Housing Figures: Builder Confidence at Record High, Lumber a Concern
September 1, 2020
Housing Figures is our monthly round-up of the top news stories related to residential new construction spending and the latest market numbers.
The numbers — from new home sales to housing starts and builder confidence — continue to impress. Simultaneously, it’s hard to miss the headlines about rising lumber costs. We keep an eye on both in this month’s Housing Figures.
Builder confidence returned to a record high in August. NAHB and Wells Fargo’s Housing Market Index rose to 78 this month. That matches a previous record set in December 1998. Confidence rose the highest in the West, jumping 15 points to 78. All indices used to measure conditions, including current sales conditions and sales expectations, saw gains. [Housing Wire]
New homes now more expensive thanks to lumber. The average price of a new home has increased by approximately $16,000 from April thanks to a surge in lumber prices. That’s according to NAHB which found that the increase takes into account softwood lumber used in sheathing, flooring, underlayment and roofing, just to name a few areas. [NAHB Now]
Sales of large homes are up 21 percent. Redfin found that the typical home sold from the end of July to mid-August was 3.7 percent larger than in 2019. That represents about 1,700 square feet and compares to an average year-over-year growth of only 0.4 percent from 2015 to 2019. The numbers continue to indicate that the pandemic has spurred a desire for larger homes. [Redfin]
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A housing bubble is not on the horizon. At least according to Housing Wire’s analyst Logan Mohtashami, who writes that the latest existing home sales locks in a v-shaped recovery for housing. He advises that the two main drivers of housing — demographics and mortgage rates — are rock solid, and that's what is important. [Housing Wire]
New home starts rose nearly 23 percent in July. Home builders started 22.6% more homes in July from June, and were 23.4% above the July 2019 level. It’s the third month in a row that starts increased. Construction also rose in all regions. The Northeast saw the biggest gains with a 35 percent increase, followed by the South at about 33 percent. The Midwest and West saw more modest gains at almost six percent growth. [ABC News]
New pending home sales jumped 32.7 percent. Year-over-year pending new home sales jumped nearly 33 percent in July. In month-over-month numbers, new-home sales increased by 5.3 percent from June. The numbers indicate seasonality has not been a strong factor in homebuying this year as people continue to make up for the slower peak-pandemic spring season. [Builder]