Highest New Home Inventory in 5 Years
News from the National Association of Home Builders (NAHB) is that new home builders are looking for and buying lots and getting building permits, but new home inventory of homes not yet started is still strong because it is possible that these builders are waiting on buyers (pre-solds) before beginning construction. There is much good news coming out about new home building permits for single-family homes, new home inventory, and new home sales.
Single-family home building permits were up 2.4% in October, 2015. Overall, single-family new home building permits are up 8.6% for the year 2015. Single-family home starts are up year-to-date as well with a slight dip in October due to storms in the Gulf Coast and Southern regions. Because building permits and starts are up for the year, new home construction of single-family homes is also up across all regions nationally.
New home inventory stands at the highest level since March, 2010, and increased overall in 2015 1.3% to 226,000 available homes. If homes continue to sell at their current pace (and no new homes were built), all homes would be sold off in 5.5 months. Inventory for new homes not yet started is the strongest it has been since the end of 2008, right before the Recession. Builders are looking for lots and labor as the housing market returns in force. There is simply not enough land for sale or sub-contractors to build new homes to support the amount of inventory coming out of the ground – which is good news for the real estate industry.
In addition to the high amount of new home inventory, new home sales are also thriving to increase 10.7% to 495,000 in October compared to September’s numbers. The total number of new homes sold has increased 15.7% year-to-date. The NAHB is predicting an overall sales pace of 511,000 new homes in 2015, and October’s numbers seem to show that it will happen by end of year.
