“Permits for new construction are typically a forward-looking indicator of new starts, and the homebuilding industry continues to grapple with increasing materials costs and delayed deliveries from suppliers,” said Kan. However, construction is still facing headwinds given permits for new developments by homebuilders dropped 3%, largely because lumber and building material costs kept prices high. That’s more than 50% above above the May 2020 rate - when the COVID-19 pandemic was at its height in the country - of 1.05 million. According to the data, housing starts increased 3.6% in May to a rate of 1.57 million. Census Bureau on Wednesday painted a more hopeful picture of builders catching up to meet new home sales demand. Roughly 54% of homes sold in America during May closed at over listing price, according to data from Redfin, a record. “Loan balances continue to rise because of a larger share of sales in the higher end of the market, as well as increased sales prices from strong demand and elevated building material costs,” said Kan. ![]() According to the BAS, the average loan size rose from $377,434 in April to $384,000 in May ―the fourth consecutive month of rising loan sizes and a new survey high.īy product type, conventional loans made up 743.9% of loan applications, FHA loans composed 14.8%, RHS/USDA loans cam in around 0.9% and VA loans provided 10.4%. Lack of inventory and sweltering home prices have become a market norm for much of the industry, and May’s loan size data reported the trend has yet to abate. “Since reaching a survey-high 927,000 units in October 2020, the annual pace of new home sales has now fallen around 20 percent, weighed down by low housing inventory and rising prices,” said Kan Overall, the MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 741,000 units in May 2021. On a seasonally adjusted basis, the MBA also estimates new home sales fell at an annualized pace of 4% in May, said Joel Kan, MBA’s associate vice president of economic and industry forecasting. Compared to May of last year, MBA’s Builder Application Survey (BAS) revealed purchases are down 5.9%. ![]() Mortgage applications for new home purchases fell 9% month-over-month in May at a seasonally unadjusted pace ― the second consecutive month sales of new homes have dropped, according to data released Thursday by the Mortgage Bankers Association.
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