US Housing Starts Index, Home Sales: January 2016

US home building data for January showed declines for new home sales and housing construction said the National Association of Home Builders Wednesday. Builder confidence also declined but remains in positive territory. NAHB’s forecast is for continued, modest growth for single-family construction and a slowing of the growth rate for multifamily development in 2016.

The NAHB/Wells Fargo Housing Market Index measure of single-family builder sentiment declined three points in February to 58 – still well above the tipping point of 50, and three points above last February, but down from a recent peak of 65 in October 2015. Builders reported more consumer concern over the price of new homes relative to existing homes as builders face higher costs for labor, land and materials

Home Sales, US

Consumers in the US signed contracts to purchase new homes at an annual rate of 494,000 in January, said the US Census Wednesday. The monthly number is 9.2 per cent below the December level but the December report was higher than expected. The two month average is 519,000. Two regions increased and two declined with the West falling 32.1 per cent to 110,000. Similar to the national level, the two month average in the West was 132,000 which compares to the past 6 months average of 127,500.


The inventory of new homes for sale continued to increase to 238,000, the highest since October 2009. The steady increase in inventory supports builders’ expectations for continued modest increases in new sales. The month’s supply increased to 5.8 months due to the fall in sales.

The median sales price of a new home dropped 4.5 per cent to US$278,800 due to an increase in sales of homes between US$150,000 and US$199,999. Increases in relatively affordable homes is a sign that the first time buyer is finally creeping back into the home buying market.

Existing home sales, as reported by the National Association of Realtors Tuesday, increased 0.4 per cent in January to the highest level since July, and are up 11 per cent from last January. The first-time buyer share for 2015 averaged 30 per cent, up from 29 per cent in 2014 and 2013. Total existing home sales in January increased to a seasonally adjusted rate of 5.47 million units combined for single-family homes, townhomes, condominiums, and co-ops, up from a downwardly revised 5.45 million units in December.

Existing sales increased 4 per cent in the Midwest and 2.7 per cent in the Northeast while remaining flat in the South and falling 4.1 per cent in the West. Year-over-year, all regions in- creased, including 20.6 per cent in the Northeast, 18.2 per cent in the Mid- west, 8.3 per cent in the West, and 5.7 per cent in the South.

Total housing inventory increased by 3.4 per cent in January, but re- mains 2.2 per cent lower than its level a year ago. At the current sales rate, the January unsold inventory rep- resents a 4.0-month supply, compared to a 3.9-month supply in December and a 5.1-month supply in November. Some 32 per cent of homes sold in Jan- uary were on the market for less than a month, the same share as in December.

The distressed sales share in- creased to 9 per cent in January from 8 per cent in December.