New-Home Sales Rise to Fastest Pace Since 2008.

New-Home Sales Rise to Fastest Pace Since 2008. Image courtesy of phanlop88 / FreeDigitalPhotos.net

For the third consecutive month, sales of new single-family homes posted gains, rising 2.1 percent in May, according to housing data released Tuesday by HUD and the U.S. Census Bureau.

“Builders are reporting increased demand for new homes as buyers seek to take advantage of historically low mortgage rates while they remain so favorable,” says Rick Judson, National Association of Home Builders chairman. “Consumers in markets nationwide are definitely becoming more confident about making a home purchase as firming prices and tighter inventories provide further evidence of the ongoing housing recovery.”

New-homes sales moved to the fastest sales pace in May since July of 2008. Inventories also rose in May, reaching a 4.1-month supply at the current sales pace.

Regionally, sales posted double-digit increases in May by 40.7 percent in the Midwest and a 20.7 percent increase in the Northeast. In the West, new-home sales rose 3.6 percent while posting a 9 percent decrease in the South.

Source: National Association of Home Builders

Fastest-Growing Suburbs for home sales.

Fastest-Growing Suburbs for home sales. Image courtesy of photostock / FreeDigitalPhotos.net

Not everyone is moving to the city. Suburbs remain popular among home buyers.

Coldwell Banker recently released its list of the top booming American suburbs. The brokerage evaluated 1,500 suburbs to find the ones that offered the most employment growth, community safety, proximity to good schools, best commute times, and nearby access to stores.

The following suburbs made its list:

1. Cottage Lake, Wash.
2. Prairieville, La.
3. Fruit Cove, Fla.
4. Sammamish, Wash.
5. Mercer Island, Wash.
6. Riverton, Utah
7. Brentwood, Tenn.
8. Lehi, Utah
9. Cooper City, Fla.
10. Maple Valley, Wash.

Source: “10 Fastest-Growing Suburbs in America,” Business Insider (June 25, 2013)

Good News for High-End Home Buyers?

Good News for High-End Home Buyers? Image courtesy of marin / FreeDigitalPhotos.net

Jumbo loans are reportedly becoming easier to obtain, which may be welcome news for high-end home buyers.

Jumbo loans are mortgages larger than $417,000 in most parts of the nation and $625,000 in high-cost areas.

In the first quarter of 2013, lenders originated $54 billion in jumbo loans, up from $47 billion one year earlier, according to Inside Mortgage Finance.

Many jumbo lenders also reportedly are increasing the amount of a home’s value they will agree to finance.

“The pickup in jumbo lending comes as home prices are rising and banks are looking to build closer ties with affluent clients and put more loans on their balance sheets,” The Wall Street Journal reports.

J.P. Morgan Chase originated $5.6 billion in jumbo loans in the first quarter, which is 67 percent more than a year ago.

“Housing prices are going up, consumer confidence is growing, and the affluent segment is in better shape,” says Kevin Watters, chief executive of mortgage banking at JP Morgan Chase.

Bank of America has increased its jumbo loan origination by 37 percent in the first five months of 2013.

Source: “High-End Home Loans Stage a Comeback,” The Wall Street Journal (June 21, 2013)

Building Material Shortages Raise Concern.

Building Material Shortages Raise Concern. Image courtesy of Witthaya Phonsawat / FreeDigitalPhotos.net

Shortages of key building materials—such as lumber and wall board—are a major barrier to a more robust recovery for the new-home industry, says David Crowe, chief economist of the National Association of Home Builders.

Recent surveys by NAHB and the National Lumber and Building Material Dealers Association show supply constraints and price increases are keeping construction rates far below what is considered normal and necessary to meet demand, Crowe says.

Builders report that in the last six months alone there has been a 5.17 percent increase, on average, in building materials that go into a home. Lumber dealers have reported that prices of products in the last six months have risen by 10 percent or more. According to the surveys, the highest reported shortages for building materials were for oriented strand board, wall board, framing lumber, and plywood.

Still, “the shares of reported shortages are not as high now as they were in 2004 or 2005, but the increases since 2012 are quite significant, especially when you take the early stage of the housing recovery into account,” says Crowe. “In 2004 and 2005 the home building industry was producing over 1.8 million new homes a year, while the current rate of new housing starts is still below 1 million.”

Michael O’Brien, NLBMDA president and CEO, says that material shortages and price increases will “continue to be a cause for concern as we move into the latter half of 2013.”

Source: National Association of Home Builders