Builder Confidence Rises to 76
Builder confidence rose one point to 76 in September after falling five points to 75 in August, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The increase came after three consecutive monthly declines. The HMI hit an all-time high of 90 last November. Builders are still grappling with supply shortages, rising prices and long waits for materials, but the pace of single-family home construction has eased. The HMI index gauging current sales conditions rose one point to 82, the component measuring traffic of prospective buyers climbed two points to 61 and the gauge charting sales expectations in the next six months held steady at 81. Regional scores were mixed. Any number over 50 indicates that more builders view the component as good than view it as poor.
Building Permits Rise 6.0%
Overall building permits rose 6.0% in August to 1.73 million units annualized pace after dropping to an annual pace of 1.53 million units in July. Single-family permits increased 0.6% to 1.05 million units in August after dropping in July. Multifamily permits jumped 15.8% to 674,000 units in August after dropping to 413,000 units in July. NAHB noted that single-family homes permitted but not yet under construction are up 50% from August 2020, a sign of persistent supply chain issues. Regional permits were up on a year-to-date basis.
Housing Starts Rise 3.9%
Housing starts rose 3.9% in August to a seasonally adjusted annual rate of 1.62 million units after falling to 1.53 million units in July. Single-family starts fell 2.8% to a 1.08 million seasonally adjusted annual rate after falling to 1.11 million units in July. Single-family starts are up 23.8% year-to-date. The multifamily sector, which includes apartment buildings and condos, increased 20.6% to a 539,000 pace. NAHB reports that demand remains strong, but the housing market overall is dealing with rising affordability issues. Combined single-family and multifamily regional starts were up year to date compared to 2020. Single-family starts are still expected to rise this year, but at a much slower pace than they did during 2020.
New Home Sales Rise 1.5%
New home sales rose 1.5% in August to a seasonally adjusted 740,000 homes in August and July sales were revised upwards. Sales were up 2.4% from August 2020. Inventory was at a balanced 6.1-months’ supply, with 378,000 new single-family homes for sale, 74.3% higher than in August 2020. While inventory is rising, the share of homes not yet under construction is also going up, climbing to 28% from 21% in August 2020. The median sales price remained at $390,900 but was up 20% year over year. Regionally, new home sales were mixed. Year-over-year sales were up in all regions. NAHB cautioned that the jump in year-over-year sales is still due to the big slowdown in sales during the initial stages of the pandemic. 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 2.0%
Existing home sales fell 2.0% in August to a seasonally adjusted annual rate of 5.88 million units after rising to 5.99 million units in July and were down 1.5% from August 2020, according to the National Association of Realtors. The median price of a home sold in August fell slightly to $356,700 after dropping to $359,900 in July. Prices were still up 14.9% on a year-over-year basis, which marks some improvement from earlier this year when prices were up a record 23.6%. Year-over-year prices have risen for 114 consecutive months. Total inventories fell 1.5% to 1.29 million units after rising for the previous five consecutive months. Unsold inventory remained at a 2.6-month supply at the current sales pace but was down from 3.0 months in August 2020.
Regional Housing Data
Mortgage Rates Rise to 3.0%
© Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.