New Home Sales, Inventory at Multi-Year Highs

Mortgage News

Mortgage Daily Staff

                                                 April 25, 2017

During just last month, there were more new homes sold than any month in nearly a decade. Even more impressive, is that the new-home inventory is the highest it’s been in almost eight years. But upcoming activity could be hurt by a Trump administration move.

Data jointly released Tuesday by the Census Bureau and Department of Housing and Urban Development indicate 58,000 new U.S. home sales were completed in March 2017.

Based on historical data from the Census Bureau, that was the most new home sales during any single month since August 2007, when the total was 60,000.

Including the downwardly revised 48,000 new home sales in February, there have been 149,000 newly constructed single-family houses sold so far during 2017.

During March 2016, there were an upwardly revised 50,000 new home sales.

Applying seasonal adjustments, the annual rate of
new home sales was 621,000 last month, the strongest month since July 2016’s downwardly revised annual rate of 622,000.

A month earlier, there was a
downwardly revised 587,000 annual rate, while the metric was an upwardly revised 537,000 in March 2016.

Genworth Mortgage Insurance Chief Economist Tian Liu noted in a written statement that March 2017 sales beat their expectations.

“Strong demand from homebuyers and very tight supply conditions in the overall housing market are fueling demand for new homes,” Liu said. “In addition, prices on new homes are stabilizing, suggesting more affordable homes are coming to the market, which will help builders capture more demand from first-time homebuyers.”

National Association of Home Builders Chairman Granger MacDonald explained in a statement that builders are concerned by ongoing increases in material costs, especially given a Commerce Department decision today “to impose a hefty tariff on Canadian lumber.”

Commerce Department Secretary Wilber Ross issued a statement Tuesday saying duties of around $1 billion have been imposed on Canadian softwood lumber exports to the United States in response to Canada’s intention to “effectively cut off the last dairy products being exported from the United States.”

Ross, a Trump-appointee, is the former owner of American Home Mortgage Servicing Inc., which was sold to Ocwen Financial Corp. in 2012.

Using a year-over-year comparison, seasonally adjusted sales in the West have soared one-third to 175,000. Midwest sales jumped 24 percent to 84,000, while Northeast volume rose 22 percent to 39,000, and activity in the South was up 6 percent to 323,000.

There were a seasonally adjusted 268,000 new U.S. residential properties for sale — the fattest inventory since July 2009.

A seasonally adjusted 5.2-month supply of new homes remained unsold as of the most-recent date — a tight supply that is keeping pressure on new home production.

The median U.S. home price was
$315,100 last month, while the average price was $388,200.

Mortgage Daily Staff

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