New Construction Demand, Home Sales on Fire

“We have been under producing for the past decade,” – Lawrence Yun, chief Economist of NAR hopes that an infastructure bill will bring high speed internet and public transportation to rural areas increasing the demand to build in places where it is cheaper and quicker to build housing.

Rates – improved slightly this week as Covid cases spike. Year over year rates are down 1%

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Jobs – over the past month the number of people filing for unemployment for the first time has remained stable at approximately 742,000. The number of people filing continuing claims dropped by 430K but half of these folks went on to file for PEUC (Pandemic Emergency Unemployment Compensation).

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Home Sales – increased 4.3% between September and October and are now up 27% year over year. The level of sales in near the all-time high set in 2006 when there was double the number of homes for sale. Homes are averaging only 21 days on market, while 75% sold in under 30 days – the other 25% were likely unrealistically priced.

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New Construction – builders are incredibly optimistic about the future of new construction. This index is measured on a scale of 1-100 (over 50 indicates expansion) and shows that builders feel great about futures regardless of material prices. New construction starts are up 14.2% year over year.

Mortgage Applications – overall application volume decreased by a marginal 0.33% from the pervious week (purchase application were up 4%). Refinances are up 98% year over year and purchases applications are up 26%.

Forbearance – the share of mortgage loans in forbearance decreased 0.2% to 5.47%, approximately 2.7M homeowners are in forbearance.

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