More Americans bought new homes in September, a sign that demand remains strong despite a shortage of properties on the market.
Recent hiring gains coupled with low interest rates have bolstered the market for new homes. But builders have largely struggled to keep pace with new construction, creating a shortage of listings for would-be buyers.
New-home sales advanced 3.1 percent last month to a seasonally adjusted annual rate of 593,000, the Commerce Department said Wednesday. The gains were concentrated in the Northeast, Midwest and South, as sales tumbled last month in the West.
So far this year, sales have increased 13 percent compared to the same period in 2015.
Sales have steadily grown from the depths of the housing bust and Great Recession over the past three years. Still, new-home sales still lag their historic pace of roughly 650,000 a year. If the sales pace for 2016 holds, sales will total roughly 566,000 at the end of this year.
The greater demand has caused narrower inventories of newly built homes. The market contains only 4.8 months' supply of new homes, down from 5.8 months a year ago.
The declining supply of new homes has modestly boosted prices, which have risen 2.7 percent to an average of $377,700.
Additional construction is unlikely to end the supply crunch. In September, housing starts fell 9 percent to a seasonally adjusted annual rate of 1.15 million.
Yet builders remain confident about their prospects. The National Association of Home Builders/Wells Fargo builder sentiment index released last week was 63 in October, down slightly from the prior month. Readings above 50 indicate more builders view sales conditions as good rather than poor.
Low mortgage rates are feeding much of this confidence. Mortgage buyer Freddie Mac said the average 30-year fixed-rate mortgage was 3.52 percent last week, down from a 52-week high of 4.01 percent.
Author:Leo Gonzalez Phone: 786-501-5518 Dated: October 27th 2016 Views: 118 About Leo: We are a team of committed Real Estate professionals serving Miami-Ft Lauderdale and the other areas...
Terrabella Realty is a boutique operation with over 1 Billion dollars of closed sales over the past 12 years, We have experience in the South Florida real estate market and we have developed strategic alliances with Real Estate Firms in foreign countries like, Argentina, Colombia, Venezuela, Mexico, Ecuador, Canada, Russia, France, England and Israel, to name a few. We have over 80 sales associates ready, willing and able to assist on the sale of your property and we are experienced enough to help you price it right.