Blog posted On November 16, 2020
Mortgage rates trended slightly upward last week, but are still in a historically low range. This week, there are several key housing reports scheduled for release. The housing market index will come out on Tuesday. Followed by housing starts and building permits on Wednesday and the existing home sales report on Thursday.
The National Association of Home Builders’ (NAHB) housing market sentiment index is based on a survey of home builders’ perceptions on current sales activity, sales expectations for the next six months, and buyer foot traffic. Any reading above 50 is considered positive. Last month, the housing market sentiment index hit a record high of 85. The increase of two points in October marked the third month in a row that home builder sentiment struck a record high, and the second time that the index hit a level above 80.
Housing starts track ground broken on residential projects and building permits track permits issued. In September, both housing starts and building permits increased – reaching seasonally adjusted rates of 1.42 million and 1.55 million, respectively. Month-over-month, housing starts climbed 1.9%, while building permits rose 5%. Single-family starts saw the highest year-over-year increase, up 22% from 2019. Multifamily starts, however, were down 17% from last year. Overall, housing starts had a gain of 11% compared to last year while building permits had an 8% year-over-year gain.
Existing home sales or resales track the sales of previously constructed homes and make up approximately 90% of residential real estate transactions. In September, existing home sales surged, with a 9.4% month-over-month increase. Up 21% from last year, existing sales reached a seasonally adjusted level of 6.54 million, and more than 70% of the homes on the market sold in less than a month.
With home builder confidence high and more homes coming to the market, it’s likely that home prices will become more affordable soon. Many home buyers will want to take advantage of the opportunity, causing competing offers for the same house. To make your offer as strong as possible, get started on your mortgage prequalification today.