News & Opinions
The latest news and insights from Hanley Wood’s outspoken experts and key thought-leaders throughout the residential and commercial design and construction industry.
Brad Hunter on June New Home Sales
Brad Hunter, chief economist / Metrostudy / July 24, 2013
Today’s New Home Sales figure confirmed that demand is staying strong in spite of higher mortgage rates. Sales of new single-family homes rose 8.3% for the month, and 38.1% compared with one year ago.
The story on higher mortgage rates is a “tale of two buyers.” The entry-level buyer has pulled back somewhat, but the move-up buyer has found a new sense of urgency to buy, to beat further increases in mortgage rates and further price hikes.
Household formation rates continue to rise, and that is fueling new home demand. Early readings of our new 2nd quarter data show positive readings all across the country, in terms both of starts and user move-ins.
In Las Vegas, starts are up 38% versus the same quarter last year, and these starts are all in response to bona-fide demand. We can see that because we are watching to make sure somebody hangs curtains and puts out a welcome mat once the house is complete. In coastal L.A., starts rose 36% versus a year ago. Inland Empire starts are up even higher than that (+41%). Our team on the ground in Atlanta reports that demand is booming (relative to recent levels), and there is strength throughout the entire sunbelt. Florida markets are up sharply as well, with a 50% gain in central Florida, and a 23% increase in homebuilding activity in southeast Florida. Tampa, with faster job growth, is up 48%. These are just a few examples, but similar strength is showing up in our numbers nationwide.