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Housing Figures: Single-Family Starts and Builder Confidence Looking Good

November 3, 2020

Housing Figures: Single-Family Starts and Builder Confidence Looking Good

Housing Figures is our monthly round-up of the top news stories related to residential new construction spending and the latest market numbers.  

Builders continued to feel good in October, with the Housing Market Index coming in at a record high. That’s likely because single-family starts were at their highest level since 2007 in September, while new home sales continued to be strong, though they took a small dip from AugustMeanwhile, home prices are also on the rise.  

Builder confidence at sky-high levels. Builder confidence came in high in October according to the latest NAHB/Wells Fargo Housing Market Index. The HMI jumped two points to 85, which surpassed the all-time high of 83 in September. All major regions saw an increase in confidence with the largest gain in the Northeast — though builders are most confident overall in the West. Strong demand and a renewed focus on the home has helped keep confidence high. [Mortgage Professional America] 

Single-family starts at highest level since 2007. September’s single-family starts came in at an annual rate of 1.108 million. That’s 8.5 percent above the revised August ratea level that hasn’t been seen since 2007. Overall housing starts, including multifamily, came in at an annual rate of 1.415 million, which was 1.9 percent above August’s rate. [HousingWire] 

September new home sales take a dip. September’s new home sales fell 3.5 percent according to the U.S. Census Bureau. New homes came in at 959,000, which nevertheless represents a 32.1 percent increase from September 2019’s pace. On a year-to-date count, new home sales are up almost 17 percent. [NAHB Now] 

U.S. Case-Shiller index shows accelerationHome prices rose 5.71 percent in August according to the Case-Shiller Home Price Index. That represents a new high and the fastest rate of increase since July 2018. The month-to-month index increased by 1.06 percent from July, which also represents the fastest growth pace since spring 2017. [CoreLogic] 

Building permits and completions up from August. Building permits for privately-owned housing units rose 5.2 percent from August, representing a seasonally adjusted annual rate of 1.553 million. That rate is also 8.1 percent above September 2019September’s housing completions came in at an adjusted rate of 1.413 million, which represents a 15.3 percent increase from August and a 25.8 percent year-over-year increase. [Census Bureau] 

Pending home sales show decreasesThe four-month streak of pending home sales growth ended in September with a 2.2 percent decrease from August. Still, the National Association of Realtors found that contract signings went up 20.5 percent from 2019 with all four major regions seeing double-digit increases. NAR’s chief economist believes that despite the September pullback, 2020 will end with more homes sold than last year. [Builder] 

Meanwhile, the New Home PSI is up from August. The New Home Pending Sales Index, tracked by Zonda, saw a 2.7 percent month-over-month increase from August to September. That’s a nearly 47 percent increase from September 2019. The top three home markets turned out to be Denver, Jacksonville, Florida and Raleigh, North Carolina. [Builder]  

Gap between new home sales and single-family starts at historic levels. A recent NAHB analysis found that there’s a notable gap between sales and construction and that construction will need to increase to keep up with the pace of sales. The data indicates there’s a strong opportunity for builders, particularly with low interest rates, an inventory deficit and more. [NAHB Now] 

September’s existing home sales jump almost 10 percent. In another measure of the market, existing home sales in September jumped 9.4 percent to a seasonally adjusted annualized rate of 6.54 million units. The National Association of Realtors also found that the median home price in September came in at $311,800, representing a nearly 15 percent gain over September 2019. [CNBC] 

Builder confidence also high in 55+ market. Builder confidence jumped 18 points to 83 in the third quarter, according to the NAHB 55+ Housing Market Index. That’s an all-time high, as builders saw 55+ homebuyers coming out in force, driving up sales along the way. [NAHB Now] 

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