If there has been a single consistent theme in the housing market for the past several years, it is that the inventory of homes for sale has been extremely low. Needless to say, this has provided quite a bit of frustration for home buyers as it has made the competition for the limited supply of homes on the market that much more competitive. As a result, this tight inventory has also kept home prices high as well. One possible solution to the persistent home inventory challenges is new construction. Not surprisingly, we have seen new home sales remain strong for quite some time now. In fact, new home sales have been consistently rising for the past five straight months.
New home sale trends
The National Association of Home Builders (NAHB) reported that newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau demonstrated that sales of newly built, single-family homes have been continuously rising since October. As of the most recent data month, February new home sales showed an increase but at a lower rate. (February’s data reflected an increase of 1.1%, to a rate of 640,000 units.) This rate is actually down about 19% as compared to a year ago.
As of February, the amount of new homes for sale represents a supply of 8.2 months at the current sales rate. As a reminder, a level of around 6 months is considered to be a balanced market. A higher supply than 6 months favors a buyer’s market, while a lower supply than 6 months favor’s a seller’s market. Unfortunately, the inventory of new homes is only part of the equation. When looking at the inventory of existing homes for sale, that figure is only at 2.5 months. Therefore, this provides some consistent inventory challenges overall in the current market.
Are you thinking about buying a new construction home? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.