Overall Housing Confidence Boosted by Record New Home Sales
It’s no secret that the housing market has been on a gradual but steady, never faltering upswing all throughout 2014. When home prices started to rebound in 2013, and the market seemed to be heading up with no limits, alarms were sent out across the real estate industry to beware of the unsustainable housing bubble. However, those fears were not realized, and housing prices began leveling off as supply and demand started to be more balanced. To culminate such an incredible growth year for the new home industry, December, 2014’s new home sales numbers were something to celebrate for new home builders and new home buyers alike. The pace of sales of newly built, single-family homes increased 11.6% in December to a seasonally adjusted annual rate of 481,000 homes, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, which is the highest it has been since June, 2008.
This 6-year increase has been a long time coming, but most builders have had a rise in confidence throughout the entire year according to the National Association of Home Builders’ HMI score which is taken each month in 
partnership with Wells Fargo. The HMI is short for the Housing Market Index, and it measures builder confidence throughout the United States by taking a survey each month to ask builders questions about the following three topics: current home sales conditions, future new home sales projections, and consumer participation or confidence. These three scores are averaged out over 4 regions of the U.S. and any number above 50 indicates strong builder confidence. As of December, 2014, builder confidence had been above 50 for 5 consecutive months straight, and in January, the average score nationwide was 57.
Builders are not the only people who are interested, excited, and confident about real estate and / or the economy in general. Consumer confidence has been on the rise with the reduction of unemployment numbers, growing employment opportunities, long-term unemployed citizens coming back into the job market, overall economic growth each quarter according to GDP numbers, and the rise in retail sales. Because of steady full-time employment instead of just part time employment, households are now not only paying their bills, but they are also able to save money once again. Another factor that helps with household wealth is the reduction of gas prices for now which have eased costs not only at the pump but also at grocery stores and other industries that have to increase prices due to the cost of gas.
With all of this good news and confidence “floating around” for both builders and consumers, the National Association of Home Builders is projecting a 26% increase in new home construction starts in the year 2015 which would be 804,000 new homes built this year. For home buyers, there is an incredible investment opportunity to buy a new home for two reasons. First interest rates are still at historic lows, and just last week, they once again dipped down to 3.75% for a 30-year mortgage and 3.25% for a 15-year mortgage. As long as interest rates are so low, the cost to buy a home is minimal when it comes to interest. The second reason is that the credit restrictions and application hoops and hurdles have eased slightly for all home buyers, making it easier to obtain a loan. Also, the FHA, Fannie Mae and Freddie Mac have just reduced loan down payments to 3% – 3.5%. Two days ago the FHA lowered the cost of their loans from 1.35% of the loan value to just .85% of the loan value. If you are looking for a new home investment in St. Tammany Parish, you will want to contact Bedico Creek Preserve in Madisonville, Louisiana t 985-845-4200 or E-mail Info@LiveBedico.com. We have 9 different Neighborhoods from which to choose with Homes for Sale and Lots for Sale. You can also build a custom home on one of our lots. Contact Us Today to get started on building your dream home!
