In many markets, finding a home can be as difficult as hunting down a four-leaf clover, and the lack of available homes has been driving up the prices of those that are on the market. If you have clients who are looking for a newly constructed home of their very own, there may be a silver lining.
According to a residential sales report released jointly by the U.S. Census Bureau and U.S. Department of Housing and Urban Development, building permits, the best indicator of how many newly built homes will rise over the next few months, increased in August, according to the seasonally adjusted numbers.
The report also found that builders were issued 5.7 percent more permits from July to August and 8.3 percent more than August 2016.
Whether enough homes will enter the market to make a difference in pricing trends remains to be seen.
“It’s the lack of inventory that’s pushing up prices,” Lawrence Yun, NAR’s chief economist, said in a recent statement. “Consumers are feeling their budgets are being constrained because of housing costs.”
At the same time, “whatever is showing up is being snatched up quickly” by buyers, Yun said.
And despite the brief ray of sunshine, there still are storm clouds brewing over the real estate landscape.
U.S. homebuilders are feeling less optimistic about their sales prospects, reflecting concerns that rebuilding efforts following hurricanes Harvey and Irma will drive up costs for construction labor and materials.
According to the National Association of Home Builders, the NAHB/Wells Fargo builder sentiment index released slipped to 64 in September, down three points from a downwardly revised reading of 67 in August.
Sales of new U.S. homes are running ahead of last year’s pace, reflecting strong demand for homes as the economy has continued to create jobs. Still, sales posted their biggest one-month drop in nearly a year in July, sliding 9.4 percent to a seasonally adjusted annual rate of 571,000.