9/21/2019 9:10:00 AM Good news for the housing market: Construction, sales both up US home building climbs 12.3 percent in August
WASHINGTON (AP) — The pace of U.S. home construction jumped 12.3% last month to a 12-year high on a surge in apartment building.
The Commerce Department said this weeky that housing starts came in at a seasonally adjusted annual rate of 1.36 million, most since June 2007 and up from a revised 1.22 million, as builders overcame a shortage of skilled workers and available land.
Construction of single-family homes rose 4.4% to 919,000. Building of apartments and condominiums surged 30.9% —biggest monthly gain since December 2016 — to 424,000.
Residential construction rose 30.5% in the Northeast, 15.4% in the Midwest and 14.9% in the South but was unchanged in the West.
In another good sign for the housing market, permits, a signal of future building, rose 7.7% to 1.42 million, highest since May 2007.
WASHINGTON (AP) — U.S. home sales rose 1.3% in August to the highest level in 17 months, as mortgage rates near historic lows have spurred a rush of home-buying.
The National Association of Realtors said this week that homes sold last month at a seasonally adjusted annualized rate of 5.49 million units, the best performance since March 2018. Sales have increased 2.6% from a year ago.
The recent bump in home sales are a sign of U.S. consumers’ resilience despite a darkening outlook for growth. Cheaper borrowing costs have improved affordability for buyers, making them more eager to buy despite rising prices amid a shortage of properties for sale.
“Consumers seem to still be confident in their finances, and are clearly feeling good enough to make large purchases such as buying a home,” said John Pataky, executive vice president at TIAA Bank. “The prolonged period of low mortgage rates has helped pull buyers off the sidelines by making home purchases a more affordable proposition.”
The median sales price climbed 4.7% from a year ago to $278,200, outpacing average wage gains.
Homebuyers have been a beneficiary from the recent economic uncertainty, as interest rates have fallen in response to slower global growth and President Donald Trump’s tariffs against China.
The 30-year mortgage rate averaged 3.73% this week, down from 4.65% a year ago, according to mortgage buyer Freddie Mac.
Still, the upside is limited by a decline in sales listings. There were 1.86 million properties for sale at the end of August, down 2.6% from a year ago.
The inventory crunch appears to be most pronounced in starter homes priced below $250,000, the kinds of properties that are generally affordable for first-time buyers. Sales of homes worth less than $250,000 have fallen in the past year, while sales of home priced between $250,000 and $1 million have risen.