The Week in Real Estate
New construction hits a 12-year high as builder confidence grows! Single-family housing starts are reaching their highest level since late 2007! Keep reading to learn more about recent real estate news highlights:
Builder Confidence Hits 12-Year High
Builder confidence in the market for newly-built single-family homes jumped 6 points to a level of 71 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the highest rating since June 2005.
All 3 HMI components posted robust gains in March. The component gauging sales conditions increased 7 points to 78 while the index charting sales expectations in the next six months rose 5 points to 78. Meanwhile, the component measuring buyer traffic jumped 8 points to 54. Looking at the 3-month moving averages for regional HMI scores, the Midwest increased 3 points to 68 and the South rose 1 point to 68. The West dipped 3 points to 76 and the Northeast edged 1 point lower to 48.
MBA: Mortgage Applications Rise Three-Weeks Straight
Mortgage applications increased for 3 straight weeks as the market gears up for the spring home-buying season. The latest update from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending March 10th found that applications increased 3.1% from a week earlier. This is similar to the previous week’s 3.3% increase in applications.
Both refinance and purchase applications rose, helping boost overall application volume. The Refinance Index increased 4% from the previous week, while the seasonally adjusted Purchase Index increased 2% from one week earlier.
Mortgage interest rates for most products jumped close to two-year highs. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) now sits at its highest level since April 2014, growing to 4.46% from 4.36%.
Also reaching its highest level since April 2014, the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased to 4.44% from 4.27%.
Single-Family Housing Starts Reach Highest Level Since Late 2007
Nationwide housing starts rose 3% in February from an upwardly revised January reading to a seasonally adjusted annual rate of 1.288 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department.
Single-family production increased 6.5% to 872,000 units – its highest reading in nearly a decade – while multifamily starts fell 3.7% to 416,000 units.
“This month’s gain in single-family starts is consistent with rising builder confidence in the housing market. We should see single-family production continue to grow throughout the year, tempered somewhat by supply-side constraints such as access to lots and labor.”
— Granger MacDonald, chairman of the National Association of Home Builders (NAHB).
Regionally in February, combined single-family and multifamily housing production (starts) rose 35.7% in the West. Starts fell by 3.8% in the South, 4.6% in the Midwest and 9.8% in the Northeast. Regionally, overall permits rose 25.4% in the Midwest. Permits fell 10% in the West, 10.4% in the South and 22.3% in the Northeast.