New Home Sales Well Ahead of Last Year's Pace
Sales in 2015, through October, are 15.7 percent ahead of last year, the National Association of Home Builders said.
"Our builders are reporting continued optimism in the housing market, and are adding inventory in anticipation of future business," said Tom Woods, chairman of the NAHB.
"With a firming job market, affordable home prices, and rising pent-up demand, today's report is another indicator that the housing market continues to move on a modest upward trajectory," said David Crowe, chief economist for the NAHB.
Big Jump in Quarterly Home Sales
Housing market results in the third quarter were the best of any three-month period in nearly a decade, the National Association of Realtors said.
Lawrence Yun, chief economist for the NAR, said home prices stabilized from July through September, mortgage rates remained favorable and overall economic conditions continued to improve.
All those factors combined to drive many more homebuyers to the market, Yun said.
"The demand for buying picked up speed in many metro areas during the summer as more households entered the market, encouraged by favorable mortgage rates and improving local economies," Yun said. "While price growth still teetered near or above unhealthy levels in some markets, the good news is that there was some moderation despite the stronger pace of sales."
Existing-home sales, including both single-family homes and condos, rose 3.4 percent to 5.48 million units in the third quarter. Sales were 8.3 percent higher, when compared to the same three-month period in 2014, the NAR said.
Roughly 2.21 million existing homes were still for sale at the end of the third quarter, under the 2.28 million homes available during the same time frame in 2014.
The pool of potential buyers still outweighs what's available for sale in many markets this fall, said Chris Polychron, president of the NAR.
Construction Starts Forecast Lowered for 2015
Construction starts nationwide came in slightly below expectations in the third quarter, so Construction Market Data Group has lowered its fourth-quarter forecast for 2015 to 6.8 percent.
CMD's third-quarter prediction was 7.1 percent.
The consulting firm said the civil engineering sector exhibited strong growth, but the residential and non-residential areas turned in lackluster results.
But 2016 should be better.
CMD said construction starts are expected to grow 8.4 percent next year, led by the residential and non-residential sectors, while civil engineering construction is expected to slow down.
"A good gain in U.S. construction starts in 2015 will accelerate in 2016 and 2017, before settling down in 2018," said Alex Carrick, CMD's chief economist. "Some moderation in engineering strength, which has been a mainstay of site-work lately, will be compensated by a pick-up in non-residential building activity. In residential, pent-up demand for new housing continues to accumulate and will soon need addressing."