Brighter Days Ahead The U.S. Commerce Department reported in December 2006 that in the month of November, sales of newly built, single-family homes rose 3.4 percent to a seasonally adjusted annual rate of 1.05 million units. Sales also were revised upward for the three previous months.
The latest number is up from October's 1.01 million units and well above the recent low of 979,000 units that was recorded in July.
“This is a very good report and is consistent with the idea that the rather abrupt downward correction in home sales from the unsustainable highs of 2005 has reached its end,” says David Seiders, the NAHB's chief economist. “Furthermore, inventories of unsold units are gradually being drawn down from their mid-year highs.”
“The data also confirms what our builder surveys have been telling us over the past several months—that buyer demand is firming up across many markets, and that builders are looking forward to further improvements in sales activity in 2007.”
The inventory of new homes for sale fell for the fourth consecutive month in November to 545,000 units, which is equivalent to a 6.3-month supply at the current sales pace. This is the lowest inventory level since February and the lowest month's supply since May.
Stock Slump The current cooling trend in the housing market appears to have dampened investor confidence somewhat in companies whose primary business involves apartments and condos, according to the results of the latest Multifamily Stock Index (MFSI), released by the NAHB late last year.
The November MFSI dropped by 16 points—about half of 1 percent—to an index value of 3,632, down from last month's record high of 3,648. It was the first decrease in the MFSI's value since May 2006; but even with this drop, the MFSI remains 28 percent higher than it was a year ago.
“The current inventory of unsold condos is somewhat troubling for the multifamily housing market,” says David Seiders, the NAHB's chief economist. “We're keeping a close eye on how this will impact the market.”
Hitting the Mark The NAHB Research Center recently announced the National Housing Quality certification of privately owned production and custom builder Elliott Homes. Headquartered in Folsom, Calif., the company earned the designation following a rigorous NAHB Research Center audit of the implementation of its quality assurance launch in early 2005.
Additional home builders across the country are currently participating in the program and are working toward certification by early 2007, signaling the NHQ Program's growing impact in helping to improve quality and customer satisfaction in America's housing industry.