Market Forecast: Housing Market Index, Housing Starts and Building Permits, Existing Home Sales
Markets are closed today in observance of the Presidents Day holiday. It’s a busy week ahead for housing news with the home builders sentiment index, housing starts and building permits, and existing home sales all scheduled for release.
The National Association of Home Builders’ (NAHB) housing market sentiment index is based on a survey of home builders’ perceptions on current market conditions, expectations for the next six months, and buyer foot traffic. Any reading above 50 is considered positive. After several months of trending downward, the index improved in January, up 2 points to a reading of 58. Current sales conditions improved to a level of 63, expectations for the next six months jumped to 64, and buyer foot traffic increased to 44. Builder confidence was driven by the recent mortgage rate reprieve.
Housing starts track ground broken on residential projects and building permits track permits issued. The most recent data was delayed due to the partial government shutdown.
Existing home sales, or resales, make up the majority of real estate transactions. In December, existing home sales declined 6.4% month-over-month and 10.3% year-over-year to a seasonally adjusted annual rate of 4.99 million. Available inventory also declined, it would current take 3.7 months to exhaust all available supply. On average, properties were on the market for 46 days, up slightly from November’s figure of 42 days.
The biggest challenge home buyers are facing is finding available homes for sale. Buyers looking to make real estate moves this Spring, may want to get started early, before the market gets crowded. Mortgage preapproval is essential to staying competitive in a busy market. Sellers will know you’re serious when you make an offer, and that you’ve already started the mortgage financing process, making you a more attractive buyer.
Sources: Econoday, MarketWatch, MarketWatch, MarketWatch, Mortgage News Daily