The US Census Bureau and Department of Housing and Urban Development in a joint release reported that newly constructed single family homes sold at a seasonally adjusted annual pace of 482 thousand in June, down from May’s 517 thousand pace (-6.8%), but up from the June 2014 pace of 408 thousand (18.1%). The inventory of new homes for sale inched up 3.4% to 215 thousand.
Despite a soft June new home sales have been trending up since 2012. We expect this to continue through the rest of the year and into 2016. Strong job gains are bolstering housing demand. Rising builder confidence, housing starts and new home sales all point to continuing recovery in the housing sector.
Headwinds on both the builder and buyer sides remain. Low supplies of developed lots to build on and skilled labor for construction are holding back builder efforts to meet rising demand. Meanwhile still restrictive access to mortgage credit is impeding more activity on the buyer side. Some recent improvement has been made on the lending side and continuing improvement in the housing sector should lure back the workforce that fled during the housing downturn. But the road to a more robust housing market, and the infrastructure that supports it, won’t be without its bumps. No magic wand, just an invisible hand, as market forces continue to push the housing recovery forward.