Link Here US Departments of Commerce and Housing and Urban Development reported new homes sales up 8.3% in June over the May revised figure. New home sales were at 497,000 on an annual basis, the highest rate in five years. Sales were up in three of the four regions; the 12% drop in the Midwest was an adjustment to a much higher than trend rate in May but still higher than months prior to May.
The inventory of new homes for sale rose slightly but the months’ supply (the time it would take to sell the remaining inventory at current sales pace) dropped to 3.9. The months’ supply level ties January 2013 for the lowest level since March 2004. The number of completed new homes for sale remains at the lowest level (36,000) ever recorded in the 40 years of data. Builders have been struggling to resupply inventory as they battle increases in costs and reduction in supply of all their inputs: labor, land, building materials and capital.
As the industry gears back from 70 year lows, all of the infrastructure needed to build homes must be rebuilt. Building suppliers are rehiring staff and re-opening or building plants; workers are being enticed back into the industry or trained in schools or Job Corps programs; developers are buying land and seeking zoning and building permissions; and builders are seeking loans from banks and other sources of capital to invest in the inventory needed to supply the returning demand.
In partial reflection of the rise in costs, new home prices rose 7.4% from June 2012. Over the past 11 months, the average annual increase has been 13% as builders respond to the increased demand, as existing home inventories remain low and as only the more financially able households are approved for mortgages. NAHB expects new home sales to continue to improve although not at the same pace as the most recent month.
Any expressed market opinion is my own and is not to be taken as financial advice
Must be getting hard to find all those graphs ending in 2010 these days....
If you knew what you were doing and wanted to sound a cautionary note, you'd just have to bring up the latest existing home sales numbers....
it doesnt take a genius to look at this pre GFC chart to match with the post GFC chart in the article..
not for caution, posted for context... ( it took all of 1 second in google image search to find, i wasn't picky ) ... articles like these pick and choose very carefully....
You might be right and it wouldn't be my first choice, but there's no denying a debt based monetary system gets a lot of shit done. It wasn't *that* long ago we were riding on horse and carts
APF - a place where serious people don't take themselves too seriously. There's nothing else like it.
By Ruth Mantell, MarketWatch July 22, 2013, 7:15 p.m. EDT
Despite large gains over the past year, home prices in cities across the U.S. remain below peak levels, according to data from the widely followed S&P/Case-Shiller report.
WASHINGTON (MarketWatch) — As home prices rise, so are concerns that a new housing-market bubble may be appearing, particularly in cities with double-digit annual growth rates.
Are there red flags in recent data?
“I wouldn’t say that we have bubbles today. But if prices keep rising at these rates, pretty soon you will be in bubble territory,” said Dean Baker, co-director of the Center for Economic and Policy Research, a Washington think tank. “Generally, you don’t see situations with rapidly rising prices and they just stop.”
Before the bubble burst, year-over-year price growth reached above 17%. The current rebound has yet to reach such a frenzied pace, though home prices recently posted year-over-year growth of 12%, the fastest rate since 2006, according to the Case-Shiller index that tracks 20 cities.
Many of the cities with the largest price gains are where housing crashed hardest when the bubble burst. For example, Las Vegas home prices recently posted year-over-year growth of 22%, but (as seen in the chart) remain more than 50% below a 2006 peak, according to the most recent S&P/Case-Shiller report. Prices in both Phoenix and Miami also more than 40% below local peak levels in those cities, despite recent jumps higher. Read about the latest data on home sales.
“What’s important to keep in context is that those double-digit gains are off of very low prices. Even with those gains prices are still relatively low,” said Frank Nothaft, chief economist at federally controlled mortgage buyer Freddie Mac (OBB:FMCC) .
Tight inventory, pent-up demand and investors have supported price gains. Despite those gains, prices are 26% below peak levels, according to Case-Shiller’s 20-city composite index. Take San Francisco, for example, where inventory is lean and competition is fierce between would-be buyers. Among the 20 cities tracked by the Case-Shiller index, San Francisco recently posted the fastest year-over-year growth, hitting just under 24%. Yet even there prices are 26% below peak.
Chart Of The Day: New Homes Suffer Biggest Two-Month Price Drop Since Lehman, Second Highest Ever
And a return to Bubble securitization techniques.
Quote:
Easing of Mortgage Curb Weighed Concerned that tougher mortgage rules could hamper the housing recovery, regulators are preparing to relax a key plank of the rules proposed after the financial crisis.
The watchdogs, which include the Federal Reserve and Federal Deposit Insurance Corp., want to loosen a proposed requirement that banks retain a portion of the mortgage securities they sell to investors, according to people familiar with the situation.
This increase in sales OP is showing us will amount to nothing but more pain for the poor saps who buy into it. The US economy is in a death spiral of debt now, and within a few years, Or months, they will not be able to sell enough bonds to meet their interest payments.
You might be right and it wouldn't be my first choice, but there's no denying a debt based monetary system gets a lot of shit done. It wasn't *that* long ago we were riding on horse and carts
It was actually oil that got us out of the horse and cart but you are quite right, the debt based monetary expansion of the last 60 years has allowed us to loot thousands of years worth of natural resorces and waste it all on consumer products. 95% of which are already in the world's garbage dumps. My mother owned one electric ceramic jug to boil water in and it served her for 30 years before the advent of modern throw away kettles. I have gone through a dozen in that time frame.
But who cares? As long as my family and I get off the planet before the party ends, that is all that matters.
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