The market for newly-built homes remains strong.
As reported by the U.S. Department of Commerce, 372,000 new homes were sold in July on a seasonally-adjusted, annualized basis. A “new home” is a home that can be considered new construction.
July’s New Home Sales report highlights what today’s buyers of new construction and the nation’s home builders have witnessed for themselves already — that the market for newly-built homes is improving in Chicago and nationwide.
The number of new homes sold in July on a seasonally-adjusted, annualized basis matches the tally from May 2012, and is the highest reading since April 2010, the last month of that year’s federal home buyer tax credit.
The South Region continues to account for the majority of new construction sales, posting a 48% market share in July. South Region sales were up 9.1 percent as compared to one year ago. The other 3 regions posted higher sales volume as well :
- South Region : +9.1% from July 2011
- Northeast Region : +30.4% from July 2011
- Midwest Region : +21.7% from July 2011
- West Region : +63.8% from July 2011
Also noteworthy is that the increase in new home sales is coming at a time when new home supplies are slipping.
At the end of July 2012, there were just 142,000 new homes for sale nationwide. This is the smallest new home housing stock in at least 7 years, and a signal that buyers are buying homes faster than builders can build them. At the current pace of sales, the national supply of new homes would sell out in 4.6 months.
Because economists believe that a 6.0-month supply represents a market in balance, the current new home market is decidedly a “sellers market”. Buyers throughout Illinois should expect higher new home prices ahead.
Dating back to October 2011, the housing market has shown slow, steady growth. Home prices have moved higher and so has builder confidence. If you’re in the market for new construction consider going into contract soon. The longer you wait to buy, the more you may be asked to pay.