01/19/2018
A Fall to Remember
Home sales and new construction data came in strong in November, but low inventory remained a challenge.
Housing Starts jumped in November, the Commerce Department reported, rising 3.3 percent from October to an annual rate of 1.297 million units. Year over year, Housing Starts were up nearly 13 percent. Single-family starts, the biggest share of the housing market, surged 5.3 percent from October to the highest level since September 2007. Single-family starts also were up 13 percent annually. Building Permits, a sign of future construction, fell 1.4 percent from October but were still above expectations.
Home builders were feeling confident about housing market conditions. The December National Association of Home Builders (NAHB) Housing Market Index jumped five points from November to 74, above the 70 expected. This was an 18-year high!
Meanwhile, Existing Home Sales surged to an 11-year high in November, thanks in part to faster economic growth, record high Stock markets and a strong labor market. The National Association of REALTORS® reported that Existing Home Sales reached an annual rate of 5.81 million units, with three of the four major regions of the country producing gains. Total inventory for sale, however, slumped nearly 10 percent from last year to just a 3.4-month supply. A normal inventory level is considered a 6-month supply.
New Home Sales also soared in November. The Commerce Department reported that New Home Sales rose 17.5 percent from October to an annual rate of 733,000 units, a 10-year high. That was the biggest monthly gain since January 1992. Sales also were up nearly a whopping 27 percent from November 2016. As with existing homes, inventories of new homes for sale remained on the low end with just a 4.6-month supply.
GDP Solid, Rates Remain Low
Economic growth remained solid in the third quarter of 2017, spurred on by robust business spending that was well above weak levels experienced at the beginning of 2017. The final read on third quarter Gross Domestic Product rose 3.2 percent, just above the 3.1 percent from second quarter.
On the rate front, while tax reform and other headlines caused Stocks to hit record highs recently, home loan rates remain near historically low levels.
Stay tuned for your next quarterly update coming your way in April.