Builders Feel the Most Upbeat in More Than 4 Years

Article provided by: National Association of Home Builders, Daily Real Estate News (January 19, 2012)——————

BUILDERS FEEL THE MOST UPBEAT IN MORE THAN 4 YEARS

Builder confidence is at its highest level since June 2007, yet another sign that things are finally perking up in the new-home market, which has faced some of its darkest days on record this past year.

For the fourth consecutive month, builder sentiment for newly built, single-family homes was on the rise, according to the National Association of Home Builders and Wells Fargo Housing Market Index. The index measures builder sentiment on current and future sales conditions and buyer traffic.

The latest increase in the January index is “universally represented across every index component and region,” said Bob Nielsen, NAHB chairman.

“This good news comes on the heels of several months of gains in single-family housing starts and sales, and is yet another indication of the gradual but steady improvement that is beginning to take hold in an increasing number of housing markets nationwide,” Nielsen said.

Coming Off a Dismal 2011

The Commerce Department reported Thursday that for the third straight month, single-family home construction rose 4.5 percent in December. However, overall housing starts for the month dropped 4.1 percent, with gains in the single-family sector offset by a nearly 28 percent drop in apartment construction in December.

The latest news wraps up a dismal year for new-home building, with 2011 marking the fewest number of single-family homes built in half-century. In all, builders started about 606,900 homes in 2011 — that’s half the 1.2 million economists consider healthy for the sector.

Nevertheless, despite the mostly sluggish year for the sector, building did start to pick up in the last part of 2011 and housing analysts are upbeat that will continue. “We expect further sustained gains in starts and permits over the next few months; a real recovery is getting started,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, told the Associated Press.

Threats to Recovery Remain

NAHB Chief Economist David Crowe warns that “caution remains the word of the day as many builders continue to voice concerns about potential clients being unable to qualify for an affordable mortgage, appraisals coming through below construction cost, and the continuing flow of foreclosed properties hitting the market.”

Source: National Association of Home Builders and “December Ends Worst Year for Single-Family Home Construction,” Associated Press (Jan. 19, 2012) | Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors, residential real estate services in Nashville, Tennessee

More Cities Join ‘Improving’ Housing Market List

Daily Real Estate News | Tuesday, January 10, 2012…The National Association of Home Builders’ list of improving housing markets nearly doubled this month, as more cities showed signs of a rebound with their real estate markets.

The list now contains 76 improving markets, up from 41 in December, according to NAHB’s and First American’s Improving Markets Index, a monthly gauge that measures a city’s improvements in housing permits, employment, and housing prices for at least six months.

“The fact that the list of improving housing markets nearly doubled this month shows that a significant, positive trend is developing, and is even more relevant when you consider the expanding geographic distribution of the list — which now includes 31 states and the District of Columbia,” NAHB Chairman Bob Nielsen said in a statement.

These cities were added to the list in January:

• Florence, Ala.
• Tuscaloosa, Ala.
• Fayetteville, Ark.
• Denver, Col.
• Greeley, Col.
• Bridgeport, Conn.
• New Haven, Conn.
• Cape Coral, Fla.
• Jacksonville, Fla.
• Punta Gorda, Fla.
• Honolulu, Hawaii
• Ames, Iowa
• Des Moines, Iowa
• Dubuque, Iowa
• Elkhart, Ind.
• Indianapolis, Ind.
• Lafayette, Ind.
• Lake Charles, La.
• Worcester, Mass.
• Grand Rapids, Mich.
• Lansing, Mich.
• Monroe, Mich.
• Minneapolis, Minn.
• Columbia, Mo.
• Joplin, Mo.
• Fargo, N.D.
• Manchester, N.H.
• Cincinnati, Ohio
• Oklahoma City, Okla.
• Tulsa, Okla.
• Corvallis, Ore.
• Erie, Pa.
• Philadelphia, Pa.
• Chattanooga, Tenn.
• Clarksville, Tenn.
• Nashville, Tenn.
• College Station, Texas
• Dallas, Texas
• Victoria, Texas
• Madison, Wisc.

Source: National Association of Home Builders; Daily Real Estate News (011012); Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee

New-Home Construction Bounces Back, Soars 9.3%

New-home construction and building permits — a future gauge of construction — surged last month, slowly helping to pull the new-home market out of one of its worst years for home building.

Builders broke ground on more homes in November, a 9.3 percent increase over October, reaching the highest level since April 2010, the Commerce Department reported Tuesday. Year-over-year, new-home starts were up 24.3 percent in November.

Home construction increased to a seasonally adjusted annual rate of 685,000 homes in November. However, while it’s an improvement, the rate is still below the 1.2 million home pace that economists consider healthy for the new-home sector.

November’s increase was mostly driven by construction of multi-family homes with at least two units, which soared 25.3 percent in November. Construction of single-family homes increased 2.3 percent for the month.

Building permits jumped 5.7 percent in November, the highest increase since March 2010, with the increase mostly driven by apartment construction permits.

Builders Feeling More Confident

Meanwhile, for the third consecutive month, builder confidence in the new-home market continued to edge up, according to the National Association of Home Builders/Wells Fargo Housing Market Index for December. The index is at its highest point since May 2010.

While the index reached 21 in December, it is still far below 50, a reading which indicates more builders view conditions as good rather than poor. The index hasn’t reached that point since the housing boom in April 2006.

“While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets,” Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. “However, the difficulties that both builders and buyers continue to experience in accessing credit for new homes are holding back potential sales even in areas where economic conditions are improving.”

Source: Daily Real Estate News; “Apartment Construction Spurs 9.3% Jump in Housing Starts, But Level Remains Low,” Associated Press (Dec. 20, 2011); “U.S. Nov. Housing Starts +9.3% to 685K; Consensus +0.3%,” Dow Jones International News (Dec. 20, 2011); and National Association of Home Builders; Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee

Housing Affordability at Highest in 20 Years

Housing affordability continued to be near record highs in the second quarter, hovering near its highest level in the 20-plus years it has been recorded, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.

About 72 percent of all new and existing-homes sold in the second quarter of the year were affordable to families earning the national median income of $64,200, according to the index. The record high remains 74.6 percent, which was reached last quarter.

“At a time when home ownership is within reach of more households than it has been for more than two decades and interest rates are at historically low levels, the sluggish economy and the extremely tight credit conditions confronting home buyers and builders remain significant obstacles to many potential home sales,” says Bob Nielsen, chairman of the National Association of Home Builders. “That said, however, some housing markets across the country have stabilized and are beginning to show signs of a budding recovery.”

Most Affordable Housing Markets

According to the index, Youngstown-Warren-Boardman, Ohio-Pa., was the most affordable major housing market during the second quarter with 93.7 percent of all homes sold found to be affordable to households earning the area’s median family income of $54,900. Other cities ranking near the top for affordability is: Syracuse, N.Y.; Indianapolis-Carmel, Ind.; Dayton, Ohio; and Lakeland-Winter Haven, Fla.

Least Affordable Markets

The index found the least affordable market in the country–for the 13th consecutive quarter–is New York-White Plains-Wayne, N.Y.-N.J., in which 25.2 percent of all homes sold during the quarter were affordable to those earning the area’s median income of $67,400. The other least affordable major metro areas includes San Francisco-San Mateo-Redwood City, Calif.; Santa Ana-Anaheim-Irvine, Calif.; Los Angeles-Long Beach-Glendale, Calif.; and Honolulu.

Source: REALTOR® Magazine Daily News; National Association of Home Builders; Blog distribution provided by Kenneth Bargers and Bargers Solutions, a proud member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee