New home prices jump 15% to all-time record high
Figures from the Commerce Department this week show that the median price of a new home in the US in April rose 15% Year on Year to reach a new all-time record of $271,600.
During the recent recession, new home sales collapsed from an annual rate of 1.4 million in July 2005 all the way to just 273,000 in February 2011.
As homebuilders are once again starting to crank up production, that rate has recovered to 454,000 in April, at which time there was 4.1 months of supply.
New home sales represent 7% of the US housing market, so are less significant than existing home sales, but are important because only by building new homes can we meet the demand from new household creation.
The good news is that new home construction (both single and multi family) was running at an annual rate of 850,000 in April, while new permits topped 1 million.
The impact of strong demand and low supply can be clearly seen in this chart from Haver Analytics:
Good morning, Andrew.
For your Marblehead readers I think when you include national, regional, or other generic statistics, you should always include the sidebar, a law not theory, that all real estate is local. Also, in this blog it would have been good to mention that new construction isn’t really germane to Marblehead readers, in that there are next to no buildable lots left.
I think your best blogs would / should be centered around consumer confidence information and statistics, in the various areas around the country.
Consumer confidence is the engine that drives the whole economy and housing industry. It is the reality that is, overly, the major, determining factor in all other economic statistics quoted, e.g., durable goods, luxury items, vacations, retail sales, inventory levels, …. Economists and pundits need to pontificate, and fill space, air time, and copy to create a justification of their importance and need, but, simply, it’s all about consumer confidence.
Thank you for the continued time and the effort you put into your work.
Very best, Jody