Builders are Busy with New Homes
The latest estimates from the US Census Bureau and Department of Housing and Urban Development show that new home sales in July were 31.3% higher than this time last year, and 12.4% higher than last month, at a seasonally adjusted annual rate of 654,000.
Zillow’s Chief Economist, Svenja Gudell, stated:
“July(‘s) new home sales data was a surprise, but a welcome one. For years, the market has been practically begging builders to both ramp up their efforts overall and to put more focus on serving the less expensive end of the market. Today’s data confirms both are happening in earnest.”
Comments from Ed Brady, Chairman of The National Association of Home Builder’s (NAHB):
“This rise in new home sales is consistent with our builders’ reports that market conditions have been improving. As existing home inventory remains flat, we should see more consumers turning to new construction.”
NAHB Chief Economist, Robert Dietz, believes this is just the start for new home sales:
“July’s positive report shows there is a need for new single-family homes, buoyed by increased household formation, job gains and attractive mortgage rates. This uptick in demand should translate into increased housing production throughout 2016 and into next year.”
Real Estate Bottom Line
New home sales hit their highest mark in over 9 years. Home builders have ramped up construction of new homes which has helped with the lack of existing inventory of homes for sale. For the past two months, new home sales have surged, with July’s total coming in at the highest since October 2007. Many buyers are turning to new construction, as the inventory of existing homes has not been able to keep up with demand.