How 2 Buy a House

The new home sales data was released and the results are less than stellar. For 2011, there were only 302,000 new home sold nationwide. For perspective, in the South the numbers were the lowest since 1966, and that is the good news. In both the Northeast and the West, sales were the worst in recorded history.

So when you are talking with builders, be kind. They have had a very rough few years.

Purchases of single-family properties decreased 2.2 percent to a 307,000 annual pace, figures from the Commerce Department showed today in Washington. The median forecast in a Bloomberg News survey of economists called for a rate of 321,000 home sales. Last year marked the worst year for the industry in records going back to 1963.

The threat of further price declines may be dissuading some Americans from buying a new home even with mortgage rates near all-time lows and more people finding work. Following a lull in 2011, a wave of foreclosures may hamper the recovery in real estate as more distressed properties are put on the market.

“Builders continue to contend with a number of existing homes that are deeply discounted,” said Anika Khan, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “We’re expecting a bit of a pickup in 2012, but we won’t see a meaningful increase as long as new homes are competing with those existing homes.” via Bloomberg

New Home Sales Information From the Census Bureau

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New Home Sales Remain Anemic in 2011

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It is hard to have a significant drop in the builders index. It was sitting at a score of 16 out of 100 in May having been stuck in a very narrow range of despair over the past couple of years.

But the recent increase in material costs and lack of demand sent the index down 3 points to 13, just barely above the level of complete panic…

Folks, builders have no where to turn until the economy picks up. When the press release reads like this you know there is no joy at the National Association of Home Builders:

“Builders are being squeezed by the continuing weakness in existing-home prices – against which they must compete — as well as rising material costs,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. “In addition to the ongoing impacts of distressed property sales on home prices, appraisal values and consumer confidence, rising costs for materials such as roofing, copper, wallboard, vinyl siding and other components have made it extremely difficult to construct a new home and sell it at a price that covers the costs.”

“Builder confidence has waned even further as economic growth has stalled, foreclosures have continued to hit the market and the cost of building a home has risen,” agreed NAHB Chief Economist David Crowe. “Meanwhile, potential new-home buyers are being constrained by difficulty selling their existing homes, stringent lending requirements, and general uncertainty about the economy. Economic growth must pick up in order for housing to gain the momentum it needs to get back on track.” via the NAHB Press Release

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June Builder Confidence Report Drops From 16 to 13

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