Housing Industry on the Fast Track with No Signs of Slowing
New data on housing starts, home sales, builder permits and builder confidence reveal that the housing industry is continuing its drastic year of recovery. For the third straight month, the Atlanta residential real estate index, the Cal-Culator, has continued to climb. The index increased 0.1 to a 6.6 – a record high since the index’s inception in September 2013.
RE/MAX’s National Housing Report found that home sales in April were greater than in any other April since the company began the report in 2008. Completed transactions were 7 percent higher than in March and 6.5 percent year-over-year.
“The spring selling season has gotten off to a very strong start … With an improving economy and continuing low interest rates, potential buyers are motivated to enter the market,” said RE/MAX CEO Dave Liniger.
Although the report also found that inventory increased 2.3 percent in April, marking the first month-over-month increase since June, inventory is still 11.4 percent below last year, and the months supply of inventory is at an extremely low level of 3.6.
CoreLogic’s May MarketPulse revealed that eight out of the 10 fastest growing new home sales markets are located in the South. In perhaps the most promising news of the month, Atlanta is now the third fastest growing market in the nation with sales up 10 percent from last year.
“Atlanta’s new home market strength is particularly remarkable given that distressed sales still account for 16 percent of all sales – by far the highest of the three markets,” said CoreLogic Deputy Chief Economist Sam Khater. “As distressed sales continue to fall in Atlanta, that will give additional marginal lift to new sales.”
S&P Dow Jones Indices
S&P Dow Jones’s Weekly Economic Roundup, published by U.S. Deputy Chief Economist Beth Ann Bovino, found that housing starts reached a seven year-high after growing to an annual rate of 1.135 million in April. The U.S. Leading Economic Indicators grew 0.7 percent, the Consumer Price Index rose by 0.1 percent, permits for new home construction were up 10 percent and, for the first time since 2009, the real dollar volumes of construction and land development began to rise year over year.
The next Saporta Report column will be released July 14. If S&P holds true in its prediction that we will see “pent-up demand, rising incomes and solid underlying fundamentals supporting a gradual housing recovery this year,” the next index should have more positive news to announce next month.