Recovery Still on Track as New-Home Sales Jump in June
Sales of newly built, single-family homes surged 8.3% to a seasonally adjusted, annual rate of 497,000 units in June, their fastest pace in the last five years, according to data released July 24 by HUD and the U.S. Census Bureau. Gains were seen in three out of the four regions, with the Northeast, South and West posting very solid increases of 18.5%, 10.9% and 13.8%, respectively.
The Midwest, which saw an above-trend bump in May, posted an 11.8% decline this time around. Meanwhile, the total inventory of new homes for sale declined to 161,000 units in June, marking a razor-thin, 3.9-month supply at the current sales pace. The months' supply number has not fallen below this level since March of 2004.
Commenting on the data, NAHB Chief Economist David Crowe said, "The takeaway from this report is that the housing recovery is solidly on track and isn't going to be derailed by slightly higher mortgage rates. After years of fence-sitting, buyers are back and ready to move forward with an investment in homeownership." Looking ahead, he said he anticipates further, though more incremental, gains in sales through the end of this year.
Remodeler Confidence Rebounds in Latest Survey Confidence in the remodeling market rebounded in this year's second quarter following a modest dip at the beginning of the year, according to the latest reading of NAHB's Remodeling Market Index (RMI) on July 25. The RMI gained six points to 55, thanks in large part to rising sales of existing homes and increased demand for remodeling projects.
The future market indicators component of the index increased to 56 from 48 in the previous quarter. Meanwhile, the component measuring current market conditions rose to 54 from 50. All of the indicators of future activity (calls for bids, work committed for the next three months, backlogs, and appointments) were over 50 for the first time in eight years. Commenting on the latest survey, NAHB Chief Economist David Crowe noted that "Remodelers' positive sentiment is directly related to increased demand for their services. Rising home values are making remodeling jobs possible for more home owners, while existing home sales are providing additional momentum as home owners prepare their homes for market."
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- Joanne Loftus