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New Home Sales Climb in July08-31-15 | News

New Home Sales Climb in July
"Gradual, Consistent' Housing Recovery

A U.S. Census Bureau report for the month of July shows new home sales improved moderately on a month-to-month basis, and jumped by more than 25 percent when compared to the same month in 2014.

New home sales continued to trend upward in the month of July, surpassing the 500,000 mark for the fifth month in 2015. The results have prompted one organization to predict that the housing market's momentum will carry over through the rest of the year.

U.S. Census Bureau data show 507,000 new single-family units were sold in July, a 5.4 percent hike over June's sale of 481,000 units.

It is also 25.8 percent higher than the 403,000 homes that changed hands in the same month in 2014. More than 520,000 homes were sold in May, and 508,000 transactions were recorded in April. The 500,000 level was also eclipsed in January and February.

The July median sales price for new houses sold was $285,900, while the average sales price was $361,600, the Census Bureau reports.

"Our builders are reporting higher traffic and more serious buyers, and are adding inventory in anticipation of future business," Tom Woods, chairman of the National Association of Home Builders (NAHB), said.

"Today's report is in line with other government data and improving builder sentiment and shows a gradual but consistent housing recovery," David Crowe, chief economist for the NAHB, said. "As job growth and consumer confidence continue to strengthen, the housing market should make additional gains this year."

At the end of July, there were 218,000 new houses up for sale, or a supply of 5.2 months at the current sales rate. This is nearly 2 percent higher on a month-to-month basis, and an increase of nearly 7 percent compared to July 2014.

Regional data:
• Northeast was up 23.1 percent compared to June, and realized a nearly 40 percent increase year-to-year.
• Midwest declined 6.9 percent month-to-month, and was unchanged on an annual basis.
• South saw a 5.8 percent improvement compared to June, and a jump of nearly 30 percent year-to-year.
• West climbed 6.7 percent on a monthly basis, and realized a hike of almost 30 percent compared to July 2014.

The above stories can be read at these websites:
Census Bureau: https://tinyurl.com/8jmp5ph
NAHB: https://tinyurl.com/ov6xecq

Housing demand is predicted to skyrocket over the next 10 years, according to a recently released report from the Mortgage Bankers Association.

This trend will be driven in large part by baby boomers, those in the so-called millennial age group, and Hispanics. "Housing Demand: Demographics and the Numbers Behind the Coming Multi-Million Increase in Households" says 13.9-15.9 million new households will be formed by 2024.

This averages to 1.6 million households per year.

Economic and demographic changes will cause this jump in numbers, a spurt that could prove to be one of the strongest in U.S. history, the MBA says.

"Household formation has been depressed in recent years by a long, jobless recovery and by a lull in the growth of the working age population," Lynn Fisher, MBA's vice president of research and economics, said.

Baby boomers, Hispanics and millennials will create strong growth in both the owner and rental housing markets over the long term, the MBA said.

Most of the expansion in the housing market will come from the aging baby boomer segment. This group will add 12.3-12.9 million new households over the next 10 years.

The MBA's report says millennial households between the ages of 18-44 will increase from 4.1-5.1 million between now and 2024.

There will also be 5.5-5.7 million more Hispanic households; 3.4-5.0 million more white households; 1.8-1.9 million additional Asian households; and 2.4 million more black households.

Website link: https://tinyurl.com/p5kbft8