New home prices rise at strongest rate on record
- Blog Post by: Jim Buchta
- May 23, 2013 - 10:59 AM
Furthering a trend that begin in early 2011, new home sales across the country increased to a 454,000-unit annualized pace last month, with year-over-year prices posting the strongest rate on record, according to new data from the U.S. Census Bureau.
Economists at Wells Fargo Securities say that a 2.3 percent increase in sales from March to April exceeded analyst expectations. On a year-over-year basis, sales were 27 percent higher last month.
Here's the take from Wells: "Lean inventory levels and lessening competition from distressed properties continue to be a positive development to new home prices, which surged to a record-high and are up 14.9 percent year-over-year. Moreover, this impressive price gain also reflected the increase in sales of homes costing $400,000 or more as the purchases of homes priced less than $300,000 fell on the month."
The U.S. report doesn't include local or statewide new home sales data, but here's what Ryan Jones of the Twin Cities office of Metrostudy had to say about the state of the local construction industry in his quarterly report (reported here at JustListed earlier this month): The Twin Cities area started 1,135 new homes in 1Q13, down 13 percent from 4Q12, but up 53 percent from 1Q12 when just 740 homes were started.
"For the fourth straight quarter the Twin Cities housing market surpassed 1,000 new home starts for the quarter," said Jones.
The rate of annual new home starts for single-family and townhome units across the Twin Cities area is at 5,022 new units. This is an increase of 56 percent compared to 2012 and represents the highest annual starts pace since 2008. "The new home market is continuing to show consistent growth with annual increases in new home demand occurring in each of the last seven quarters, "said Jones.
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