Housing & Construction October 2024

Builder Confidence Rises to 41
Builder Confidence rose two points to 41 in September after falling to 39 in August, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The increase came after four consecutive monthly declines. All three HMI indices were up in September. The index charting current sales conditions rose one point to 45, the component measuring sales expectations in the next six months increased four points to 53 and the gauge charting traffic of prospective buyers posted a two-point gain to 27. Regional three-month moving averages were mixed. Any number over 50 indicates that more builders have a positive outlook than a negative one.
 
Building Permits Rise 4.9%
Overall building permits rose 4.9% to 1.48 million annualized units in August after falling to 1.4 million units in July. Single-family permits increased 2.8% to a 967,000 unit rate after falling to 938,000 units in July. Multifamily permits increased 9.2% to an annualized 508,000 pace after dropping to 438,000 units in July. Regional permit issuance was mixed.
 
Housing Starts Rise 9.6%
Housing starts rose 9.6% in August to a seasonally adjusted annual rate of 1.36 million units after falling to 1.24 million units in July. Single-family starts increased 15.8% to a 992,000 seasonally adjusted annual rate after falling to 851,000 units in July. Inventory was at a relatively low 4.4-months’ supply. Regional housing starts were mixed. Single-family units under construction fell 5.2% to 642,000 homes after falling to 653,000 homes in July. The number of multifamily units under construction fell 13.2% to 886,000 units. The number of multifamily units under construction is now the lowest since July 2022.
 
New Home Sales Fall 4.7%
New home sales fell 4.7% in August to a seasonally adjusted annual rate of 716,000 new homes after rising to an upwardly revised 751,000 new homes in July, according to the National Association of Home Builders. After higher revisions for the May and June data, new home sales from January through July of 2024 are up 2.6% in 2024 compared to the same period in 2023. New single-family home inventory rose slightly to a 7.8 months’ supply from 7.5 months in July but there is only a 4.1 months’ supply of homes actually available for sale; a 6 month supply is considered normal. 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 August to a seasonally adjusted annual rate of 3.86 million. Sales were down 4.2% from August 2023. The median existing-home sales price rose for the fourteenth consecutive month, to $416,700. Inventory rose 0.7% to 1.35 million at the end of August, a 4.2 months’ supply at the current monthly sales pace. Regional existing home sales were mixed. Analysts think potential buyers for both new and existing homes are waiting for rates to drop.
 
Regional Housing Data 

Mortgage Rates Drop to 6.08% 

• 30-year fixed-rate mortgages fell to 6.08% at the end of September after falling to 6.35% at the end of August. Mortgage rates were 7.3% at the end of September 2023
• Mortgage rates fell to 3.00% in 2021 during the pandemic and crested at just over 8.00% in 2023.

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