Buyer Foot Traffic Through New Construction Up Nearly Threefold Since 2009
Home builder confidence in the newly-built, single-family housing market remains high.
In March, for the second consecutive month, the National Association of Homebuilders reports the Housing Market Index at 28 — a doubling of the reading from just 6 months ago and, along with last month, the highest HMI value since June 2007.
When home builder confidence reads 50 or better, it reflects favorable builder conditions in the single-family, new home market. Readings below 50 suggest unfavorable builder conditions.
The HMI itself is a composite reading. It’s the result of three separate surveys sent to home builders by the trade association. The NAHB asks builders to report on their current single-family home sales volume; their projected single-family home sales volume for the next 6 months; and, their current buyer “foot traffic”.
Approximately 400 surveys are returned each month. The results are compiled into the NAHB Housing Market Index.
In March, home builders provided mixed replies to the survey questions :
- Current Single-Family Sales : 29 (-1 from February)
- Projected Single-Family Sales : 36 (+2 from February)
- Buyer Foot Traffic : 22 (Unchanged from February)
It’s noteworthy, despite slowing sales in March, that home builders expect a surge in new home sales over the next 6 months. The reasons for this are several and should be of interest to today’s home buyers.
First, the jobs market is heating up. The U.S. economy has added more than 1 net new million jobs over the last 6 months and that is increasing the pool of potential home buyers in Texas and nationwide.
Second, the housing market, in general, is improving. Home sales are brisk in many U.S. markets and home supplies are dropping. This creates pressure on home prices to rise.
And, third, low mortgage rates have helped pushed home affordability to all-time highs. More home buyers earning the national median income can afford a median-priced home than at any time in history.
It’s all culminated in a monthly Buyer Foot Traffic reading which, at 22, is nearly triple the foot traffic reading from just three years ago. Home buyers — in Plano and everywhere else — are out in full-force, capitalizing on today’s buyer-friendly market.
If you’re looking to buy new construction in the second half of 2012, consider moving up your time frame. Market conditions are constantly changing, and may move out of your favor. As builder optimism increases, the price you pay for your new home may increase, too.
Start your New Home Search now - or call us 214-212-6770 with any questions – we work as Buyers Agents and represent your interest with the home builder when it’s time to buy an new home.
Foreclosure Volume Slated To Rise This Spring
After a series of months during which foreclosure volume was low, total filings have started to rise again, says RealtyTrac.
In February, 21 states posted a year-over-year increase in monthly foreclosure filings, according to the national foreclosure-tracking firm. This is nearly twice as many states as compared to December 2011, marking the highest monthly reading since November 2010.
A “foreclosure filing” is defined to include any one of the following foreclosure-related events : (1) The serving of a default notice, (2) A scheduled home auction, or (3) A bank repossession.
Nationally, the number of foreclosure filings fell 2 percent from January. However, it’s a trend that may reverse. Foreclosure volume is expected to rise over the next few months.
This is because the $25 billion mortgage servicer settlement provides a framework for servicers to execute necessary foreclosures, from notice-to-auction. Some analysts believe that foreclosure filings were artificially depressed in 2011 because of the absence of such guidance.
Like all things in real estate, though, foreclosures remain local.
For example, nationally, there was one foreclosure for every 637 housing units. On a state-by-state basis, however, the results looked different.
- Nevada : 1 foreclosure for every 278 housing units
- California : 1 foreclosure for every 283 housing units
- Arizona : 1 foreclosure for every 312 housing units
- Georgia : 1 foreclosure for every 331 housing units
- Florida : 1 foreclosure for every 341 housing units
Even on a city-by-city level, foreclosure concentration varied. Figures from several select cities include :
- Atlanta : 1 foreclosure for every 244 housing units
- Chicago : 1 foreclosure for every 302 housing units
- New York : 1 foreclosure for every 3,439 housing units
- Seattle : 1 foreclosure for every 1,229 housing units
- Washington : 1 foreclosure for every 1,198 housing units
One reason why foreclosure concentration is worth tracking is because homes in various stage of foreclosure are often sold at deep discounts as compared to similar, non-distressed homes. It’s no wonder foreclosed homes are in high demand among today’s Frisco home buyers.
However, if you plan to buy a foreclosure in Texas , be sure to work with an experienced real estate agent. Foreclosed homes are often sold “as-is”, and may be defective at best and uninhabitable at worst. It makes good sense to have an advocate on your side to help with contracts and inspections.
Housing And Mortgage : Experts Make 2012 Predictions
Housing and Mortgage 2012 Predictions
As the new year begins, there are no shortage of stories telling us what to expect in 2012.
Housing finished 2011 with momentum and mortgage rates closed at the lowest rates of all time.
Some expect those trends to continue through the first quarter and beyond. Others expect a rapid reversal.
Who’s right and who’s wrong? A quick look through the newspapers, websites and business television programs reveals “experts” with opposing, well-delivered arguments views. It’s tough to know who to believe.
For example, here are some “on-the-record” predictions for 2012 :
- Home prices will rise (says Freddie Mac)
- Home prices will fall (says CBS News)
- Mortgage rates will rise (says American Banker)
- Mortgage rates will fall (says the LA Times)
The issue for buyers, seller, and would-be refinancers nationwide is that it can be a challenge to separate a “prediction” from fact at times.
When an argument is made on the pages of a respected newspaper or website, or is presented on CNBC or Bloomberg by a well-dressed, well-spoken industry insider, we’re inclined to believe what we read and hear.
This is human nature.
However, we must force ourselves to remember that any analysis about the future — whether it’s housing-related, mortgage-related, or something else — are based on a combination of past events and personal opinion.
Predictions are guesses about what might come next — nothing more.
For example, at the start of 2009, few people expected the 30-year fixed rate mortgage to stay below 6 percent, but it did. Then, at the start of 2010, few people expected the 30-year fixed rate mortgage to stay below 5 percent, but it did.
All we can know for certain about today’s market is that both mortgage rates and home values are low, creating favorable home-buying conditions nationwide.
At that start of last year, few people expected mortgage rates to even reach 4 percent. Today, rates “with points” price in the 3s.
What 2012 has in store we just can’t know.
New Home Sales Approach Bull Market Territory
New Construction Inventory
New home inventory is approaching bull market territory.
The number of new homes sold rose 2 percent in November. On a seasonally-adjusted, annualized basis, home buyers bought 315,000 newly-built homes last month according to the Census Bureau.
November’s New Home Sales data marks the 4th straight month of rising sales volume, lifting the housing-market metric to a 7-month high, and adding to the housing market’s recent show of strength.
Last week, we learned that Existing Home Sales also climbed in November.
The big story in the New Home Sales report, though, is the remaining new home supply nationwide.
With just 158,000 homes “on the market” and the pace of home sales hastening, the complete, national inventory of “new homes” would now be sold in just 6.0 months, a 0.2-month improvement from October. This is the quickest home sales pace in nearly 6 years for the new construction market.
It’s even faster than in April 2010 — the buyer-deadline month of last year’s federal home buyer tax credit.
Home builders expect the trend to continue, too. Buyer foot traffic is on the rise and builders have a strong outlook for the next 6 months.
It’s an unsettling series of developments for today’s home buyers. As home supplies drop and builders gain confidence, the ability of an buyer to negotiate for price reduction and/or upgrades shrinks.
If you’re a home buyer in search of new construction, therefore, consider that the best new construction “deals” of the next 12 months may be the ones you find today.
Start your Search for a new construction here.
Existing Home Sales Hits 10 Month High — Buyer Demand Strong
Home sales UP, inventory DOWN
Another strong showing for the housing sector: home resales hit 10-month high in November.
Existing Home Sales nationally rose 4 percent in November over October 2011.*
North Texas followed the national trend:**
- Sales up 4.5% November vs October
- Inventory down 24.1% November vs October
- There is a 5.9 month inventory supply
Who’s buying?
t’s interesting to look at the November buyers – here’s a break-down by buyer type:
- First-time buyers : 35%
- Repeat buyers : 46%
- Investor buyers : 19%
Home buyers and sellers should take note of November’s numbers because — behind the headlines — there’s a series of statistics that foretell higher home prices ahead.
An “existing home” is a home that has been previously occupied and cannot be categorized as new construction.
First, the total number of homes for sale nationwide dipped to 2.58 million, an 18% reduction from November 2010 and represents the fewest number of homes for sale since February 2007.
At the current sales pace, the complete home resale inventory would be sold in 7.0 months.
And, second, the real estate trade group reports that 33% of all homes under contract “failed” for some reason last month.
Contract failures can occur because of mortgage denials in underwriting; home inspection issues; and homes appraising for less than their respective purchase prices.
In other words, despite a reduction in the number of homes for sale, and a rash of failed contracts, Existing Home Sales volume is still on the rise.
Given high demand for home resales and shrinking home supplies, we should expect that home prices will rise through December 2011 and into early-2012, at least. Recent Housing Starts data supports this notion.
Thankfully, mortgage rates remain low. Low mortgage rates help keep homes affordable.
Ready to buy a new home? We have the resources to help you find the right home, the right loan. Norma Wall, Broker – 214-212-6770 info@come2dallas.com Search for property
*According to the National Association of REALTORS® seasonally-adjusted, annualized
**Data from North Texas Real Estate Information Systems the Multiple Listing Service of North Central Texas.
