This Week in Real Estate: November 6, 2017

Good Morning!

Favorable news This Week in Real Estate from the U.S. Census Bureau regarding homeownership. For the second time in 2017, homeownership has increased. In other news, as inventory constraints still exist in most markets across the country, the fact that new construction spending is well ahead of last year provides some optimism that supply may start to relieve the pressure of demand. Below are a few highlights from the last week of October that influence our business:

* Homeownership Rate Improves For Second Time in 2017. The homeownership rate improved to 63.9 percent in the third quarter—the second time it has inched up this year, slightly topping 63.7 percent in the second quarter and 63.5 percent this time last year, according to the U.S. Census Bureau’s recent Quarterly Housing Vacancies and Homeownership report. Approximately 87 percent of housing was occupied in the third quarter, with 55.7 percent owner-occupied and 31.4 percent renter-occupied. Owner-occupied and renter-occupied housing accounted for 55.5 percent and 31.6 percent shares, respectively, in the second quarter of this year, and 55.5 percent and 31.8 percent shares, respectively, in the first quarter. The homeownership rate in the third quarter was again highest in the Midwest, at 69.1 percent, and the South, at 65.5 percent. The rate in the Northeast was 60.4 percent, while the rate in the West was 58.9 percent.
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* Metro Home Prices Maintain Fast Growth in Third Quarter; Rise 5.3%. Severely lacking inventory levels across the country pinched sales growth and kept home prices rising at a steady clip in nearly all metro areas in the third quarter, according to the latest quarterly report by the National Association of Realtors. The national median existing single–family home price in the third quarter was $254,000, which is up 5.3 percent from the third quarter of 2016 ($241,300). Single–family home prices last quarter increased in 92 percent of measured markets, with 162 out of 177 metropolitan statistical areas (MSAs) showing sales price gains in the third quarter compared with the third quarter of 2016 (the most since the second quarter of 2015, at 93 percent). In the West, existing–home sales increased 2.8 percent in the third quarter and are 1.9 percent above a year ago. The median existing single–family home price in the West increased 7.0 percent to $373,700 in the third quarter from the third quarter of 2016.
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* Single Family and Multifamily Construction Spending Post Gains. NAHB analysis of Census Construction Spending data shows that total private residential construction spending stood at a seasonally adjusted annual rate (SAAR) of $515.4 billion in September, virtually unchanged from downwardly revised August estimates. The total private residential construction spending was 9.6% higher than a year ago. Residential spending was flat for the month but is still running well ahead of the 2016 pace, especially that single-family number. Single-family construction was up 0.2 percent month-over-month to a rate of $265.59 billion, but that contributed to the 11.9 percent annual growth. On an unadjusted basis, residential spending in September, at $46.41 billion, represented more than half of the total $83.57 billion spent on all privately funded construction. Residential spending through August came to $345.71 billion, up 11.7 percent over the same period last year. Single family construction spending for the month was estimated at an unadjusted $24.73 billion and multi-family at $5.261. Year-to-date spending in the two categories was 8.9 percent and 4.3 percent higher than during the same period in 2016.
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Have a productive week.


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