December 5, 2023

Sales of New Homes Rise, but Pace Remains Slow

Buyers signed contracts for 29,000 homes in March, an 11 percent increase from the month before but down from 36,000 in March 2010. In March 2005, at the peak of the housing boom, buyers put down money for 127,000 houses.

The millions of homes built during the boom have created a drag on the current market as the owners surrender them to foreclosure. Builders cannot compete against relatively recent listings offered by banks for large discounts.

In a separate report issued Monday, the HousingPulse Tracking Survey indicated that nearly half of the entire housing market is distressed properties. Since banks have generally pulled back on foreclosures over the last six months, the survey underlined the long-term pressures facing the market.

If the banks start processing foreclosures faster, that will create further downward momentum on the housing market. A coalition of state attorneys general and the Obama administration is negotiating with the lenders to get them to do more loan modifications instead.

One good sign for home builders is the increase in sales of new homes from February, whose numbers were also revised up by the Census Bureau. February sales were the lowest for any month since records were first kept in 1963.

“Sales remain very low by historical standards and, considering that a number of homebuilders reported large drops in orders recently, there is likely more weakness ahead,” wrote Jennifer Lee of BMO Capital Markets.

Article source:

Speak Your Mind