Newest housing data highlights improvements
The latest round of real estate data shows home-builder confidence soaring as U.S. homes become more affordable. In California, sales and prices appear to be on the mend.
In a note on Tuesday, Ian Sheperdson, chief U.S. economist for High Frequency Economics, wrote that the improvements in U.S. housing could be a result of credit loosening. The lack of ready availability of home loans has been one of the stumbling blocks to a rising market, he wrote.
“The key story here, we think, is improving access to mortgage finance, rather than the level of rates, which have been very low for a long time,” Sheperdson wrote, reacting to the rise in builder confidence. “After a credit event, availability of credit is the key to real recovery; housing is on the cusp.”
The National Assn. of Home Builders reported on Tuesday that its index of confidence in the market for newly constructed single-family homes climbed to a level of 29, the gauge’s highest reading since May 2007. The West was the only region to decline, down two points to 29. The Northeast was up six points to 32 and the Midwest and South were up five points each to hit 27 and 28, respectively.
“Builders in many markets are reporting that buyer traffic and sales have picked back up after a pause this April,” Barry Rutenberg, chairman of the builders association, said in a news release. “It seems we have resumed the gradual upward trend in confidence that started at the beginning of this year, as stabilizing prices and excellent affordability encourage more people to pursue a new-home purchase.”
A separate index produced by the National Assn. of Realtors showed that U.S. homes reached a record level of affordability in the first quarter. According to the data, the index shows a family earning the median annual income of just under $61,000 could afford a home costing $325,500.
And finally, home sales and prices appeared to improve in the Golden State, according to the California Assn. of Realtors. Sales were at their highest level in more than two years, and the statewide median price rose above $300,000 for the first time, the group said.
“A brighter economic picture, coupled with record-high housing affordability, pushed the spring home buying season off to a strong start,” LeFrancis Arnold, president of the association, said in a news release. “With a continuing improving economy and interest rates declining to new record lows in recent weeks, we should see a steady improvement in the housing market throughout the end of the year.”
The state real estate group also reported that the amount of inventory on the market remained low. About four months and just under a week’s worth of homes were available for sale on the market, according to the group’s inventory index. About six to seven months is considered a healthy market.
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