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There was some mixed housing news in recent weeks, though the sector still remains a bright spot in a somewhat slowing economy.
The Scoop on Housing Starts, Building Permits and Sales
Fewer folks began excavation on new homes in August. The Commerce Department reported that August Housing Starts fell 5.8 percent from July to an annual rate of 1.142 million units. This was below the 1.186 million expected. The South saw a decline of 15 percent, offsetting gains in the Northeast, Midwest and West. Starts on single-family homes fell 6 percent, while multifamily dwellings decreased by 5.4 percent.
Meanwhile Building Permits, a sign of future construction, fell 0.4 percent to 1.14 million units, below the 1.16 million expected.
Sales of existing homes also fell 0.9 percent in August from July to an annual rate of 5.33 million units, according to the National Association of REALTORS®. This was below the 5.50 million expected. On a positive note, sales were up 0.8 percent from August 2015. In addition, the Commerce Department said that August New Home Sales declined from July but were 20.6 percent higher than August 2015.
Builders Seeing the Brightside
Builder confidence in September jumped to its highest level since October 2015 as reported in the National Association of Home Builders (NAHB) Housing Market Index. The Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months. The survey also asks builders to rate traffic of prospective buyers. All three components moved higher in September from August.
Limited inventory of new and existing homes for sale, solid job creation and low interest rates are fueling demand, according to NAHB chief economist Robert Dietz.
While tight inventory remains a challenge in many areas of the country, the good news is that home loan rates continue to hover in historically low territory. This is helping offset home price increases due to limited supply, and providing great opportunities for people looking to purchase or refinance.
If you have any questions about home loan rates or loan types, please don't hesitate to contact me.