Housing Starts Fall 4.0%
Housing starts fell 4.0% in July to a seasonally adjusted annual rate of 1.19 million units from a downwardly revised reading in June. Single-family starts rose 1.3% to 876,000 units after rising to 847,000 units in June and multifamily starts fell 16.2% to 315,000 units. Regional starts were mixed. Combined single-family and multifamily starts rose 3.7% in the South. Starts declined 5.7% in the Northeast, 7.9% in the Midwest and 12.3% in the West.
Building Permits Rise 8.4%
Building permits rose 8.4% in July to 1.34 million annual units after falling to 1.22 million units in June. Single-family permits rose 1.8% to a 838,000 units and multifamily permits jumped 21.8% to 498,000 units. Regional permits were mixed. Year to date, permits were up 2.4% in the Northeast. Permits were down 7.1% in the Midwest, 0.1% in the South and 6.8% in the West.
New-Home Sales Fall 2.8%
New-home sales fell 2.8% in July to a seasonally adjusted annual rate of 635,000 units after June sales were revised strongly upwards to 728,000 units. New home sales were up 4.1% from July 2018. The inventory of new homes for sale fell slightly to 337,000 homes, a 6.4-month supply at the current sales pace, up from a 6.3-month supply in June. The median sales price rose to $312,800 in July after rising to $310,400 in June. The median sales price in June 2018 was $327,500. Regional new home sales year to date were mixed. Sales were up 7.2% in the South and 9.5% in the West. Sales were down 15.4% in the Northeast and 12.4% in the Midwest. Wells Fargo noted that sliding mortgage rates and builder discounts have led to an overall improving sales trend, but prices remain below last year’s level as there is more focus on the entry level market. 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 2.5%
Existing home sales rose 2.5% in July to a seasonally adjusted annual rate of 5.42 million homes after falling to 5.27 million in June. Sales were up 0.6% from July 2018. Regional sales were mixed. Sales were up 1.6% in the Midwest, 1.8% in the South and 8.3% in the West. Sales dropped 2.9% in the Northeast. Total housing inventory at the end of July fell to 1.8 million after rising to 1.92 million in June. Unsold inventory is at a 4.2-month supply at the current sales pace, down from a 4.4-month supply in June and a 4.3-month supply in June 2018. The median existing home price for all housing types in July was $280,800, up 4.3% from July 2018. July was the 89th consecutive month that home prices increased.
Builder Confidence Rises to 66
Builder confidence rose one point to 66 in August after rising one point to 65 in July, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Builder confidence has been in the low- to mid-sixties for the past six months. Builders report demand has been solid, but development and construction costs continue to rise, labor remains in short supply and home prices continue to outpace consumer incomes, particularly at lower price points. The HMI indices were mixed in August. The index measuring current sales conditions rose two points to 73, the component gauging expectations in the next six months fell one point to 70 and the index measuring buyer traffic rose two points to 50. Looking at the three-month moving averages for regional HMI scores, the South rose one point to 69, the West rose one point to 73 and the Midwest rose one point to 57. The Northeast fell three points to 57.
Mortgage Rates Slip to 3.58%
A 30-year fixed-rate mortgage (FRM) was 3.58% at the end of August, down from 3.75% at the end of July. Rates were 4.52% at the end of August 2018. Freddie Mac expects rates to average 4.5% this year and 4.8% next year. The drop in mortgage rates has caused a corresponding increase in applications for mortgages and refinancing.
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