Rising Lumber, Building Material Costs Press on New-Home Prices – According to the U.S. Department of Housing and Urban Development and U.S. Census Bureau recent report, new-home sales tapered off at the end of 2020 as higher home prices offset some of the strong buyer demand seen earlier in the year. While sales of newly built single-family homes increased 1.6% in December, sales had been much stronger over recent months. New-home sales in 2020 posted an 18.8% increase over 2019. “While the market remains solid, median home prices are increasing due to higher building material costs, most notably softwood lumber, and a shift to larger homes,” says Robert Dietz, chief economist of the National Association of Home Builders. The median sales price was $355,900 in December. In December 2019, the median new home sales price was $329,500. “Looking forward, builders are concerned that increased regulatory burdens in 2021 could hurt housing affordability,” says Chuck Fowke, chairman of the NAHB. The inventory of new homes remains low at a 4.3-month supply, nearly 19% lower than a year ago.
Source and link to the full article: National Association of Home Builders
Contract Signings Surge to Highest Rate Ever in December – Based on the National Association of REALTORS®’ Pending Home Sales Index, pending home sales reached a record high for December last month as the unseasonable housing surge continued in markets across the country during the COVID-19 pandemic. Pending sales were up 21.4% year over year in December. All major regions of the U.S. recorded double-digit increases annually. However, the index, a forward-looking indicator of home sales based on contract signings, did drop slightly, by three-tenths of a percentage point in December compared to November. December’s index reading was 125.5. The slight month-over-month decline was blamed on fewer contract signings in the Midwest, NAR said. In other regions, contract signings saw an uptick or stayed flat in December. Housing shortages continue to press on the housing market. “Pending home sales contracts have dipped during recent months, but I would attribute that to having too few homes for sale,” said Lawrence Yun, NAR’s chief economist. “There is a high demand for housing and a great number of would-be buyers, and therefore sales should rise with more new listings. This elevated demand without a significant boost in supply has caused home prices to increase and we can expect further upward pressure on prices for the foreseeable future.”
Source and link to the full article: National Association of REALTORS®’ Pending Home Sales Index
A Growing Buying Segment May Offer You a New Niche – According to a recent survey by Fannie Mae, it showed a slight decline in overall homebuying confidence among the American population, but among veterans, that confidence is growing. Indeed, 58% of veterans say they plan to buy a home within the next five years, according to the 2021 Veteran Homebuyer Report, produced by Veterans United Home Loans based on a survey of about 1,000 veterans. That could amount to 11.3 million potential veteran buyers, the report notes. “Veterans have a deep desire to own a piece of the American dream they vowed to defend,” says Chris Birk, vice president of mortgage insight at Veterans United, a lending company that works with veterans. Despite a rise in home prices, veterans feel financially ready to buy. Sixty percent of veterans surveyed believe their financial situation will improve during the year. Fifty-nine percent believe they will be able to get the home of their dreams.
Source and link to the full article: “2021 Veteran Homebuyer Report,” Veterans United Home Loans (Jan. 13, 2021)
Home Sellers in 2020 Averaged $69K in Equity – Based on new research from ATTOM Data Solutions, home seller profits are soaring as home prices set new records in the pandemic. Home sellers nationwide in 2020 saw a home-price gain of $68,843 on the average sale that is up from $48,500 two years prior. Seller profits increased in more than 90% of the housing markets tracked. Home seller equity for single-family homes and condos represented a 34.7% return on investment compared to the original purchase price, marking the highest gain since 2006, researchers note.
Source and link to the full article: ATTOM Data Solutions