Industry News
Existing-home sales were sharply lower in July following expiration of the home buyer tax credit but home prices continued to gain. Given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.
To get a clearer picture of how current economic conditions are impacting builders, the Strategic Alliance, a group of real estate-related companies, conducted a business survey that covered more than 1,000 builders and developers and other industry professionals in the Tri-State and Mid-Atlantic regions. While most builders hoped that conditions would trend up quicker this year, there are some fundamental problems that still need to be resolved before projects can move forward.
Nationwide housing starts inched up 1.7 percent to a seasonally adjusted annual rate of 546,000 units in July from a downwardly revised figure in the previous month. The gain occurred entirely on the multifamily side, with single-family housing production falling 4.2 percent to 432,000 units. Builders are seeing greater hesitancy among potential home buyers who are uncertain about what's in store for the economy and jobs going forward.
The trend in firming home prices solidified in the second quarter of 2010 with more metropolitan areas showing increases from a year ago, aided by a surge in home sales driven by the home buyer tax credit. In the second quarter, 100 out of 155 metropolitan statistical areas had higher median existing single-family home prices in comparison with the second quarter of 2009, including 14 with double-digit increases.
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