The new construction housing market powers on.
For the fourth straight month, Single-Family Housing Starts topped 600,000 in March. Last month's seasonally-adjusted, annualized 619,000 starts represents a 29 percent increase from one year prior.
Builders are building, but home buyer demand continues to outpace the available home supply.
The price for newly-built homes is expected to rise.
According to the U.S. Department of Commerce, single-family housing starts slipped five percent in March 2013 as compared to February, a month during which starts had spiked.
A “housing start” is defined as a home on which ground has broken, or construction has otherwise started.
Housing starts have climbed at a steady clip since late-2011, a period associated with the housing market's turnaround. Last month's showing lifts the rolling 4-month average above six-hundred twenty-five thousand, a figure not seen since Summer 2008.
This is notable because 2008 predated the homebuyer tax incentives of late-last decade. We can infer than this year's housing market, therefore, is a function of true housing demand as opposed to tax-related demand.
The nation's homebuilders agree that the future looks bright.
Earlier this week, the National Association of Homebuilders (NAHB) reported home builder confidence near a 7-year high. Despite rising costs and difficulty finding lots and labor, NAHB expect new home sales over the 6 months to be the strongest since 2006.
Today's ultra-low mortgage rates play a role, too.
Sudden, early-April drops in conventional and FHA mortgage rates have bestowed upon today's home buyers far greater purchasing power for both new and existing homes.
Assuming a 3 percent downpayment on the Fannie Mae Conventional 97 program :
That's a 6 percent increase in purchasing power and the math works for all loan types.
Whether you use an FHA loan, a VA loan, a USDA loans, or a conventional one, homes are more affordable on a dollar-for-dollar basis today. It's easy to see why homes for sale are scarce.
Builders have noticed, too. Home costs are expected rise through at least 2014 as the market finds balance.
If your plans for 2013 include buying a home, consider that home prices are moving higher in most U.S. markets, and that mortgage rates are expected to rise by the end of the year.
The Mortgage Bankers Association predicts rates climbing to 4.4% in 2013, a change which erodes home purchasing power by 11% -- not to mention the effect of more costly homes.
Therefore, see how much home you can afford today. Get started by taking a look at today's mortgage rates.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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2015 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)