June New Home Sales Up 12% Year Over Year 

 In Market Reports

June New Home Sales Up 12% Year Over Year.

June new home sales rose 12% year over year, with a 9% higher average sales rate and 3% more communities.

It’s estimated this month’s builder survey represents 16% of new home sales annually.

Information provided by the Burns Housing Survey from the Front Lines Report (full report available for download below.)

 

The national new home market is running flat, with:

  • Sales up 12% YOY, including 3% community count growth, but mostly because last June had weak sales
  • Stable traffic in most markets despite the decline in mortgage rates
  • Low cancellations and unsold inventory
  • Flat pricing with continued incentives
  • Easing cost pressures June new home sales rose 12% YOY, with a 9% higher average sales rate and 3% more communities. We estimate this month’s builder survey represents 16% of new home sales annually.
  • Midwest and Florida regions lead with 20%+ YOY increases and plenty of favorable builder commentary.
  • Northeast and Northwest regions report the only declines, at -1% and -6% YOY, respectively. Builders saw very little additional traffic, despite June’s mortgage rate declines.
  • Only 12% of builders rate traffic as High.
  • 75% rate it as Average, which is decent, but below June 2018 and less than the April peak this year.

Pricing power varies by region.

  • Only 23% of builders nationally raised prices in June compared to 47% one year ago.
  • More power in Texas, where 40% of builders raised prices and only 2% dropped prices MOM
  • Less power in Southern California, where 27% of builders raised prices and 23% dropped prices MOM Cost pressures have eased, averaging 4% YOY nationally from 8% a year ago.
  • 4.5% price appreciation nationally exceeds cost increases. • Only the Midwest, Northern California, and Texas have higher average cost increases than prices.
  • Costs decelerated in 14 of 16 categories, led by easing lumber prices YOY.
  • Average cancellations at 10.5% are below June levels for the past three years.
  • Finished inventory averages 1.65 homes per community, up 4% YOY but below 2016 and 2017 levels.
    • The industry norm is 2 finished homes per community, varying by business model. Single-family starts declined by 3% YOY as builders remain cautious and labor and jurisdictional issues cause delays. Our starts index has declined ten months in a row, and the Census Bureau has reported declining starts in seven of the last eight months.

 

Click Here to Download the Burns Housing Survey from the Front Lines Report

 

Looking for a private loan for new construction or real estate development in the Midwest (Colorado, Utah, Texas, Wyoming)? Contact Broadmark Real Estate Management today for a quote.

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