Last week, the National Association of Home Builders (NAHB) reported their Housing Market Index (HMI) hit an all-time high in the 35-year history of the series with a score of 83. The index gauges builder perceptions of current single-family home sales and sale expectations for the next six months, as well as the traffic of prospective buyers of new homes.
As the following chart shows, confidence dropped dramatically when stay-in-place orders were originally mandated earlier this year. Since then, it has soared back.Looking at the three-month moving averages for HMI scores, confidence increased in every region of the country:
- The Northeast increased 11 points to 76
- The Midwest jumped 9 points to 72
- The South rose 8 points to 79
- The West increased 7 points to 85
Confidence Is Validated by the Numbers
This confidence is definitely warranted. According to a recent NAHB report, single-family housing starts increased 4.1% to a 1.02 million annual rate, and single-family permits increased 6% to a 1.04 million unit rate, meaning newly constructed homes are on the rise.
A separate report from the Mortgage Bankers Association (MBA) shows mortgage applications for new home purchases increased by 33.3% compared to a year ago. Joel Kan, Associate Vice President of Economic and Industry Forecasting at MBA, commented on the numbers:
“The housing market continued to exceed expectations in August, as housing demand for new homes stayed strong and the job market continued to recover…The new home market has maintained its path of recovery throughout the summer, and record-low mortgage rates and households seeking more space will likely continue to drive demand into the fall.”
If you’re thinking about putting your house on the market but are afraid you may not find a home to buy, let’s connect to discuss new construction opportunities in our area.
Moving Forward Together
We’re in uncharted territory with Covid-19. The medical facts about the virus change daily. Meanwhile, the media generates a constant stream of fear inducing headlines. This combination can be overwhelming. To stay grounded during these uncertain times, it serves us well to recall a line delivered by F.D.R during his inauguration speech in 1933 – “the only thing we have to fear is fear itself.” This phrase, at the height of the great depression, gave people hope and a new way to look at a world wide depression that had been going on for three years. Ultimately, this phrase served as one of the pillars that led to the rebuilding of the economy.
Our mission is to provide you with accurate timely information about the real estate market. We follow the best minds in the real estate and share that information with you as it becomes available. Armed with actionable information, you can set aside fear and actively plan for your future. To that end, we’re here for you. Let’s get together for an online meeting to review the market and how it relates to your situation. To be clear this isn’t a sales call — this is one of the ways that our team gives back in these challenging times. To schedule a chat, click the Let’s Talk link and schedule a time that works for you: Let’s Talk.
Like you, we’re counting the days till life returns to normal and we can once again go to Powell’s Books, our favorite restaurants, the beach, the mountains, and all the activities that make Portland an incredible place to live. In the meantime, we’re here for you … stay safe out there … James Bradley