Housing Industry Picking Up Steam, Associations Report
The housing industry is showing signs of recovery with increased homebuilder confidence, higher existing home sales, and an increase in home prices, say associations tracking the trend.
U.S. homebuilder confidence is up along with existing home sales, according to the National Association of Homebuilders (NAHB) and the National Association of Realtors (NAR), both of which released reports last week detailing the positive indicators.
According to the NAHB/Wells Fargo Market Index, homebuilder confidence rose five points from 41 in October to 46 in November, a marked increase from the same time last year.
“While our confidence gauge has yet to breach the 50 mark—at which point an equal number of builders view sales conditions as good versus poor—we have certainly made substantial progress since this time last year, when the [index] stood at 19,” NAHB Chief Economist David Crowe said in a statement.
U.S. new-home construction also rose 3.6 percent in October—the highest growth rate the industry has seen since July 2008, according to NAHB.
The report “bears out similar changes in other economic indicators that housing continues to recover at a slow but steady place and is right in line with our expectations of modest month-to-month growth,” Crowe said.
The West saw the highest increase in housing starts, at 17.2 percent, while the Midwest saw an 8.9 percent increase. Housing starts decreased by 6.5 percent in the Northeast, most likely due to Hurricane Sandy, and by 2.5 percent in the South.
While the regional increases in new-home construction are an improvement, there is still room for growth, Crowe said. “We still have a long way to go to get back to normal production, as inaccurate appraisals, tight lending conditions for home buyers, and policy uncertainties continue to impede the recovery.”
On the realty front, existing-home sales grew by 2.1 percent in October to an annual rate of 4.79 million, up from 4.69 million in September, NAR announced.
Home prices also continue to rise. The S&P/Case-Shiller Home Price Indices, released yesterday, reported home prices were up 3.6 percent for the third quarter of 2012 from the same quarter last year, marking six consecutive months of growth.
“With six months of consistently rising home prices, it is safe to say that we are now in the midst of a recovery in the housing market,” David Blitzer, chairman of the home price index committee, said in a statement.
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