Cooling trend for housing prices continues
Washington DC – According to the National Association of Home Builders, higher costs, longer construction times and higher home prices have constantly frustrated buyers, renters and builders. However, recent reports have seen an uptick in various housing data.
The NAHB/Wells Fargo Housing Market Index measure of single-family sentiment rose four points to 80 in October, its highest level since July. And new home sales rose 14% in September to 800,000 year-on-year, although median prices are nearly 19% higher than a year ago. Existing home sales rose to an eight-month high, while stock remains at a very low supply of 2.4 months.
According to NAHB, housing starts contradicted these increases, with total starts declining slightly due to a 5% drop for multi-family starts of five-plus units. Single-family start-ups equaled 1.08 million year-on-year. While demand remains strong, higher prices have cooled potential buyers’ intent to buy a home.
Meanwhile, higher home values have boosted household equity and wealth, which the company says is largely supportive of the home improvement industry. Innovator confidence is near all-time highs, as shown by the NAHB/Royal Building Products Remodeling Market Index, which remained at 87 in the third quarter.
Supply chain issues continue to plague the economy, and NAHB predicts these challenges will continue through 2022. The prices of housing materials have so far increased by 11% in 2021 and 14% higher than a year ago. Wood prices – although down 62% from their May peak – are again on the rise, with builders reporting long delays and higher costs of a wide range of other construction products.
These problems are compounded: According to a recent NAHB survey dating back to 1997, lottery supplies are as tight as ever.