The newly-built housing market in the U.S. has experienced heartening outcome the past last months, which has reinforced and has created a ray of hope for the industry.
Lower mortgage costs helped buyers afford properties and, after 2 months of an ongoing drop, there was an increase in the sale pace of newly built single-family homes by 7% in June compared to last year. The variation was mainly led by the Midwest and the South regions. This ladder rose to the highest level since 2007.
The current forecast of sale pace for 2019 is almost 660,000 homes/year and so far it has been around 652,000/year up from 615,000 for the entire 2018. With a median listing price of nearly $310,400 in 2019, there was barely a variation of -0.03% down compared to a year earlier. The median sales price increased by 4.5% compared to 2018.
It is important to know that the newly built home is only 10% of the total home industry. The other 90% represent previously-owned homes which are not going as well. Sales drop -17% in June compared to the same period last year. Resales pace in June 2019 was 2.5% higher than the prior 2 months but 1.1% lower than June 2018
Even though there has been an improvement in the housing market, the offer is not keeping up with the demand. The absorption rate, which shows how long it would take, at current sales rates, to sell all the homes on the market, is 4.3 months which is lower than what a healthy market is supposed to have with a 6-month period.
Due to the positive equity of homeowners, the possibility of buying homes gets easier and more sustainable. This conclusion is shown in the positive results of May and June's market performance. After a harsh winter period, this recovery of newly-built homes gives the housing industry a breathe and a new perspective of upcoming changes.
Residential neighborhoods in Miami are constantly building new homes and helping the housing industry, such as Coconut Grove, Coral Gables, and Miami Shores.