The good news is: Housing starts and permits improved above expectations in May. The bad news is: Single-family houses sold at an annual rate of 342,000 units in May, down 0.6% month-over month and 32.8% below the rate seen in May 2008. The May inventory of new homes was estimated to be 292,000 units representing a 10.1 month supply based on current sales activity. While the number of new homes for sale has continued to trend downward since May 2007 as builders strive to deplete standing inventories, the two regions that have the largest existing home inventories are reporting the greatest new construction activity.
In the West, housing starts were up 28.6% month-over-month in May while the South reported increased activity of 16.8%. By the end of June, housing starts had increased another 3.6%, month-over-month, and these two regions continued to lead the fray. That said, we do know that portions of the West and the South have seen significant increases in traffic and sales over the last two months and builders are finding that models and standing inventory are necessary to attract buyers.
We also know that mortgage lending is proliferating. Genworth Mortgage Insurance Corp., a division of Genworth Financial, recently announced the removal of 136 metros from its declining and distressed markets list based on "continued changes in the mortgage market and (our) ongoing evaluation of loan performance." The action taken by Genworth has the propensity to loosen up loan-to-value (LTV) and down payment standards in these market areas. Included in the 136 markets were Baton Rouge, LA, Charlottesville, VA, San Antonio, TX, Fort Worth Arlington, TX and Kansas City, MO - all, notably, in the West and South.
The challenge for the real estate practitioner is to keep one eye on the horizon while scrutinizing day-to-day conditions with the other. In reality, the current conditions are creating new opportunities. These are evident in the form of housing affordability, development repositioning, mergers, and project acquisitions, which in turn provide new brokering, sales, and job opportunities. In this regard, we've decided to offer a special opportunity to real estate professionals that find themselves in search of validated, positive talking points during this critical period. For the first time in our 18 years of publication, you can now review the current issue's content at BowdensMarketBarometer.com. If you think it will serve to edify or enlighten, you can purchase that individual issue. In the meantime, keep checking out "Current Climate" and our blog at Bowden's Beat for "All the trends that are fit to follow . . ."
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