Is Low Resale Inventory the Reason That New Home Sales Hit an 8-Year High?
This data is not surprising seeing New Construction was at a virtual standstill during the economic downturn. What is surprising is the time of year that new home sales is taking off. Buying a new construction home is not like buying a resale property. New Construction on average is taking 6 to 8 months to complete. You can close on a resale in 40-45 days. I might have expected New Construction to spike sometime around December to February, and it may still, who knows? I know that I won’t be making any predictions. By the way, I offer a substantial reduction of your closing costs on the purchase of a brand new home. See our New Construction discount info at the bottom of this post.
Considering a move? (inventory low) (new home sales up)
A recent new home sales report for July showed that sales of newly built homes increased 12.4 percent since June, and rose 31.3 percent year-over-year. This surge marks the highest point in almost eight years.
Data released found that the new home sales seasonally adjusted annualized rate for July was 654,000, the highest pace of sales since October 2007. Actual new homes sold so far this year are up 13 percent over the first seven months of 2015. This July’s new home supply remains tight at 4.3 months of supply.
The median sales price of new houses sold in July 2016 was $294,600; the average sales price was $355,800. The seasonally adjusted estimate of new houses for sale at the end of July was 233,000. This represents a supply of 4.3 months at the current sales rate.
“It’s great to see evidence of much-needed growth and a shift toward more affordable prices in July’s report,” says realtor.com® Chief Economist Jonathan Smoke. “It’s also good news that we are finally seeing builders shifting toward more affordable price points. And given the limited number of homes currently for sale, we can be confident that the decline in new home prices is a result of market shift and not discounting by builders.”
For more information, visit www.census.gov. Reprinted with permission from RISMedia. ©2016. All rights reserved.
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