Blog posted On November 23, 2018
Mortgage rates did not move significantly up or down this week. Markets were closed yesterday in observance of the Thanksgiving holiday, and some banks are closed or closing early today. Home builder sentiment fell in November and builders lowered their expectations for the new year. Housing starts increased but building permits declined. Existing home sales exceeded expectations.
The National Association of Home Builders’ (NAHB) housing market sentiment index declined in November, amidst a slowdown in buyer demand. The index dropped to a level of 60, the lowest reading in 2 years. Each component declined, current sales conditions dropped to 67, sales expectations for the next six months dropped to 65 and buyer foot traffic fell to 45. Some builders have also scaled back on their expectations for sales next year. NAHB chief economist, Robert Dietz, also voiced affordability concerns, “for the past several years, shortages of labor and lots along with rising regulatory costs have led to a slow recovery in single-family home construction.”
Housing starts improved 1.5% in October, up to a seasonally adjusted annual rate of 1.228 million units. Building permits fell slightly, down 0.6% in October, to a seasonally adjusted annual rate of 1.263 million units. The data is not unusual, considering new home construction tends to slow down in the colder winter months. Overall, construction has slowed down in 2018.
Existing home sales or resales increased for the first time in seven months. Resales are up 1.4% month-over-month in October to a seasonally adjusted annual rate of 5.22 million. At the current sales pace, it would take about 4.3 months to exhaust all available homes for sale.
Heading into the end of the year, housing activity tends to slow down, meaning it could be the perfect time to buy. With less buyers on the market, sellers may be more willing to negotiate with you, especially if they are on a timeline to move. If you’re planning on making real estate moves this fall, get preapproved for mortgage financing before you start shopping.