According to the US Dept. of Housing and Urban Development New Residential sales in April 2012 were at a seasonally adjusted annual rate of 343,000. This is a 9.9% increase from the April 2011 estimate and 3.3% above the March rate of 332,000.
The new house median sales price in April 2012 was $235,700 with an average sales price of $282,600. With 146,000 new houses for sale at the end of April the supply at the current sales rate is 5.1 months. Annual sales hit the second highest level in 2 years.
Although new built homes are less than 20% of the housing market this sector of the housing market has a greater impact on the economy overall by creating jobs and producing tax revenue. The 3.3% gain in April adds to the buyer’s confidence in the economy. It’s early in the year but this boost in the first quarter but the signs are predicting a continued increase in sales.
With 1 million jobs added in the past five months and unemployment dropping a full percentage point since August, from 9.1 percent to 8.1 percent in April homebuyers confidence has risen in the last six months. Builder confidence has risen with builder optimism in May being the highest level in five years.
Mortgage rates are at record lows but down payments and qualifying for a mortgage is still a struggle for buyers. And builders are competing against discounted distressed properties.
But, does it make sense for a buyer to wait out the long process of a short sale or take on the clean-up of a spoiled property that has been vacant for perhaps years when they could own a new home for virtually the same cost of buying a resale? We will explore the answer to that question and show you how that might work for a new home buyer in the next edition of “New Home Sales – A Dream Come True.”