THE HOUSING MARKET

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Re: THE HOUSING MARKET

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REUTERS

"U.S. home sales fall, house price inflation cooling"


By Lucia Mutikani

September 22, 2021

Summary

* Existing home sales fall 2.0% in August

* Housing inventory declines 13.4% from a year ago

* Median house price increases 14.9% from a year ago


WASHINGTON, Sept 22 (Reuters) - U.S. home sales fell in August as supply remained tight, but there are signs the surge in house prices and the COVID-19 pandemic-fueled demand have probably run their course.

Still, prices remain high enough to keep some potential buyers from a hot housing market.

The report from the National Association of Realtors on Wednesday showed the smallest share of first-time homebuyers in more than 2-1/2 years and houses continuing to be snapped up typically after only 17 days on the market.

"The recent moderation in existing home sales reflects some easing of the buying frenzy that carried over into early 2021," said Mark Vitner, a senior economist at Wells Fargo in Charlotte North Carolina.

"The frantic race for space sent prices soaring."


"We continue to expect the housing market to move back into balance over the next couple of years."

Existing home sales dropped 2.0% to a seasonally adjusted annual rate of 5.88 million units last month.

Sales fell in all four regions, with the densely populated South posting a 3.0% decline.


Economists polled by Reuters had forecast sales would decline to a rate of 5.89 million units in August.

Single-family sales fell 1.9%, while condo/co-op sales dropping 2.8%.

The decrease in sales coincided with a recent change in consumer attitudes towards buying a home.


Home resales, which account for the bulk of U.S. home sales, fell 1.5% on a year-on-year basis.

The annual comparison was distorted by the pandemic-driven surge in sales in August 2020.

Sales are up 16% so far this year compared to the same period in 2020 and remain well above their pre-pandemic level.

The housing market boomed early in the coronavirus pandemic amid an exodus from cities as people worked from home and took classes online, which fueled demand for bigger homes in the suburbs and other low-density areas.

The surge, which was skewed towards the single-family housing market segment, far outpaced supply.

Expensive building materials as well as land and labor shortages have made it harder for builders to boost production.

At the same time, some homeowners are reluctant to sell because of concerns they might not find something affordable, keeping inventory tight.

Government data on Tuesday showed single-family homebuilding fell for a second straight month in August.

Though the pandemic tailwind is fading, demand for housing remains strong thanks to near record low mortgage rates and rising wages from a tightening labor market.

A separate report from the Mortgage Bankers Association showed a modest rise in applications for loans to purchase a home last week.

Mortgage rates could rise after the Federal Reserve on Wednesday cleared the way to reduce its monthly bond purchases "soon" and signaled interest rate increases may follow more quickly than expected.

Stocks on Wall Street were trading higher, recouping some of the recent losses as concerns over a default by Chinese property developer Evergrande eased.

The dollar fell against a basket of currencies.

Prices of longer-dated U.S. Treasuries rose.

TIGHT SUPPLY

The median existing house price increased 14.9% from a year ago to $356,700 in August.

That is a deceleration from a 23.6% jump in May.

The slowdown in house price inflation adds to anecdotal evidence that some sellers are reducing their asking prices.


Realtors are also noting that bidding wars are subsiding.

"We expect home price growth to slow further over the balance of this year and through 2022 as the housing inventory shortage eases and demand moderates," said Scott Anderson, chief economist at Bank of the West in San Francisco.

Sales remained concentrated in the upper price end of the market, with transactions of homes in the below-$250,000 price range continuing to experience double-digit declines.

Residential investment contracted in the second quarter after three straight quarters of double-digit growth.

August's sales decline implies lower broker commissions.

This together with the drop in housing starts suggests a further decrease in residential investment this quarter.


There were 1.29 million previously owned homes on the market last month, down 13.4% from a year ago.

At August's sales pace, it would take 2.6 months to exhaust the current inventory, down from 3.0 months a year ago.

A six-to-seven-month supply is viewed as a healthy balance between supply and demand.

In August, properties typically remained on the market for 17 days, unchanged from July, but down from 22 days a year ago.

Eighty-seven percent of the homes sold last month were on the market for less than a month.

First-time buyers accounted for 29% of sales, the lowest since January 2019 and down from 30% in July and 33% a year ago.

All-cash sales accounted for 22% of transactions, down from 23% in July and up from 18% a year ago.


"There is a suggestion here in the moderation of price gains and sales, and a declining share of first-time buyers, that a considerable portion of the stock adjustment of demand for homes to low rates and pandemic-driven population moves has taken place," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.

Reporting by Lucia Mutikani; Editing by Andrea Ricci and Paul Simao

https://www.reuters.com/world/us/us-exi ... 021-09-22/
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Re: THE HOUSING MARKET

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REUTERS

"U.S. new home sales beat expectations; supply near 13-year high"


By Lucia Mutikani

September 24, 2021

Summary

* New home sales increase 1.5% in August; July revised up

* Median sales price rises 20.1% from year ago


WASHINGTON, Sept 24 (Reuters) - Sales of new U.S. single-family homes increased for a second straight month in August, but demand for housing has probably peaked after a COVID-19 pandemic-fueled buying frenzy.

The report from the Commerce Department on Friday also showed the supply of new homes on the market last month was the largest in nearly 13 years, with prices unchanged on a monthly basis.

It followed on the heels of news on Wednesday that sales of previously owned homes fell in August.

"These data suggest that the surge in new home sales during the pandemic has ebbed and inventories of unsold homes have risen to a more normal level in relation to sales," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.

"This report and the existing home sales data for August suggest that a considerable portion of the flow adjustment of sales to higher demand may have taken place."

New home sales rose 1.5% to a seasonally adjusted annual rate of 740,000 units last month.

July's sales pace was revised up to 729,000 units from the previously reported 708,000 units.

Sales increased 6.0% in the populous South and gained 1.4% in the West.

They soared 26.1% in the Northeast, but tumbled 31.1% in the Midwest.

Economists polled by Reuters had forecast new home sales, which account for about 11.2% of U.S. home sales, increasing to a rate of 714,000 units.

Sales decreased 24.3% on a year-on-year basis in August.

They have struggled to post significant gains since surging to a rate of 993,000 units in January, which was the highest since the end of 2006.

Builders have been constrained by higher prices for inputs, as well as shortages of land and labor.


About 78% of homes sold last month were either under construction or yet to be built.

"This report continues to highlight the ongoing difficulties that homebuilders are facing as they attempt to work through their current construction backlog, due to a shortage of labor and elevated material costs and outright shortages," said Mark Palim, deputy chief economist at Fannie Mae in Washington.

Stocks on Wall Street were trading lower as worries persisted about the spillover from debt-laden China Evergrande.

The dollar slipped against a basket of currencies.

U.S. Treasury prices fell.

DEMAND LIKELY PEAKED

The coronavirus pandemic sparked an exodus from cities as Americans worked from home and took classes online.

That boosted demand for bigger homes in the suburbs and other low-density areas, which far outpaced supply, causing bidding wars.

But demand has likely peaked.

The National Association of Realtors reported on Wednesday that sales of previously owned homes fell in August, with house prices continuing to moderate sharply after posting record increases in May.

Some sellers are reducing their asking prices and consumer sentiment towards buying a home has shifted.

Demand for housing could cool after the Federal Reserve said on Wednesday it would likely begin reducing its monthly bond purchases as soon as November and signaled interest rate increases may follow more quickly than expected.

Still, the fundamentals for the housing market remain strong.

A tightening labor market is lifting wages.

The new housing market remains underpinned by an acute shortage of previously owned home.

The median new house price shot up 20.1% in August to $390,000 from a year ago.

Prices were unchanged on a monthly basis.

Last month, new home sales remained concentrated in the $200,000-$749,000 price range.

Sales in the under-$200,000 price bracket, the sought-after segment of the market, accounted for just 3% of transactions.

There were 378,000 new homes on the market in August.

That was the most since October 2008, and up from 366,000 in July.

Houses under construction made up 62.7% of the inventory, with homes yet to be built accounting for a record 27.8%.

"The need to work through these backlogs should support new home construction in the months ahead even if the pace of sales moves sideways," said Nancy Vanden Houten, a U.S. economist at Oxford Economics in New York.

At August's sales pace it would take 6.1 months to clear the supply of houses on the market, up from 6.0 months in July.

Reporting by Lucia Mutikani; Editing by Andrea Ricci

https://www.reuters.com/business/us-new ... 021-09-24/
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Re: THE HOUSING MARKET

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REUTERS

"U.S. pending home sales jump to seven-month high; mortgage applications fall"


By Lucia Mutikani

September 29, 2021

Summary

* Pending home sales increase 8.1% in August

* Contracts rise in all four regions

* Applications for home purchase loans fall last week


WASHINGTON, Sept 29 (Reuters) - Contracts to buy U.S. previously owned homes rebounded to a seven-month high in August, but higher prices as supply remains tight are slowing the housing market momentum.

Other data on Wednesday showed applications for loans to buy a house fell last week as mortgage rates increased after the Federal Reserve signaled it would likely begin reducing its monthly bond purchases as soon as November.

There are indications that supply could improve in the fall.

"Supply constraints that are boosting prices are impacting affordability and have been a headwind for buyers," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.

"Gradually easing supply constraints should be a positive, although affordability concerns could temper sales in the very near term."

The National Association of Realtors (NAR) said its Pending Home Sales Index, based on signed contracts, jumped 8.1% last month to 119.5.

That was the highest reading since January and followed two straight monthly declines.

Economists polled by Reuters had forecast contracts, which become sales after a month or two, increasing 1.4%.

Compared with a year ago, pending home sales fell 8.3% in August.

The housing market boomed early in the COVID-19 pandemic amid an exodus from cities as people worked from home and took classes online.

But the pandemic tailwind is fading as vaccines allow workers to return to offices.

Expensive homes are also sidelining some first-time buyers from the market.

The NAR reported last week that the share of first-time buyers was the smallest in more than 2-1/2 years in August.


Existing home sales dropped last month.

Data on Tuesday showed consumer sentiment towards buying a home weakening for a third straight month in September and house prices posting record gains in July from a year-ago.

Lumber prices have plummeted from record highs scaled in May, which economists and realtors hope will encourage builders to ramp-up construction of single-family homes.

The resumption of foreclosures after a pandemic moratorium is also expected to ease the inventory crunch.

But house prices are likely to remain elevated, which together with rising mortgage rates could further erode affordability.

In a separate report on Wednesday, the Mortgage Bankers Association said applications for loans to buy a home fell 1.2% last week from the prior week.


Loan purchase applications were down 12% from a year ago.

According to the MBA, mortgage rates across all loan types increased since last Wednesday's announcement by the Fed, with the benchmark 30-year fixed rate reaching its highest level since early July.

The U.S. central bank's massive monthly bond buying program to aid the economy's recovery from the pandemic has helped to keep mortgage rates low.

With U.S. Treasury yields rising in recent days, mortgage rates could creep higher, which could draw some buyers into the market in anticipation of further rises.

"We anticipate home sales will trend sideways over the remainder of 2021," said Mahir Rasheed, a U.S. economist at Oxford Economics in New York.

The surge in pending home sales last month was led by the South and Midwest regions, where the NAR said house price increases have been generally moderate relative to the rest of the country.

Contracts soared 10.4% in the Midwest and vaulted 8.6% in the densely populated South.

They rose 4.6% in the Northeast and advanced 7.2% in the West.

Reporting by Lucia Mutikani; Editing by Andrea Ricci

https://www.reuters.com/world/us/us-pen ... 021-09-29/
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Re: THE HOUSING MARKET

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CNBC

"Today’s tight housing market is already overbuilt, one analyst says"


Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK

PUBLISHED TUE, OCT 12 2021

KEY POINTS

* “There is a downward trajectory of population growth, household formation as well, that’s really going to undermine the need for what’s built,” said Dennis McGill of Zelman & Associates.

* The supply of homes for sale at the end of August totaled 1.29 million units, down 1.5% from July and down 13.4% from August 2020, according to the National Association of Realtors.


Anyone out house hunting right now knows the pickings are slim, the competition is fierce and the prices are high, but one analyst said there are actually too many houses being built.

The supply of homes for sale at the end of August totaled 1.29 million units, down 1.5% from July and down 13.4% from August 2020, according to the National Association of Realtors.

That represents a 2.6-month supply at the current sales pace, which is one of the lowest supplies on record.

A 6-month supply is considered a balanced market between buyer and seller.

One analyst, Dennis McGill, director of research at Zelman & Associates, however, said that the current supply of homes for sale is not indicative of the overall need to build more houses.

Demand is strong right now, he said, because of an unusual emotional surge driven by the pandemic.

Demographics, which are a better measure of housing demand historically, do not support more construction.

“There is a downward trajectory of population growth, household formation as well, that’s really going to undermine the need for what’s built,” said McGill.

“On the other side of that, you have the development community that’s actually very optimistic about there being a housing shortage and actually very optimistic about how much needs to be built, and they’re actually pressing the accelerator harder than we think they probably should be.”

McGill cited data from the latest Decennial Census from the U.S. Census showing household formation is about 24% below where it was in the prior four decades.

McGill’s partner Ivy Zelman, who is perhaps best known for one of the first warnings about the subprime mortgage crisis over a decade ago, agreed.

“The market is too hot."

"There is just a massive amount of capital that’s coming to the space,” Zelman said, referring to the investor interest in the housing market.

“We actually believe the industry is already overbuilding in single-family to normalized demand by roughly 20% and about 10% for multi-family, so we couldn’t be on more of an opposite side of where the market is and where the industry is, frankly.”


Homebuilders, however, seem to disagree.

Housing starts are still not where they were over a decade ago, but they are slowly crawling back, and homebuilder sentiment is high.

The stocks of the nation’s public homebuilders have also been on a tear, although that is largely due to pandemic demand.

“I have seen Ivy’s thesis, and do agree population growth is slowing, and that’s a reason why the old normal (combined single-family and multifamily construction of 1.8 million starts per year) is too high,” said Rob Dietz, chief economist with the National Association of Home Builders.

Housing soft patch

But Dietz does not agree that the industry is overbuilding.

“We need 800,000 to 900,000 single-family homes for household formation growth and another 200,000 to 300,000 per year for replacement housing and second homes,” he said.

Dietz pointed to 2018 as a more instructive year for true housing market conditions.

That was the last period of rising mortgage interest rates, and it did produce what he calls a housing soft patch.

“The challenge now is that we have the supply-side limitations, including lack of building materials and a growing shortage of skilled workers, plus higher home prices relative to incomes,” said Dietz.

If the market is actually already overbuilt, that would present even bigger problems for home prices, which are most definitely overheated.

Most expect price gains to shrink as interest rates rise, but if there is a glut of homes for sale in the next decade, prices could be in for a larger fall.

The one real wild card is the very hot single-family rental market, which is being fueled by new investor demand.

Should rental demand fall and those same investors decide to sell and cash out, supply would surely outpace demand, and the tight and pricey market we see now would flip to the opposite.

“You have homebuilders who bring supply, you now have single family-rental companies who are bringing a lot of supply, build-for-rent, and you have multifamily developers bringing supply, so all three of those pieces have seen a very big step up in optimism on the development side, and it is going to take some time for that to come to market,” said McGill.

“But it’s going to be coming pretty aggressively.”

https://www.cnbc.com/2021/10/12/-tight- ... -says.html
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Re: THE HOUSING MARKET

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CNBC

"Homebuilder sentiment bounces back despite ongoing supply chain problems"


Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK

PUBLISHED MON, OCT 18 2021

KEY POINTS

* Builder confidence in the single-family home construction market rose 4 points to 80 in October on the National Association of Home Builders/Wells Fargo Housing Market Index.

* Of the index’s three components, current sales conditions climbed 5 points to 87.

* Sales expectations in the next six months increased 3 points to 84 and buyer traffic rose 4 points to 65.


The nation’s homebuilders aren’t seeing any relief from supply chain issues that have slowed construction recently, but high buyer demand appears to be making up for it.

Builder confidence in the single-family home construction market rose 4 points to 80 in October on the National Association of Home Builders/Wells Fargo Housing Market Index.


That is still down from 85 in October 2020 and from the record high 90 in November of last year.

Anything above 50 is considered positive.

“Although demand and home sales remain strong, builders continue to grapple with ongoing supply chain disruptions and labor shortages that are delaying completion times and putting upward pressure on building material and home prices,” said NAHB Chairman Chuck Fowke, a homebuilder from Tampa, Florida, in a release.

Of the index’s three components, current sales conditions rose 5 points to 87.

Sales expectations in the next six months increased 3 points to 84 and buyer traffic climbed 4 points to 65.

The biggest concern for builders now is affordability, as they raise prices to meet the rising costs of land, labor and materials.

The median price of a newly built home sold in August was 20% higher than August of 2020, according to the U.S. Census.


While some of that is the mix of homes selling — more on the high end of the market — it also reflects builder increases.

Some builders have actually slowed home sales due to construction hurdles, as they are concerned they won’t be able to deliver houses at a normal pace.

Homebuyers are turning more and more to new construction, as the supply of existing homes for sale continues to be both incredibly lean and pricey.

“Building material price increases and bottlenecks persist and interest rates are expected to rise in coming months as the Fed begins to taper its purchase of U.S. Treasuries and mortgage-backed debt,” said Robert Dietz, chief economist at the NAHB.

A forecast just released by the Mortgage Bankers Association predicts the average rate on the 30-year fixed mortgage will hit 4% by the end of 2022, up from around 3% now.


Regionally, looking at the three-month moving averages builder sentiment in the Midwest rose 1 point to 69.

In the Northeast it was unchanged at 72.

Both the South and West were also unchanged at 80 and 83, respectively.

https://www.cnbc.com/2021/10/18/homebui ... blems.html
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Re: THE HOUSING MARKET

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REUTERS

"U.S. homebuilding stumbles as supply constraints mount"


By Lucia Mutikani

October 19, 2021

Summary

* Housing starts fall 1.6% in September; August revised down

* Single-family starts unchanged; multifamily drop 5.0%

* Building permits tumble 7.7%; single family decrease 0.9%


WASHINGTON, Oct 19 (Reuters) - U.S. homebuilding unexpectedly fell in September and permits dropped to a one-year low amid acute shortages of raw materials and labor, supporting expectations that economic growth slowed sharply in the third quarter.

The report from the Commerce Department on Tuesday also showed the gap between completed houses and those still under construction was the largest on record last month.

Robust demand as global economies emerge from the COVID-19 pandemic is running against worker shortages, straining supply chains and fanning inflation.

Nearly every industry in the United States is experiencing shortages.

"Momentum in demand still appears to be positive," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.

"But supply is struggling to catch up given higher input costs and shortages that remain headwinds for builders."

Housing starts dropped 1.6% to a seasonally adjusted annual rate of 1.555 million units last month, the lowest level since April.

Data for August was revised down to a rate of 1.580 million units from the previously reported 1.615 million units.


Economists polled by Reuters had forecast starts would rise to a rate of 1.620 million units.

Lumber prices are rising again after tumbling from record highs set in May.

Building materials, like windows and electric breaker boxes, are in short supply.


Prices for copper, another essential material in home building, have soared more than 16% since the end of September, buoyed by decades-low supplies.

The pandemic has upended labor market dynamics, leading to shortages of workers needed to produce and move raw materials and finished goods to markets.

Starts have declined from the 1.725 million unit-pace level scaled in March, which was more than a 14-1/2-year high.

Single-family starts, which account for the largest share of the housing market, were unchanged at a rate of 1.080 million units last month.

Single-family homebuilding rose in the West and Midwest, but fell in the Northeast and the densely populated South, also likely depressed by Hurricane Ida, which caused unprecedented flooding.

Starts for buildings with five units or more dropped 5.1% to a rate of 467,000 units last month.

A survey from the National Association of Home Builders on Monday showed confidence among single-family homebuilders rising further in October, but noted that "builders continue to grapple with ongoing supply chain disruptions and labor shortages that are delaying completion times."

Stocks on Wall Street were trading higher as upbeat results from Johnson & Johnson and Travelers fired up risk appetite.

The dollar fell against a basket of currencies.

U.S. Treasury prices were mixed.

COMPLETIONS LAG

Last month's decline in homebuilding followed on the heels of news on Monday that production at U.S. factories fell by the most in seven months in September.

Residential investment likely remained weak in the third quarter after contracting in the April-June quarter.

Gross domestic product growth estimates for the third quarter are mostly below a 3% annualized rate.

The economy grew at a 6.7% pace in the second quarter.

The housing market was boosted early in the coronavirus pandemic by an exodus from cities to suburbs and other low-density locations as Americans sought more spacious accommodations for home offices and online schooling, leading to three straight quarters of double-digit growth in residential spending.

That tailwind is ebbing as workers return to offices and schools reopened for in-person learning, thanks to COVID-19 vaccinations.

High inflation is also lifting mortgage rates.

The 30-year fixed mortgage rate rose to an average of 3.05% last week from 2.99% in the prior week, according to data from mortgage giant Freddie Mac.

Though still low by historical standards, rising borrowing costs could make homeownership less affordable for some first-time buyers.

House prices notched record double-digit growth on an annual basis in July.

A separate report from the Mortgage Bankers Association on Tuesday showed mortgage applications for new home purchases decreased 16.2% in September from a year ago.

Applications were down 4% on a month-on-month basis.

The average loan size hit a record $408,522, underscoring the higher construction costs.


With building costs mounting, permits for future homebuilding plunged 7.7% to a rate of 1.589 million units last month, the lowest level since September 2020.

Single-family permits fell 0.9% to a rate of 1.041 million units.

Permits for buildings with five units or more plummeted 21.0% to a rate of 498,000 units.

Housing completions dropped 4.6% to a rate of 1.240 million units, the lowest level since August 2020.

Single-family home completions were unchanged at a rate of 953,000 units.

The stock of housing under construction increased 1.3% to a rate of 1,426 million units last month, the highest since February 1974.

That led to a record wide gap between completed homes and houses under construction.

Also highlighting the supply constraints, the number of houses authorized for construction but not yet started raced to a record high last month.

"The backlog of starts – which reflects numerous supply-side constraints, including high input costs and difficulty attracting skilled workers – should underpin housing construction in the months ahead," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York.

Reporting by Lucia Mutikani; Editing by Paul Simao and Andrea Ricci

https://www.reuters.com/world/us/us-hou ... 021-10-19/
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Re: THE HOUSING MARKET

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REUTERS

"U.S. new home sales hit six-month high; median price stays above $400,000"


By Reuters Staff

OCTOBER 26, 2021

WASHINGTON (Reuters) - Sales of new U.S. single-family homes surged to a six-month high in September, but higher house price are making homeownership less affordable for some first-time buyers.

New home sales jumped 14.0% to a seasonally adjusted annual rate of 800,000 units last month, the highest level since March, the Commerce Department said on Tuesday.

August’s sales pace was revised down to 702,000 units from the previously reported 740,000 units.

Sales increased in the populous South, as well as in the West and Northeast.

They, however, fell in the Midwest.

Economists polled by Reuters had forecast new home sales, which account for more than 10% of U.S. home sales, increasing to a rate of 760,000 units.

Sales dropped 17.6% on a year-on-year basis in September.

They peaked at a rate of 993,000 units in January, which was the highest since the end of 2006.

Demand for housing surged early in the COVID-19 pandemic amid an exodus from cities to suburbs and other low-density locations as Americans sought more spacious accommodations for home offices and online schooling.

The buying frenzy has abated as workers return to offices and schools reopened for in-person learning, thanks to COVID-19 vaccinations.

The median new house price accelerated 18.7% in September to $408,800 from a year ago.

Sales continued to be concentrated in the $200,000-$749,000 price range.

Sales in the under-$200,000 price bracket, the sought-after segment of the market, accounted for only 2% of transactions.


About 74% of homes sold last month were either under construction or yet to be built.

There were 379,000 new homes on the market, unchanged from in August.

Houses under construction made up 62.5% of the inventory, with homes yet to be built accounting for about 28%.

Builders are being hamstrung by shortages of key inputs like copper and steel because of strained supply chains.

Lumber for framing remains expensive, while labor and some household appliances are also scarce.

The government reported last week that housing starts and building permits fell in September.

At September’s sales pace it would take 5.7 months to clear the supply of houses on the market, down from 6.5 months in August.

Reporting by Lucia Mutikani; Editing by Chizu Nomiyama

https://www.reuters.com/article/usa-eco ... SKBN2HG1W9
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Re: THE HOUSING MARKET

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REUTERS

"Construction spending unexpectedly falls in September"


Reuters

November 1, 2021

WASHINGTON, Nov 1 (Reuters) - U.S. construction spending unexpectedly fell in September amid declines in outlays on both private and public projects.

The Commerce Department said on Monday that construction spending dropped 0.5% after edging up 0.1% in August.

Economists polled by Reuters had forecast construction spending gaining 0.4%.

Construction spending increased 7.8% on a year-on-year basis in September.

The government reported last week that gross domestic product increased at a 2.0% annualized rate, stepping down from the April-June's robust 6.7% pace.

Spending on private construction projects decreased 0.5% in September after falling 0.3% in August.

Outlays on residential construction dropped 0.4% after nudging up 0.1% in August.

Single-family homebuilding spending declined 0.6% and outlays on multi-family housing projects slipped 0.3%.

Shortages and more expensive building materials are holding back homebuilding.

Residential investment contracted for a second straight quarter in the third quarter, weighed down by declines in home improvements and single-family homebuilding.


Investment in private non-residential construction like gas and oil well drilling fell 0.6% in September.

Spending on structures declined for a second straight quarter in the July-September period, led by commercial and healthcare structures.

Spending on public construction projects tumbled 0.7% in September after increasing 1.2% in August.

Outlays on state and local government construction projects fell 0.4%, federal government spending plunged 4.3%.

Reporting by Lucia Mutikani

https://www.reuters.com/business/constr ... 021-11-01/
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Re: THE HOUSING MARKET

Post by thelivyjr »

CNBC

"Homebuilder confidence surges past expectations, as buyer demand remains high"


Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK

PUBLISHED TUE, NOV 16 2021

KEY POINTS

* Homebuilder sentiment rose to 83 on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

* Current sales conditions rose 3 points to 89. Buyer traffic also increased 3 points to 68.

* Sales expectations in the next six months were unchanged at 84.

* Not only are builders still experiencing supply chain disruptions and a massive labor shortage, they also can’t find enough land on which to build.


Higher prices and longer wait times do not appear to be turning buyers away from the nation’s homebuilders.

With demand still surging, homebuilder confidence in the market for single-family homes rose more than expected in November, to the highest level since last May.

Confidence rose 3 points to 83 on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

Anything above 50 is considered positive.

Analyst expectations had been for it to remain unchanged at 80.

Sentiment stood at 90 in November 2020.

“The solid market for home building continued in November despite ongoing supply-side challenges,” said NAHB Chairman Chuck Fowke, a homebuilder from Tampa, Florida.

“Lack of resale inventory combined with strong consumer demand continues to boost single-family home building.”

Of the index’s three components, current sales conditions rose 3 points to 89.

Buyer traffic also increased 3 points to 68.

Sales expectations in the next six months were unchanged at 84.

While buyers are plentiful, most of the components that go into building a home are not.

That has led some builders, like the nation’s largest, DR Horton, to slow sales in order to make sure they can deliver on time.

Company Chairman, Donald Horton, noted in the company’s most recent quarterly earnings release, “We continued intentionally restricting our home sales pace by selling homes later in the construction cycle to align with our production levels and better ensure the certainty of home close dates for our homebuyers.”

Not only are builders still experiencing supply chain disruptions and a massive labor shortage, they also can’t find enough land on which to build.

“Lot availability is at multi-decade lows and the construction industry currently has more than 330,000 open positions,” said NAHB Chief Economist Robert Dietz, who called on policymakers to focus on resolving these issues.


Regionally, on a 3-month moving average for HMI scores, sentiment in both the Midwest and South rose 4 points to 72 and 84 respectively.

In the West it rose one point to 84 and in the Northeast fell two points to 70.

https://www.cnbc.com/2021/11/16/homebui ... -high.html
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Re: THE HOUSING MARKET

Post by thelivyjr »

CNBC

"U.S. housing starts unexpectedly fall in October; building permits increase"


Reuters

PUBLISHED WED, NOV 17 2021

KEY POINTS

* Housing starts slipped 0.7% to a seasonally adjusted annual rate of 1.520 million units last month, the Commerce Department said on Wednesday.

* Permits for future homebuilding increased 4.0% to a rate of 1.650 million units in October.

* Starts have declined from the 1.725 million unit-pace scaled in March, which was more than a 14-1/2-year high. Still, home building remains underpinned by a severe shortage of previously owned homes on the market, which has resulted in record house price increases.


U.S. homebuilding unexpectedly fell in October as activity remains constrained by shortages of materials as well as scarce land and labor.

Housing starts slipped 0.7% to a seasonally adjusted annual rate of 1.520 million units last month, the Commerce Department said on Wednesday.

Data for September was revised down to a rate of 1.530 million units from the previously reported 1.555 million units.

Economists polled by Reuters had forecast starts rebounding to a rate of 1.576 million units.

Permits for future homebuilding increased 4.0% to a rate of 1.650 million units in October.

Ida, which struck in late August, caused unprecedented flooding and depressed homebuilding in the Northeast and the densely populated South in September.

Aside from the weather, homebuilding has essentially been treading water as builders battle shortages and higher prices of raw materials.

Starts have declined from the 1.725 million unit-pace scaled in March, which was more than a 14-1/2-year high.

Still, home building remains underpinned by a severe shortage of previously owned homes on the market, which has resulted in record house price increases.

There is a huge backlog of houses authorized for construction but not yet started.

A survey from the National Association of Home Builders on Tuesday showed confidence among single-family homebuilders rose for the third straight month in November, but noted that “supply-side challenges, including building material bottlenecks and lot and labor shortages, remain stubbornly persistent.”

Lumber remains expensive and copper prices, another essential material in home building, are high.

In addition, there were about 333,000 job openings in the construction industry as of the end of September, and according to the NAHB, availability of land for building is at multi-decade lows.

The materials squeeze could ease during winter, a typically slow season for homebuilding in the Northeast and Midwest.

https://www.cnbc.com/2021/11/17/us-hous ... rease.html
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