Friday, May 06 2011
After three straight months of declines, sales of new homes got a boost last month, jumping 11 percent, according to the Commerce Department’s latest new-home sales report released Monday.
New-home sales rose in March to a seasonally adjusted rate of 300,000 homes, up from February’s 250,000. However, the number is still far from what economists view as a healthy 700,000-a-year pace for the sector.
The median price of a new home increased 3 percent from February to $213,800. New-home prices are about 34 percent higher than the median price of existing homes, according to economists.
Regionally, new-home sales saw the biggest boost in the Northeast, jumping nearly 67 percent in March. The West saw an increase in new-home sales last month by nearly 26 percent; the Midwest posted a 13 percent increase; and in the South, new-home sales dipped 0.6 percent.
The new-home market continues to be battered by a high number of foreclosures that continue to dampen home prices across the country. With 1.2 million foreclosures forecast this year, the new-home sales market may not see a major turnaround for years, according to RealtyTrac Inc.
However, while residential construction has decreased considerably in recent years, reports have recently shown building permits have increased 28 percent for apartment and condo buildings.
Source: “The number of people who bought new homes jumped 11 pct., but pace is far below healthy level,” Associated Press (April 25, 2011)
Thursday, August 26 2010
New home construction edged up slightly in July but applications for building permits tumbled to the lowest point in 14 months, a sign of continued stress in housing.
Construction of new homes and apartments rose 1.7 percent in July, the Commerce Department reported Tuesday. Still, applications for building permits, considered a good sign of future activity, fell 3.1 percent.
A rebound in housing is considered critical for a sustained economic recovery. But builders continue to struggle with weak demand for new homes caused by high unemployment and a glut of foreclosed homes on the market.
The July increase in housing construction pushed total activity to a seasonally adjusted annual rate of 546,000 units. Building activity in June was weaker than first reported. It fell 8.7 percent to an annual rate of 537,000 units, the slowest pace since October of last year.
Housing construction got a boost earlier in the year when the government offered buyers up to $8,000 in federal tax credits. But after the incentives expired at the end of April, sales and constructions activity slumped.
Driving the July increase was a 32.6 percent surge in construction of apartments and condominiums, which jumped to an annual rate of 114,000 units. The bigger single-family sector declined 4.2 percent, falling to an annual rate of 432,000 units.
The drop in building permits left applications for new construction at a seasonally adjusted annual rate of 565,000, the slowest pace since May 2009.
Construction activity surged 30.5 percent in the Northeast and was up 10.7 percent in the Midwest. However, construction fell 6.3 percent in the South and was flat in the West.
In advance of the report on housing starts, the National Association of Home Builders reported Monday that its monthly index of builder sentiment dropped to 13 in August. That was the lowest reading in 17 months. Readings below 50 indicate negative sentiment about the housing market.
The last time builders' index was above 50 was in April 2006.
Builders say consumers remain worried about the weak economic recovery and the sluggish jobs market. Among those who are buying, many are opting for deeply discounted foreclosed properties.