Housing Starts increased in June, beating expectations for the 2nd straight month.
A “housing start” is a new home on which construction has started. Last month’s jump in single-family starts is the largest one-month jump since 2004.
June’s figures are the latest signal the country’s housing markets may be on the mend.
For home sellers, however, the news may not be so rosy. With more homes expected to come on the market, price competition among sellers could intensify and — all things equal — that would push sales prices lower.
So far in 2009, that hasn’t happened.
As home supply has grown, it’s been met by off-setting buyer demand. Spurred by low mortgage rates and an $8,000 first-time homebuyer tax credit, homebuyers appear to find today’s home buying conditions somewhat ideal.
As a result, purchase activity has been strong and first-time home buyers now account for 30% of existing home sales.
Rising Housing Starts can be a double-edged sword. It shows strength builders are more optimistic about the economy, but too much optimism can lead to a glut of unsold homes and could reverse the recovery’s momentum.
Posted by Scott Fowler. Scott is a Partner / Sr. Loan Officer with Horizon Financial. Scott can be reached toll free @ 877-627-9211 x 104 or email SFowler@HorizonFinancial.org. Visit Scott’s website @ www.ScottFowlerTeam.com
