Provided By Realty Times
The sales rate of newly built, single-family homes was on the rise during the month of July: this is welcome news to builders all across the nation.
According to the latest figures from HUD and the U.S. Census Bureau, sales of newly built homes rose by 3.6 percent for the month to a seasonally adjusted annual rate of 372,000 units.
"Sales of new homes in July returned to the same solid pace they set in May, which was the fastest sales rate we'd seen in more than two years," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "This is further evidence that consumers are becoming more confident in local housing markets as they look to take advantage of today's very favorable prices and interest rates."
Noting that the three-month moving average of new-home sales has been edging up consistently since last September, NAHB Chief Economist David Crowe said, "Today's good report is the latest indicator of a gradual, upward trend that we expect to continue through the remainder of this year." However, he added that "The fact that the inventory of new homes for sale reached an all-time low in July is a worrisome signal that ongoing, unnecessarily tight credit conditions are keeping builders from being able to replenish supplies as consumer demand improves."
Will this trend continue into our current month? The Mortgage Bankers Association (MBAA) reports that this week mortgage applications declined by 7.4 percent. Refinance activity also decreased by 9 percent. This is the lowest level since July.
Mortgage Refinancing now makes up 80.0 percent of total applications, down just slightly -- one percentage point -- from the week prior.
Affordability remains a hot topic in today's market. While affordability rates remain near record lows, will they remain so? And what about the low-income portion of the population?
A new report from HUD indicates that since its inception, the nation's low-income housing Tax Credit Program has helped produce more than 2.2 million affordable apartments. Now that the initial 15-year required "affordability period" has passed, the vast majority of theses LIHTC properties remain affordable for working families.
The HUD-commissioned report cautions, however, that this could all change as state and local use restrictions expire. Over a million units could become market-rate properties out of the reach of low-income households.
"This report is a wakeup call to all of us interested in preserving our nation's affordable housing," said HUD Secretary Shaun Donovan. "As LIHTC properties age, especially in high-cost areas with escalating market demand, State Housing Finance Agencies must do everything they can to protect the opportunities for working families to live in neighborhoods they might otherwise not be able to afford."
The study's authors suggest that Housing Finance Agencies should place the highest priority on the developments that are most likely to be repositioned in the market -- as higher-rent housing or conversion to homeownership or another use.
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