All opinions are those of Michael Haigh or the Guest Blogger featured.
They do not necessarily reflect the opinions of W.J. Bradley Mortgage Capital, LLC


Homeowners Rejoice! New Homes Sales Data Is Weak.

If you only read headlines this past week, you may have missed two very important points.

The first story relates to Housing Starts. Housing Starts measure the number of new homes entering the construction phase. The headline blared “Housing starts plunge to 16-year low“.

If you are a homeowner, this is terrific news.

Because home values are governed by Supply and Demand, fewer homes built means that home demand has a chance to rebalance against home supply.

This places upward pressure on home prices nationwide.

When Housing Starts drop, it says more about weakness in builder sentiment that it does about the state of the housing nationwide. Housing Starts are at all-time lows because builders want to sell the product they have before putting more product on the market.

The second story was yesterday’s New Home Sales figures.

The headline read that “US new-home sales slide in record plunge” but, again, let’s look a little deeper.

New Home Sales are defined as homes that are newly built. Stated differently, it specifically counts the number of homes sold that were once classified as “Housing Starts”.

If Housing Starts falls, therefore, we can expect New Home Sales to fall, too. The two data points count the same housing inventory at two different points along a timeline.

These two stories are related but neither should be construed as bad news. As builders cut back on the supply of homes, it should create an increase in relative demand.

For homeowners, this is a positive development.

Be Sociable, Share!

Related posts:

  1. Existing Home Sales Data is Weak, But Traders Find Strength
  2. How Terrible Housing Data Can Actually Help Push Home Values Higher
  3. Home Affordability Increases On Weak Retail Sales Data

About

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

  • About the Team

    The Michael Haigh Team specializes in providing a professional, efficient and educational loan experience. We strive to find you the best real estate loan to suit your needs without putting you at risk—even if it's not from us! Our site will provide you with a plethora of information that will help you to figure out the loan process, answer your question, calculate the estimated value of your home, and calculate your estimated closing cost. On top of this you should check out our blog where we have frequent updates from Michael and other contributors on a multitude of topics related to mortgages.

    Backed by W.J. Bradley and Michael Haigh's notable history in the mortgage industry, The Michael Haigh Team is able to provide loan decisions much faster than large banks. Every aspect of your loan will be handled quickly and correctly so you know that nothing is left to chance. We're here to make this process as easy as possible for all parties involved and pride ourselves on making it right for every client. Contact us today to learn what we can do for you!

  • Michael Haigh Team

    1860 El Camino Real
    Suite 250
    Burlingame, CA 94010

    Privacy Policy
  • Web Analytics