Login | Sign Up |
Logo
MENU
  • Property Search
  • Featured Homes
    • New on The Market
  • Buyers
    • Property Search
    • Dream Home Concierge
    • Mortgage Rates
    • Mortgage Calculator
    • Get Prequalified
  • Sellers
    • Home Values
    • Sold Listings
    • How We Market Your Property
  • Neighborhoods
  • About
  • Testimonials
  • Contact
  • Our Blog
  • Property Search
  • Featured Homes
    • New on The Market
  • Buyers
    • Property Search
    • Dream Home Concierge
    • Mortgage Rates
    • Mortgage Calculator
    • Get Prequalified
  • Sellers
    • Home Values
    • Sold Listings
    • How We Market Your Property
  • Neighborhoods
  • About
  • Testimonials
  • Contact
  • Our Blog

Leading Indicators Point To More New Homes

Leading Indicators Point To More New Homes

June 29th, 2015

We’re all happy to see the Real Estate market continue to strengthen, but when homes are selling so well, the possibility of inventory shortages becomes a potential hurdle to overcome.  The good news is, it looks like the home builders are hard at work to keep up with demand.

It’s important to keep track of what the construction industry is doing, not only to see how much new inventory builders are creating and how that factors into the supply / demand equation, but also as a predictor of what’s coming in the future, and where some of the industries tied to housing think things are headed.  There are several leading indicators we can follow, and when it comes to looking at how we’re doing in creating new inventory to match demand, we only need to look at the latest housing starts and permits.

In June, housing starts (groundbreakings on new home construction) jumped 26.6%.  Permits to build new homes rose 30% compared to last June.   Both of these numbers reached 8 year highs, which shows the confidence the home builders have in the upcoming demand for more home sales.  In fact, the National Association of Home Builders / Wells Fargo Housing Market Index reports that “Builder Confidence” hit a level of 60 in June.  A reading of 50 or higher means that more builders rate conditions as good versus poor.  For comparison, the housing market hasn’t seen a builder confidence number that high since 2005.

To look for other indications of the strong construction market tied to housing, we can always keep an eye on the good old stock market.  Although less directly tied to housing (the market will always fluctuate more with investor confidence and the broader economy), it’s still a good barometer when we examine specific industries that are related to Real Estate and home building.

As of the end of June, the Building Products Industry in the Industrials market sector is up 6.06% for the year, versus the virtually flat S&P 500 ( -.06% Year to Date).  Building Products tracks manufacturers of building components, home improvement products, and equipment.   The Construction Materials Industry (which includes cement, concrete, brick and other basic materials) is tracking up 29% for the year!  

This is all great news, considering how badly we need new housing.  Economists say that we need about 1.5 million units of new housing annually to bring supply back in line with demand, so we need to see the builders continue to churn out the groundbreakings and  keep up with this surging market.

If you’re interesting in getting into a new home yourself, or have any other Real Estate needs contact us today!

Share on:

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Previous Post:
Conflicting March Sales Numbers: What Do They Mean?
Next Post:
Shrinking Inventories = Rising Prices
Don Alexander
Don Alexander
REALTOR
619-581-4255
1stprimerealty@gmail.com
CA DRE LIC. 01456248
Recent Posts
  • Auto Draft
  • An agent you can rely on.
  • Budget Consideration
  • Expert Negotiators
  • The Closing Process
Categories
  • Real Estate News
  • Social Media Posts
  • Uncategorized
Recent Comments

    Featured Listings

    Questions? Ask Here!

    © 2021 Don Alexander, 619-581-4255, CA DRE LIC. 01456248, 270 E. Douglas Ave, El Cajon, Ca. 92020, CA DRE LIC 01456248
    Websites for REALTORS