Home builders see positive trend in new home sales
Solid job growth, improving household formations, continuing favorable housing affordability conditions, and tight existing home inventory are credited with boosting sales of new homes, according to the National Association of Home Builders.
In a recent "Eye on Housing" report, NAHB said the pace of new single family home sales improved to 592,000 (a seasonally adjusted figure). That's up 12.8 percent from a year ago and 6.1 percent from January. The organization also credits a mild winter in many parts of the country as a contributing factor in those gains.
NAHB reported inventory growth during February rising to 266,000 homes from a figure of around 240,000 for most of 2016. That translates to about 5.4 months of supply, which NAHB said is a healthy level.
The latest figures also indicate a growing share of "homes not-yet-started" in builder inventory. Compared to a year ago, that segment has increased 42 percent.
February data also indicate recent growth at two ends of the market. The median new home sales price fell to $296,000, which NAHB officials say is consistent with expanding inventory. Unlike the median price, the average home price jumped to $390,400, which is attributed to growth in sales priced at $750,000 or more. Sales in the range of $300,000-to-$400,000 declined during the same timeframe.
Regionally, all areas except the Northeast (down 21 percent) saw monthly growth in sales, most notably in the Midwest where volumes jumped 31 percent.
Ongoing tight inventory coupled with solid builder confidence bode well for sustained growth for single-family construction, according to NAHB. Pricing "remains an open question," the builders' group believes, citing rising construction prices and interest rates.