Morning Briefing: New home sales rise to highest since 2007

by Steve Randall24 Aug 2016
New home sales rise to highest since 2007
Sales of newly-built single-family homes rose to the highest level since 2007 in July.

Data from the HUD and US Census Bureau shows a seasonally-adjusted annual rate of 654,000 units, a 12.4 per cent rise in the month from a downwardly-adjusted June figure.

“July’s positive report shows there is a need for new single-family homes, buoyed by increased household formation, job gains and attractive mortgage rates,” said NAHB Chief Economist Robert Dietz. “This uptick in demand should translate into increased housing production throughout 2016 and into next year.”   

The Northeast drove the sales increase with a 40 per cent rise; the South rose 18.1 per cent; the Midwest was up 1.2 per cent; there was no change in the West.

Inventory of new homes was at a 4.3-month supply at current sales pace with 233,000 available in July. The median sale price was $294,600.
 
Fannie Mae reveals redesigned loan form
Fannie Mae’s single-family mortgage application form has been redesigned for the first time in more than 20 years.

The new form, created under the direction of the FHFA, has simplified terminology and now includes space for an email address, mobile phone number and military service.

"It does a great job of capturing new data that aligns with the needs of Freddie Mac, Fannie Mae, and other agencies, eliminating irrelevant underwriting data fields, and displaying information in an easier-to-read format," said Samuel E. Oliver III, Vice President of Single Family Business Transformation Management at Freddie Mac.

Lenders may begin using the redesigned URLA on Jan. 1, 2018, for single-family loans submitted to Freddie Mac and Fannie Mae as well as mortgages that are federally insured by the Federal Housing Administration (FHA), the Veterans Administration (VA), or the U.S. Department of Agriculture's Rural Housing Service (RHS).
 
Iowa, Virginia report slowing sales
A slower pace of sales but increasing prices has been reported by real estate agents in Iowa and Virginia for July.

In Iowa, there were 4,365 sales in the month, down 9 per cent year-over-year although year-to-date sales are up 2.3 per cent; prices increased by 2 per cent to a median price of 152,500.
"In many areas of Iowa the market favors sellers in terms of inventory; however, buyers still experience very low mortgage rates. Combine that with the fact that historically, Iowa home prices neither rise nor fall dramatically and you have a win-win for both parties on a home sale and purchase." stated IAR President Ken Clark. 

Meanwhile in Virginia, there were 11,265 sales, down 4.7 per cent year-over-year; median sales price was 1.1 per cent higher than a year ago at $278,000.

“Virginia’s residential market showed consistent performance in July,” stated 2016 VAR President Bill White. “Though buyer activity typically begins to recede after the June crest, we are still buoyed by strong median price and relatively quick turnaround from list to close. Sellers are still poised to capitalize on inventory constraints and buyers still have access to historically low interest rates.”
 

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