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Homebuilders like what they see. Mortgage rates are low, buyer interest is high, and foot traffic at sales events is as high as its been in 3 years. It's another signal of housing's budding recovery.
As "new home" sales fall to all-time lows, homebuilder confidence is rising. It appears as is the nation's home builders -- the ones still in business, anyway -- have figured this housing market out.
It's been widely reported that New Home Sales cratered in February, but did they really? A footnote in the Census Bureau's report suggests otherwise.
The market for newly-built homes may not be as weak as the summer sales figures suggests. Homebuilders are closest to the market and they're feeling good.
First-time home buyers in Cincinnati would have risked up to $8,000 in federal tax credits if they had (1) signed for a newly-built home and (2) it wasn’t ready for move-in by November 30, 2009. It's no wonder New Home Sales cratered in November 2009.
The last two years have been rough on housing in a chain reaction-kind of way.First, mortgage guidelines tightened, preventing some homeowners from ditching onerous ARM products. That sparked a foreclosure boom that led to large losses on Wall Street. In turn, it sank the U.S. economy.Today, as compared to 3 years ago, foreclosures are way up, home values are way down, and mortgage rates are as low as they've ever been. It's wonderful news for home buyers -- there's a plentiful supply of homes and financing is cheap. Home affordability is near all-time highs.But the market is changing.
In housing, the basic law of Supply and Demand bestowed upon buyers an unbelievable amount of negotiation leverage. Want a lower sales price? Just ask for it. Need your closing costs paid for? Write it into your offer letter. Want a quick closing? Sure, whatever you need. But the Buyer Heyday may be over. At least, that's what recent data suggests.
Based on the last several months of real estate data, it appears as if home buyers are about to lose their upper-hand. When they do, buying a home won't be nearly the "deal" it may feel like today -- especially once mortgage rates head back up and after the $8,000 First-Time Home Buyer Tax Credit expires December 1. They say this is a Buyer's Market. It's only a buyer's market if you actually buy.
