Tag Archives: single-family homes

U.S. new home sales hit six-month high; median price stays above $400,000

WASHINGTON (Reuters) – Sales of new U.S. single-family homes surged to a six-month high in September, but higher house prices are making homeownership less affordable for some first-time buyers.

New home sales jumped 14.0% to a seasonally adjusted annual rate of 800,000 units last month, the highest level since March, the Commerce Department said on Tuesday. August’s sales pace was revised down to 702,000 units from the previously reported 740,000 units. Sales increased in the populous South, as well as in the West and Northeast. They, however, fell in the Midwest.

Economists polled by Reuters had forecast new home sales, which account for more than 10% of U.S. home sales, increasing to a rate of 760,000 units. Sales dropped 17.6% on a year-on-year basis in September. They peaked at a rate of 993,000 units in January, which was the highest since the end of 2006.

Demand for housing surged early in the COVID-19 pandemic amid an exodus from cities to suburbs and other low-density locations as Americans sought more spacious accommodations for home offices and online schooling. The buying frenzy has abated as workers return to offices and schools reopened for in-person learning, thanks to COVID-19 vaccinations.

The median new house price accelerated 18.7% in September to $408,800 from a year ago. Sales continued to be concentrated in the $200,000-$749,000 price range. Sales in the under-$200,000 price bracket, the sought-after segment of the market, accounted for only 2% of transactions.

About 74% of homes sold last month were either under construction or yet to be built. There were 379,000 new homes on the market, unchanged from in August. Houses under construction made up 62.5% of the inventory, with homes yet to be built accounting for about 28%.

Builders are being hamstrung by shortages of key inputs like copper and steel because of strained supply chains. Lumber for framing remains expensive, while labor and some household appliances are also scarce.

The government reported last week that housing starts and building permits fell in September.

At September’s sales pace it would take 5.7 months to clear the supply of houses on the market, down from 6.5 months in August.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)

U.S. new home sales blow past expectations in January

By Lucia Mutikani

WASHINGTON (Reuters) – Sales of new U.S. single-family homes increased more than expected in January, boosted by historically low mortgage rates and an acute shortage of previously owned houses on the market.

The report from the Commerce Department on Wednesday suggested the housing market would continue to underpin the economy’s recovery from the COVID-19 recession. Momentum could, however, ebb in the near term after winter storms wreaked havoc this month in Texas and large parts of the South region.

Higher house prices because of the tight inventory resulting from lack of land and very expensive lumber could push home ownership out of the reach of many first-time buyers.

“There is an insatiable demand for homes right now, and it can’t be met by resales of existing homes, so people are signing contracts for new homes,” said Holden Lewis, home and mortgage expert at NerdWallet.

New home sales rose 4.3% to a seasonally adjusted annual rate of 923,000 units last month. December’s sales pace was revised higher to 885,000 units from the previously reported 842,000 units. Economists polled by Reuters had forecast new home sales, which account for 12.1% of U.S. home sales, climbing 2.1% to a rate of 855,000 units in January.

The median new house price increased 5.3% from a year earlier to $346,400 in January. New home sales are drawn from a sample of houses selected from building permits and tend to be volatile on a month-to-month basis. New home sales surged 19.3% on a year-on-year basis in January.

Sales increased in the South, Midwest and West, but declined in the Northeast. They were concentrated in the $200,000-$749,000 price range. Sales below the $200,000 price bracket, the sought-after segment of the market, accounted for only 6% of transactions last month.

Stocks on Wall Street were trading higher, with the PHLX housing index outperforming the broader market. The dollar gained versus a basket of currencies. U.S. Treasury prices were lower.

SUPPLY TIGHT

The National Association of Realtors reported last week that the supply of previously owned homes available for sale plunged to a record low in January. That has pushed buyers toward the market for new homes. Demand for housing is being driven by Americans seeking more space for home offices and schooling as the year-long coronavirus pandemic drags on.

Though mortgage rates have risen in recent weeks in tandem with U.S. Treasury yields as investors anticipate stronger economic growth and higher inflation, the 30-year fixed rate remains well below 3%.

A separate report from the Mortgage Bankers Association on Wednesday showed applications for loans to buy a home decreased 12% last week from a week earlier. Mortgage loan applications were 7% higher compared to the same period last year.

Economists believed the week-to-week decline in applications reflected disruptions caused by the snow storms, which left large swathes of Texas in the dark and without water supplies.

“We would expect a bounce-back over the next few weeks as activity resumes,” said Veronica Clark, an economist at Citigroup in New York. “Housing sector activity should continue to be supportive of GDP growth at least through the first half of 2021.”

Housing and manufacturing have outperformed other sectors of the economy during the pandemic. The government reported last week that building permits soared in January to their highest level since May 2006. But expensive inputs and lack of land pose a threat to continued robust housing market gains.

According to a survey of single-family homebuilders this month, record-high lumber prices were “adding thousands of dollars to the cost of a new home and causing some builders to abruptly halt projects.” Softwood lumber prices jumped by historic 73% on a year-on-year basis in January.

There were 307,000 new homes on the market last month, up from 299,000 in December. At January’s sales pace it would take 4.0 months to clear the supply of houses on the market, down from 4.1 months in December. About 72.4% of homes sold last month were either under construction or yet to be built.

“Strong demand, a shortage of supply and rapidly rising prices is the perfect combination of factors that should convince builders that now remains a really good time to get the shovels in the ground,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

U.S. new home sales vault to near 14-year high in August

WASHINGTON (Reuters) – Sales of new U.S. single-family homes increased to their highest level in nearly 14 years in August, suggesting the housing market continued to gain momentum even as the economy’s recovery from the COVID-19 recession appears to be slowing.

The Commerce Department said on Thursday new home sales rose 4.8% to a seasonally adjusted annual rate of 1.011 million units last month, the highest level since September 2006. New home sales are counted at the signing of a contract, making them a leading housing market indicator.

July’s sales pace was revised upward to 965,000 units from the previously reported 901,000 units. Economists polled by Reuters had forecast new home sales, which account for about 14% of housing market sales, slipping 1% to a rate of 895,000-units.

The report followed on the heels of data this week showing sales of previously owned homes near a 14-year high in August.

The housing market is being powered by record-low mortgage rates and a pandemic-fueled migration to suburbs and low-density areas in search of more spacious accommodation as many people work from home. Unemployment has disproportionately affected low-wage workers in the services sector, who are typically young and renters.

In August, new home sales rose 5.0% in the Northeast. They jumped 13.4% in the South, which accounts for the bulk of transactions. But sales fell 1.7% in the West and decreased 21.4% in the Midwest. The median new house price fell 4.3% to $312,800 in August from a year ago. New home sales last month were concentrated in the $200,000 to $499,000 price range.

There were 282,000 new homes on the market last month, down from 291,000 in July. At August’s sales pace it would take 3.3 months to clear the supply of houses on the market, down from 3.6 months in July. About 71% of the homes sold last month were either under construction or yet to be built.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)