Archive for August, 2016

NEW HOME SALES IN THE U.S. HIT 9 YEAR HIGH

Wednesday, August 24th, 2016

Newly built single family residences across the country jumped 12.4% according to the just released U.S. New Home Sales Report. July 2016 was the best month-to-month increase since October 2007. Year-to-year the July increase was a whopping 31.3%! This puts new home sales levels back to levels equivalent with levels prior to the Great Recession, but below all-time highs reached in 2005.

According to the US Commerce Department, the seasonally adjusted annual rate of 654,000 newly built homes traded hands. In fact, the total amount of new homes sold in the U.S. for the first half of 2016 was up over 12% compared to the same period in 2015. Economists believe historically low interest rates and strong job markets are the main contributing factors.

Additionally, many young home buyers have been sitting on the sidelines for several years and are just now beginning to realize the importance of homeownership.

New homes create jobs. Not only by the construction of the home but there are jobs created with ancillary services such as landscaping, decorating, etc.  All of these jobs markets see significant increases when home sales increase.

Finally, the National Association of Realtors collaborated on the strengthening home sale markets with June’s report on previously owned homes, which hit a 10 year high. Real estate has been the beacon! 

MIXED SIGNALS

Thursday, August 11th, 2016

Second quarter 2016 statistics have been released and they are not sending clear signals by any means.

On one hand, The National Association of Realtors reported that home prices rose in 83% of the nation’s 178 major real estate markets. Yet, according to CoreLogic Case Shiller Indices overall prices are now just 2% off the peak set in July 2006.

Homeownership rates are the lowest since the Census Bureau began tracking quarterly statistics in 1965 – now at 62.9%. Economists estimate 200,000 to 300,000 fewer US households are purchasing new homes annually, than during normal market conditions. The true American Dream of home ownership is in flux.

Personal wealth has always been driven for most by their homes. Retirement, tuition, vacations, and much more usually financed via home equity. Is there an entire generation of permanent renters out there? I hope not, for their sake.

First time home buyers are a critical piece of the puzzle and the government must support this vital future growth. Mortgage qualifications are a big part of today’s issues. Keep in mind, home sales create jobs and employ ancillary services from painting to landscaping.  It was home sales and the economic boost it provided that pulled us out of the worst economic downturn since the Great Depression.

How can lawmakers support growth from the bottom up?