US Housing Inventory, Home Sales: 1Q and April 2018

US Housing Inventory, Home Sales: 1Q and April 2018

Sales of new homes in the US fell by 1.5 per cent over the month of April to a seasonally adjusted annual rate of 662,000. According to the report released by the Census Bureau and the Department of Housing and Urban Development Wednesday, the small monthly decline partly reflected a downward revision to the estimate of new home sales in March from 694,000 to 672,000. Alternately, the monthly decline in April was concentrated in the West region, -15,000 (-8 per cent), which represented a partial return of the strong gains in March, +24,000 (+14 per cent).

US existing-home sales, meanwhile, decreased 2.5 per cent in April to a level 1.4 per cent below a year ago, and sales have now decreased year-over-year for two consecutive months. The first-time buyer share of 33 per cent was an increase from last month, but remains down from 34 per cent a year ago. The National Association of Realtors reported Thursday that 57 per cent of homes sold last month were on the market less than a month. The April inventory increased 9.8 per cent, but remains 6.3 per cent below the level a year ago, and has decreased for 35 consecutive months on a year-over-year basis. At the current sales rate, the April unsold inventory represents a 4.0-month supply, down from a 4.2-month supply a year ago. April existing sales reached a seasonally adjusted rate of 5.46 million units, compared to 5.60 million in March. Total existing home sales include single-family homes, townhomes, condominiums and co-ops.

SOURCE: Calculated Risk

Elsewhere, the number of single-family homes built-for-rent in the US increased over the last four quarters. During this time period, construction starts of this type of housing totalled 37,000 homes, compared to 33,000 for the prior four quarters. There were 7,000 single-family built-for-rent starts for 1Q 2018.

According to data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design and NAHB analysis released Tuesday, the market share of single-family homes built-for-rent, as measured on a one-year moving average, stood at 4.3 per cent of single-family starts as of the first quarter of 2018.

US Home Sales, House Prices

SOURCE: Calculated Risk

The latest data shows the ongoing recovery of new US home sales since its recession-related depths reflects an expansion in sales of new homes priced above US$200,000. In contrast, prices of new homes below this threshold continue to fall. In the most recent release, sales of new homes priced under US$200,000 were flat on a not seasonally adjusted basis. The downward trend in sales of new homes below US$200,000 began prior to the housing bust.

US existing home sales April median sales price was US$257,900, up 5.3 per cent from a year ago, representing the 74th consecutive month of year-over-year increases. The April median condominium/co-op price of US$242,500 was up 3.4 per cent from a year ago.

Other data out from the US this week illustrates that new single-family home size increased at start of 2018. New home size had been falling over the last two years due to an incremental move to additional entry-level home construction. According to 1Q 2018 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis released Monday, median single-family square floor area increased to 2,436 square feet. Average (mean) square footage for new single-family homes increased to 2,641 square feet.

source: NAHB Eye on Housing

Meanwhile, confidence in the Multifamily Market remained firm in 1Q 2018 with a Multifamily Production Index (MPI) of 53, according to the National Association of Home Builders Thursday. The MPI measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100. The index and all of its components are scaled so that a number above 50 indicates that more respondents report conditions are improving than report conditions are getting worse.

The MPI is a weighted average comprised of three key elements of the multifamily market: construction of low-rent units, market-rate rental units, and for-sale units (condominiums). In the first quarter of 2018, the low-rent units component dipped two points to 54, while the market rate rental units component increased two points to 56, and the for-sale units component remained unchanged at 49.

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