Housing market analysts do not appear moved by an April surge in pending and new home sales. New US single-family home sales recorded their biggest gain in nearly a quarter century in April, touching a more than eight-year high.
Property analysts are forecasting a steady 5.4 million unit annualized pace of existing home sales over the coming year, about where it was in April, far below its peak above 7 million in 2005, before the housing market crash and financial crisis.
The most optimistic view was for an average 6.08 million unit annualized pace in the first three months of 2017.
The share of first-time buyers crept up to 32 per cent in April from 30 per cent both in March and a year ago, according to data from the National Association of Realtors.
Investors also appear to have a fair amount of confidence in the future performance of the housing market. The Standard and Poor’s homebuilding sub-index .SPLRCHOME has risen more than 11 percent in the last three months.
Shares of the three largest U.S. homebuilders — D.R. Horton Inc (DHI.N), Lennar Corp (LEN.N) and PulteGroup Inc (PHM.N) — are up between 5 per cent and 15 per cent over the same period.
The NAHB/Wells Fargo Housing Market Index, which rose two points this month to hit the 60 lev- el, its highest reading since January 2016.
The three segments that make up the index all registered increases: The component gauging current sales conditions rose one point to 64, the index charting sales expectations in the next six months increased five points to 70, and the component measuring buyer traffic climbed three points to 47.
Also on the rise, according to RE/MAX, are housing sales. The company’s latest data analysis determined that home sales in May increased 10.3 per cent from April and were 5.1 per cent higher from a year earlier.
The median sales price in May was US$222,475, up 3.5 per cent from the previous month and up 4.2 per cent from a year earlier.
But one thing that was not on the rise was inventory. RE/MAX reported that May’s inventory was 14.8 per cent below last year’s level, while the average for days on the market for all homes sold in May was 58, down six days from the average of 64 from the previous month and one year earlier.
Dave Liniger, RE/MAX CEO and Chair, noted that a tight inventory level did not handcuff sales activity.