New home sales up 5.4 per cent
Newly-built single-family homes saw an increase in sales of 5.4 per cent in July to a seasonally adjusted annual rate of 507,000 units. Data from the HUD and the US Census Bureau reveals that the Northeast saw a 23.1 per cent gain; West rose 6.7 per cent; and South was up 5.8 per cent. The Midwest registered a 6.9 per cent decline.
“Today’s report is in line with other government data and improving builder sentiment and shows a gradual but consistent housing recovery,” said NAHB Chief Economist David Crowe. “As job growth and consumer confidence continue to strengthen, the housing market should make additional gains this year.”
Here comes a decade of surging housing demand
The next ten years will see up to an additional 15.9 million households created in the US according to a forecast from the Mortgage Bankers’ Association. Even the lower end of the outlook, at 13.9 per cent, would make the decade one of the strongest in housing history. Growth in population, the stronger economy and wage rises will help drive the demand for homes.
"When it comes to starting new households, age 35 is the new 25, as younger Americans are spending a longer time in school and delaying major life events like getting married and having children," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "As Millennials age and create more housing demand, these long-term social trends will mix with demographic changes and the waning hang-over from the Great Recession with a net outcome of increased demand for housing.”
Home values slip says Zillow
Home prices slipped in July according to research from Zillow. Nationally it found that homes lost 0.1 per cent of their value to $179,900 on average. The annual pace of growth was lower too, slipping to 3 per cent from 3.4 per cent in June. However the decline was driven by less than half of the metros covered by the firm; 204 saw a slowdown from 517 surveyed; but this included some major markets such as Washington DC, Cincinnati, Denver, Dallas and San Francisco.
But it’s not a cause for panic, just a return to normal according to Zillow chief economist Svenja Gudell. "This is not like the bubble bust. We're not going to see 10 per cent declines. The market is leveling off, and it's good news, particularly for buyers, because it will ease some of the competitive pressure."
Meanwhile, rents continue to grow at a rapid pace, up 4.2 per cent from last July to an average $1,376.