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Tag: Market Update

New Construction Home Sales Drop in February

Housing Market, , ,

New construction costs and high mortgage rates decreased new home sales for February despite demand remaining solid given the lack of existing home inventory. The purchase of a new construction home is accounted for at any stage of the building process so long as a contract is signed or a deposit is accepted. The HUD (US Department of Housing and Urban Development) recently released data stating February saw a 2% decrease in sales of newly built single family homes and a 6.2% decrease in new home sales compared to last February. 

With a 2% decrease in sales, new construction homes for February totaled at 772,000 seasonally adjusted units that are expected to sell in the next 12 months. Of those 772,000 units, 407,000 are available for immediate sale which is a 33% increase in new home inventory compared to last year. That’s an estimated 6.3 months supply of homes and just 35,000 of those homes are completed and considered move-in ready. 

Bottom Line

The building of new construction homes are expected to meet the current demand of buyers given the limited supply of existing homes on the market. This increased demand requires additional new construction and with the numbers showing a 20% increase in construction costs and a 15% increase in the median price of homes, the cost to build and buy these new homes significantly outpace inflation. 

 

February Numbers Show A Drop in Existing Home Sales

Housing Market, , ,

The housing market update for February shows existing-homes are not selling the way they used to. The monthly inventory of unsold homes saw a slight increase, totaling around 870,000 units, which is equivalent to 1.7 months supply of existing homes. This marks a 7.2% drop in sales compared to January’s numbers and a 2.4% decrease in sales compared to last February. The current sales pace shows properties averaging 18 days on the market with 84% of homes sold in February being on the market for less than a month.

The adjusted annual rate fell to 6.02 million average home sales with first time home buyers making up 29% of home sales, investors and second home buyers at 19% and distress and foreclosures at 1%. We’ve seen home prices consistently increase over the past ten years to maintain the supply and demand equilibrium. Today, the supply of available homes is way below the demand for buyers. This year’s median existing- home price sits at $357,300, which is a 15% overall increase from last year’s $310,600 median price. This is a big issue for buyers who are also having to deal with rising mortgage rates. 

Bottom Line

Affordable housing continues to be a struggle in today’s market. With inflation and increasing interest rates, it’s no wonder a majority of consumers can’t save money to buy a home! The best thing you can do is talk to a lender you trust or message me and start a home buying game plan given your current situation. 

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