Industry Update: Rising New Home Sales

Industry Update: Rising New Home Sales

Posted 08/01/2012

After a 5-year estrangement, U.S. homebuilders are becoming reacquainted with an old friend: confidence.

With new home sales on the rise throughout the West, Maracay Homes saw the opening of Savannah, a new community in Litchfield Park, Ariz., and anticipates the openings of a number of new communities in the near future.

According to information from the National Association of Home Builders, builder confidence in the market for newly constructed, single-family homes rose six points to 35 on the NAHB/Wells Fargo Housing Market Index for July. It was the largest one-month gain the index has seen in nearly a decade, and marks the highest point for the Housing Market Index (HMI) since March 2007. Builders’ renewed optimism is based on improvement in current sales conditions, future sales prospects and prospect traffic, among other factors, said Barry Rutenberg, NAHB chairman and a Gainseville, Fla., homebuilder.

Though every region in the United States posted HMI gains in July, builders in the West appeared to respond most enthusiastically to the monthly survey on which the HMI is based. The West registered a 12-point gain, to 44 on the index, followed by the Northeast, the Midwest and the South, whose totals were 36, 34 and 32, respectively.

“Combined with the upward movement we’ve seen in other key housing indicators over the past six months, this report adds to the growing acknowledgement that housing – though still in a fragile stage of recovery – is returning to its more traditional role of leading the economy out of the recession,” NAHB Chief Economist David Crowe said in a statement. “This is particularly encouraging at a time when other parts of the economy have begun to show softness, and is all the more reason that the challenges constraining housing’s recovery – namely over-tight lending conditions, poor appraisals and the flow of distressed properties onto the market – need to be resolved.”

New-home sales in the West posted modest gains of 2.1 percent in June, compared to an overall decrease of 8.4 percent nationwide from the previous month, according to figures from HUD and the U.S. Census Bureau. Meanwhile, the inventory of new homes for sale remained virtually unchanged in June at 144,000 units nationwide, which represents roughly a 5-month supply at the current sales pace.

The Phoenix real estate market has boasted particularly notable numbers as area home prices lead the nation with a 14.7 percent jump in May, followed second by Houston which saw just a 3.5 percent gain. True to trend, Maracay Homes has seen both a steady and significant rise in new home sales from recent months and certainly, year over year, especially in our Phoenix-area communities. After years of dismal news, we’re thrilled to see an uptick and look forward to the reports of the real estate rise that are surely on the horizon.