Even though statistics show a lull in new home building permits and starts, new home sales are still going strong. Both May and June have seen a positive outcome for the housing market and new home buyers.
U.S. Department of Housing and Urban Development and the Commerce Department reported that nationwide housing dropped 11.1% in May, but building permits rose 11.8% (the highest it has been since August 2007). This almost equal fall and rise was predicted by economists because of lack of inventory in the housing market. Current new home starts are down, but building permits are up because builders are getting geared up for a big push because of this lack of inventory. It has dropped to around a 4-month supply, the lowest it’s been since the Recession. “The uptick in permits shows our builders are optimistic that more consumers are returning to the housing market,” said NAHB Chairman Tom Woods.
June’s readings are the highest since September 2014. NAHB/Wells Fargo Housing Market Index (HMI) reported that single-family homes rose 5 points to a level of 59 (a score of over 50 indicates a good housing market).
“The HMI indices measuring current and future sales expectations are at their highest levels since the last quarter of 2005, indicating a growing optimism among builders that housing will continue to strengthen in the months ahead,” said NAHB Chief Economist David Crowe.
The National Builders Association of Home Builders (NAHB) developed the NAHB/Wells Fargo Housing Market Index (HMI) by taking the monthly survey they have been conducting for 30 years and estimate the builder’s insight of the current housing market. The survey asks the builder to rate the sales expectations and current single -family home sales for the next 6 months as good fair or poor, and the traffic of prospective buyers as high to very high, average or low to very low. They take these scores and calculate the index.
“Builders are reporting more serious and committed buyers at their job sites and this is reflected in recent government data showing that new-home sales and single-family construction are gaining momentum,” said NAHB Chairman Tom Woods. This is great news for those who are looking to buy a newly built home and for builders who are in the business of new home building or custom home building. This coupled with an increase in pending home sales, new home sales and mortgage applications make it a great time to purchase a new home. In St. Tammany Parish, in Louisiana, if you are interested in building a new home for your family in Mandeville, Madisonville, Covington, or Abita Springs, Contact Ron Lee Homes to begin discussing designing your floorplan to either build on your lot or buy a lot in an existing subdivision. At Ron Lee Homes, we strive to make your new, custom home building dreams reality! Call 985-626-7619 or E-mail Info@RonLeeHomes.com.