US Housing Starts, Home Prices: June 2017

Residential construction in the US ended 2Q 2017 on a stronger note as ground-breaking on new homes rebounded in June to the fastest annualized pace in four months, Commerce Department data showed Wednesday.

Housing starts in June jumped 8.3 per cent to a seasonally adjusted annual rate of 1.22 million units, the highest level since February, as both single-family and multi-family construction rebounded after a recent slump.

US Home Sales: June 2017

US existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 5.59 million in June, down 0.5 per cent from May’s preliminary pace and up 2 per cent from last May’s seasonally adjusted pace, wrote Bill McBride at Calculated Risk Thursday. On the inventory front, local realtor/ MLS data suggest that there was a smaller YOY decline in the number of homes for sale in June compared to May, and McBride projects that the NAR’s estimate of the number of existing homes for sale in June will be 1.97 million, up 0.5 per cent from May’s preliminary estimate and down 6.6 per cent from last May’s estimate. Finally, McBride projects that the NAR’s estimate of the median existing single-family home sales price in June will be up 6.1 per cent from last June.

McBride notes that the NAR is scheduled to release existing home sales for June on Monday, July 24th. The consensus forecast is for sales of 5.62 million.

As well, foreign home buyers scooped up a record number of residential properties in the United States in the last year, despite a rising dollar and political uncertainty, according to an NAR survey released Tuesday.

The National Association of Realtors said foreigners bought 284,455 properties in the 12 months that ended March 31, about a third more than a year earlier. Dollar volume surged nearly 50 per cent to US$153 billion, also a record for the survey first taken in 2009.

The majority of properties purchased, 64 per cent, were single-family houses, followed by condos, town homes, other miscellaneous properties and other residential land.

The median price of homes purchased by foreign buyers was US$302,290, compared with US$235,792 for all homes sales. The difference is in part because foreign buyers tend to purchase in large, pricey metropolitan areas.

The median value of all homes in the United States in June surpassed US$200,000, up 7 per cent from a year ago, said Zillow, a real estate listing company, Thursday.

In 1940, the median home value in the US was just US$2,938. In 1980, it was US$47,200, and by 2000, it had risen to US$119,600. Even adjusted for inflation, the median home price in 1940 would only have been US$30,600 in 2000 dollars, according to data from the US Census.

During the height of the housing bubble more than a decade ago, the median US home value peaked at US$196,600 but never surpassed the US$200,000 threshold.

High buyer demand coupled with fewer homes for sale is driving up home values across the country — there are 11 per cent fewer homes on the market than a year ago, the greatest drop in inventory since July 2013. National home values have been rising at more than 7 per cent annually for the past ve months, with many markets consistently rising in the double-digits.

Median rent across the nation has been holding steady at about a 1 per cent annual gain for the past six months — the median rent across the country is now US$1,422 per month, up just over 1 per cent annually.

Elsewhere, US home prices increased by 6.6 per cent year over year on a national level in May 2017, and are expected to increase by 5.3 per cent between May 2017 and May 2018, according to the latest CoreLogic Home Price Index (HPI) report released July 12.