July 04, 2024: Housing Market News

Welcome to today’s roundup of the latest developments in the real estate sector! From high inventory levels impacting new home building activities to shifts in housing market predictions for 2024, our coverage spans a variety of critical topics that affect both buyers and builders. Discover how new constructions are shaping up across different regions, understand the ongoing debates about building codes, and get insights into the economic forces playing pivotal roles in the housing landscape. Whether you’re a potential homebuyer, a builder, or simply keen on following real estate trends, our articles provide the knowledge you need to stay informed. Dive into detailed analyses and expert opinions to grasp the current state and future of real estate.

High New Home Inventory: What it Means for Home Building | NAHB

Housing economists typically advise that a balanced market inventory is a five- to six-months’ supply — meaning that is a measure of how many months it would take for that count of home inventory to be sold at the current monthly sales rate. Inventory larger than a five- to six-month supply would suggest weaker or declining home price growth and home building activity. Lean inventory levels (less than a five- to six-month supply) tend to lead to price growth and gains for home building activity.

In the Census May 2024 newly built home sales data, the current months’ supply of inventory is 9.3. Some analysts have noted that, given the five- to six-month benchmark, that this means the building market for single-family homes is possibly oversupplied, implying declines for construction and prices lie ahead.

However, this narrow reading of the industry misses the mark. First, it is worth noting that new home inventory comprises homes completed and ready to occupy, homes currently under construction and homes that have not begun construction. That is, new home inventory is a measure of homes available for sale, rather than homes ready to occupy. In fact, just 21% of new home inventory in May comprised standing inventory or homes that have completed construction (99,000 homes).

More fundamentally, an otherwise elevated level of new home months’ supply is justified in current conditions because the inventory of resale homes continues to be low. Indeed, according to the National Association of Realtors, the current months’ supply of single-family homes is just 3.6, well below the five- to six-month threshold. The vast majority of homes for sale are in the resale market. It is this lack of inventory that has produced ongoing price increases despite significantly higher interest rates over the last two years.

NAHB estimates that the combined new and existing single-family home inventory is at a 4.4 months’ supply, which qualifies as low. In other words, overall current inventory levels continue to support on a national basis limited gains for home building and upward pressure on home prices.

NAHB Chief Economist Robert Dietz provides an in-depth analysis in this Eye on the Economy post.

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Housing Market Predictions For 2024: When Will Home Prices Be Affordable Again? – Forbes Advisor

Despite high mortgage rates, out-of-reach home prices, and sluggish sales transactions, experts insist that the housing market will improve. However, several ongoing headwinds, such as inflation and persistently high mortgage rates, continue to delay the much-awaited transformation. The inventory shortage remains severe, with many homeowners unwilling to sell in a high-priced market. While new home construction provides some relief, it is not enough to fill the inventory gap meaningfully. Experts believe that a significant increase in the supply of existing homes for sale and cooling mortgage rates are necessary for a housing recovery. Despite these challenges, there is a light at the end of the tunnel, with anticipated slower home price growth and lower mortgage rates expected to provide some relief for home shoppers. To learn more about the current state of the housing market and future predictions, read the full article.

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New home construction begins soon for Childersburg residential development – Sylacauga News

The new College Park residential development in Childersburg is entering its next phase, with the construction set to begin in July. The development, consisting of 132 homes, aims to create a beautiful residential community that combines modern living with small-town charm. The thoughtfully-designed homes offer spacious layouts and contemporary finishes, catering to various buyers. With easy access to activities, excellent schools, and abundant career opportunities, College Park provides an ideal living experience. If you’re interested in learning more about this development by Raush Coleman Homes, contact Robbyn Duncan at (205) 878-5888.

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Lumber is cheap, but building or renovating a home isn’t – Marketplace

While lumber prices have fallen back to normal levels after the pandemic-induced surge, the overall cost of building or renovating a home remains high. The demand for construction materials, such as plastics and steel, has increased, driving up costs by 30% compared to 2019. Despite relatively cheap lumber, the affordability of homes is still a challenge. Builders are adapting to this environment by constructing smaller homes, which require fewer materials. If you want to learn more about the complexities of the housing market and the factors affecting home construction costs, read the full article.

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Construction costs increasing, Billings housing market stable

The rising cost of lumber has contributed to the increased prices of houses in the Billings real estate market. Despite some decrease in lumber prices, they are still higher than they were four years ago. Other factors, such as a labor shortage and increased labor costs, also add to the expenses of home construction. The limited supply of new homes on the market has created a seller’s market, with high demand and low inventory. The average sales price for new construction homes is $475,000, reflecting the challenges faced by builders. However, both industry professionals agree that the Billings housing market remains stable and resilient. To learn more about the construction costs and the state of the housing market in Billings, read the full article.

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Pushback on adopting new building energy codes in NH highlights climate, affordability tensions | New Hampshire Public Radio

New Hampshire is facing a debate over updating its building codes, particularly the energy efficiency code for new homes. While proponents argue that adopting the 2021 energy conservation code would lead to more efficient homes, reduced energy use, lower bills, and decreased climate-warming pollution, opponents, including the Home Builders Association, claim that the updated codes would make homes unaffordable. The cost of construction and labor shortages are also factors affecting the adoption of the new codes. The 2021 codes could significantly reduce carbon dioxide emissions and put less strain on the energy grid. To learn more about the ongoing debate and its implications for climate and affordability, read the full article.

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American Repertory Theater Begins Construction on New Home in Harvard’s Allston Campus | News | The Harvard Crimson

The American Repertory Theater (A.R.T) has started construction on its new location in Harvard’s Allston campus, following a generous $100 million donation from David E. Goel and Stacey L. Goel. The new facility at 175 North Harvard St. will feature two performance venues, studios, outdoor performance spaces, and office areas. The project is expected to be completed by 2026, although an opening date has not been announced. The A.R.T aims to create a vibrant gathering place for the Allston community, offering amenities such as free Wi-Fi, food and beverage service, public art, and performance spaces. The organization looks forward to welcoming audiences to its new home and continuing its legacy in the performing arts. To stay updated with breaking news, subscribe to The Harvard Crimson’s email newsletter.

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