Home sales dropped 9.2 per cent in January
There was a sharp fall in sales of newly-built single-family homes in January. The 9.2 per cent drop took sales to a seasonally-adjusted rate of 494,000 units according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
However, the National Association of Home Builders says that the dip follows a stronger-than-usual December and the underlying trend is positive: “After an unusually high December reading, some pullback is to be expected,” said NAHB chairman Ed Brady, “On the positive side, builders are adding inventory in anticipation of future business.”
The inventory of new homes for sale rose to 238,000 in January, which is a 5.8-month supply at the current sales pace and the highest level since October 2009.
Housing market steady says Freddie
The US housing market is continuing to improve according to the latest assessment from Freddie Mac. Its Multi-Indicator Market Index increased 0.51 per cent in December compared to a month earlier to reach 82.7. Thye MiMi value has increased by 7.65 per cent year-over-year.
Freddie’s deputy chief economist Ken Liefer commented: "At the start of 2015, MiMi showed the national housing market in a weak position, but by the end of the year it posted a reading of 82.7, which is just inside the stable range of housing activity. This is good news for the nation's housing market but there is certainly more work to be done. One encouraging sign is that not only are purchase applications solidly up, but borrowers being current on their mortgage strongly improved in 2015 as well.”
Thirty-five of the states and DC were deemed as “stable” markets; up from 20 markets a year earlier. The top 5 were DC, North Dakota, Hawaii, Montana and Utah. The most improved month-over-month were Oregon, New Jersey, Arizona, Florida and Missouri.
Investors bullish on US real estate
A survey of real estate investors has found that 91 per cent are expecting the fundamentals of the US market to be the same or better by the end of 2016. The KPMG poll reveals that the longer-term outlook is ‘risky’ and investors are taking steps to limit their exposure to any downturn. Almost three-quarters of respondents believe that foreign investors will increase their stakes in US real estate as low interest rates and other incentives make American property even more appealing.