The 2019 real estate market is approaching the halfway point of the year and recent statistics published jointly by the Census Bureau and Department of Housing and Urban Development reveal an interesting mix of ups and downs within the new housing market. The good news is that new house prices have increased 8.8% from last May. However, disappointing drops in the sale of new single family homes was also reported, they fell 6.9%
An article published by Bloomberg, reported by Reade Pikert, offers some explanation behind these conflicting statistics. A detailed view of the home sales decline reveals that the home that are experiencing the decline in sales are almost all priced below $300,000. Thus suggesting there is a shortage of “affordable” properties.
Additionally, sales of existing homes took a dip in April, yet the number of sales of pre-construction properties reached the highest level since 2017. Pickert indicates, “New-home purchases account for about 10% of the market and are calculated when contracts are signed. They are considered a timelier barometer than purchases of previously-owned homes, which are calculated when contracts close.”
Despite the mixed reviews of the new housing market’s 2019 performance thus far, it seems investors remain optimistic. The article states, ”A gauge of U.S. homebuilding-industry stocks erased losses after the data and was up about 0.3% despite losses in the broader market, suggesting investors were focusing on the upward revisions to new home sales.”
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