Housing Figures: New Home Sales Up and Starts Expected to Rise
February 6, 2020
Housing Figures is our monthly round-up of the top news stories related to residential new construction spending and the latest market numbers.
Good news for the new year: 2019 new home sales increased from 2018, with predictions for growth ahead, and housing starts are expected to rise to one million this year. In other numbers, homeownership rates are gaining and home prices are up.
2019 new home sales were up over 2018. An estimated 681,000 new homes were sold in 2019, representing a 10.3 percent increase over 2018. December 2019’s new home sales was 23 percent higher than the previous year. “High levels of home builder confidence, coupled with an insufficient existing housing supply to meet current demand, suggest growth ahead for new home sales this year,” Dean Mon, NAHB chairman, said. [NAHB Now]
Housing starts are expected to rise in 2020. The economists at Capital Economics predict in a new report that single-family starts will rise to 1 million this year. “There are encouraging signs that the cost and availability of materials, lots and labor are all starting to improve,” the report stated. The report also notes the strong new home demand and industry shift toward entry-level homes. [Housing Wire]
Homeownership rate climbs to highest level since 2013. Homeownership rates are at a six-year high in the fourth quarter of 2019 thanks in part to low mortgage rates. The share of Americans who own their home is now at 65.1 percent according to a Census Bureau report. That number increased from 64.8 percent in the previous quarter. [Crain’s Cleveland Business]
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Western housing markets show strongest recovery. SmartAsset studied the local housing markets that recovered the most and least since the recession, finding that western housing markets experienced the strongest recoveries. Boise, Idaho, San Francisco-San Mateo-Redwood City, California, and San Jose-Sunnyvale-Santa Clara, California, represented the top three markets. The least recovered market is Baltimore-Columbia-Towson, Maryland. [SmartAsset]
Home prices were up again in December. Home prices increased nationally by four percent from December 2018 to December 2019. CoreLogic is predicting another 5.2 percent gain during 2020. “Moderately priced homes are in high demand and short supply, pushing up values and eroding affordability for first-time buyers,” Dr. Frank Nothaft, chief economist at CoreLogic, said. [Builder]
Housing still more affordable than it’s been in two years. Black Knight’s latest Mortgage Monitor Report suggests the dueling factors of falling interest rates and rising home prices are actually creating increased affordability. “Despite the average home price increasing by nearly $13,000 from just over a year ago, the monthly mortgage payment required to buy that same home has actually dropped by 10 percent over that same span due to falling interest rates,” Ben Graboske, Black Knight’s data and analytics president, said.