US Housing Market, Home Building

US Housing Market, Home Building

New data out this week from the US Commerce Department, Standard & Poors, RealtyTrac, the National Association of Realtors, and Zillow all show a steady and improving situation for US home selling, house prices, rental rates, and foreclosures.

Similarly, the recent release by the Federal Housing Finance Agency (FHFA) shows that its measure of house prices, House Price Index – Purchase Only, rose by 1.2 per cent on a quarter-over-quarter seasonally adjusted basis. This marks the 16th consecutive quarter of house price growth. Over this four-year period, house prices have risen by 23.1 per cent.
There were 45,381 US properties that were put into foreclosure for the first time in July, down 8 per cent from the previous month and 9 per cent from a year ago, the lowest since November 2005, while banks repossessed 46,957 properties in July, up 29 per cent from the previous month and 81 per cent from a year ago, hitting the highest level since January 2013.

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Single-family homes built-for-rent increased to approximately 8,000 starts for 2Q 2015, compared to about 6,000 for the same period of 2014. The share and count of built-for-rent starts are off post-recession highs and will likely approach historical norms as the housing market continues to expand. However, given the relatively small size of this market, care must be taken when tracing changes in the estimates.

US House Prices 2Q 2015

The recent release from Standard and Poor’s (S&P) and Case-Shiller indicates that their measure of national house prices, the House Price Index – National, rose by 0.3 per cent on a quarterly seasonally adjusted basis in the second quarter of 2015, according to NAHB’s Eye on Housing Wednesday. Including a .03 per cent rise in 1Q 2012, the 2Q of 2015 marks the 14th consecutive quarter-over-quarter increase in the house price index. Over this period of three-and-a-half years, the index has risen by 24.5 per cent.
According to the NAHB, the Case-Shiller National House Price Index will increase by 4.6 per cent in 2015 and by an additional 4.6 per cent in 2016. The rates of growth in 2015 and 2016 are below the growth rate in 2013, 7.5 per cent, and 2014, 5 per cent.
Meanwhile, Fannie Mae provides a forecast of the FHFA Purchase-Only Index. The Fannie Mae annual forecast represents the change in the house price index between the fourth quarter of the forecast year and the fourth quarter of the prior year. According to Fannie Mae, the FHFA Purchase-Only Index will grow by 4.5 per cent in 2015 and by another 4.5 per cent in 2016. The rates of growth expected in 2015 and 2016 are below the growth that took place in both 2013, 9.6 per cent, and 2014, 6.7 per cent.

Single Family Built-for-Rent Construction

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According to data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design and National Association  of Home Builders analysis, single-family homes built-for-rent increased to approximately 8,000 starts for 2Q 2015, compared to about 6,000 for the same period of 2014. The share and count of built-for-rent starts are off post-recession highs and will likely approach historical norms as the housing market continues to expand. However, given the relatively small size of this market, care must be taken when tracing changes in the estimates.
The current market share remains higher than the historical average of 2.8 per cent but is down from the 5.8 per cent registered at the start of 2013.

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