Housing Figures: Single-Family Starts and Builder Confidence Looking Good
November 3, 2020
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 August. Meanwhile, 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 rate, a 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 acceleration. Home 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 2019. September’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 decreases. The 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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