Housing Market Slows but Still Steady


The National Association of Home Builders (NAHB) released their Housing Market Index (HMI) for the month of November.  With this release, we see the number drop from 68 down to 60.  This number is the lowest in roughly two years, however it is still higher than its 30-year average of about 50.  The HMI is based on a monthly survey of NAHB members designed to gauge the single-family housing market.  The survey rates the sale of new homes at present time, the amount of sales in the next six months and new traffic of new home buyers.

The U.S. Census Bureau and the U.S. Department of Housing and Urban Development recently announced their construction data.  This report is broken down into the following:

Housing Starts – This measures the number of residential new construction projects that have “started” in the given month.  For this month’s report we see starts increase by 1.5% from September to October.

Building Permits – National permits to “break ground” dipped slightly by 0.6% from September to October.  A large drag on this number comes from the Midwest where permits are about 17% lower from this time last year.

Housing Completions – This measures the number of new homes that have been built and made ready to be occupied.  There were about 1.1 million privately-owned completions for the month of October, which is about 3.3% lower than September.  Single-family completions also dipped, but only by 1.2%. 

So what does this all mean?

There is a slight builder slowdown occurring, but housing is still pushing along and performing steadily.  With the seasons changing and demand lessoning, builders are slowing, but are still optimistic for the future.  This may be a great time to take advantage of a lull and invest in a property where you may be able to purchase at a discount.