%
Overall permits increased rose 0.3% to a 1.76 million unit annualized rate in May from downwardly revised April numbers. Single-family permits fell 3.8% in April to 1.15 million units after 1.20 million units in March. Multifamily permits dropped 1.2% to a 567,000 pace after falling in February. On a year-to-date regional basis, permits were mixed.
Housing Starts Fall 9.5%
Housing starts fell 9.5% in April to a seasonally adjusted annual rate of 1.57 million units after rising to 1.74 million units in March. Single-family starts fell 13.5% to a seasonally adjusted annual rate of 1.09 million units after rising to 1.24 million units in March. The multifamily sector, which includes apartment buildings and condos, rose 0.8% to 482,000 units from downwardly revised numbers in March. Combined single-family and multifamily regional starts were mixed year to date compared to 2020. Single-family starts are expected to rise this year, but at a much slower pace than they did during 2020.
New Home Sales Drop 5.9%
New home sales fell 5.9% in April to a seasonally adjusted annual rate of 863,000 after sales for March were revised down significantly from an initial increase to 1.02 million units. Inventory rose to a 4.4 month supply of 316,000 new homes for sale after falling to 307,000 new homes in March. The inventory of single-family homes for sale was 33.3% below April 2020. The median sales price rose to $372,400 from $310,100 in April 2020. NAHB said that new home prices are up 20% year over year as builders pass rising costs along to consumers after months of trying to hold the line. Many builders are also limiting sales as a way of managing the supply chain, including access and cost factors related to lumber, appliances and other building materials. 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 2.7%
Existing-home sales fell 2.7% in April to a seasonally adjusted annual rate of 5.85 million homes after falling to 6.01 million homes in March, according to the National Association of Realtors (NAR). Sales were up 33.9% from April 2020, when they were severely impacted by the pandemic. The inventory of homes available for sale at the end of April was up 10.5% from March to 1.16 million units but down 20.5% from April 2020. The current inventory translates into a 2.4 month supply at the current sales pace, down from 4 months in April 2020. Regional sales were mixed. The percentage of first-time buyers fell to 31%, down 5% from April 2020. The median existing home price for all housing types increased 19.1% year over year to $341,600, the 110th consecutive month of year-over-year gains and the highest on record. The median price for single-family homes increased 20.3% year over year to $347,400.
Regional Housing Data
Mortgage Rates Remain Below 3.0%
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