Builders Club Rewards Cleveland May 2022

Page 22 | Builders Club Rewards | www.buildersclub.com News Declining A ff ordability Conditions Put a Damper on New Home Sales Worsening a ff ordability conditions stemming from growing supply chain disruptions and ris- ing mortgage rates pushed new home sales lower in March. Sales of newly built, single-family homes in March fell 8.6% to a 763,000 seasonally adjust- ed annual rate from an upwardly revised reading in February, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. New home sales are down 12.6% compared to March 2021. “Growing a ff ordability challenges are slowing new home sales and taking a toll on the housing market,” said Jerry Konter, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Savannah, Ga. “Mortgage rates jumped nearly a full percentage point between the end of Feb- ruary and March and builders continue to face escalating construction and development costs which are putting upward pressure on new home prices.” “Buyers are facing sticker shock due to deteri- orating a ff ordability conditions and a lack of existing home inventory,” said NAHB Assistant Vice President of Forecasting and Analysis, Da- nushka Nanayakkara-Skillington. “Only 14% of new home sales in March were priced below $300,000. A year ago, it was 34%.” A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, un- der construction or completed. In addition to ad- justing for seasonal e ff ects, the March reading of 763,000 units is the number of homes that would sell if this pace continued for the next 12 months. New single-family home inventory was up 52.4% over last year, rising to a 6.4 months’ sup- ply, with 407,000 available for sale. However, just 35,000 of those are completed and ready to occupy. The median sales price rose to $436,700 inMarch from $421,600 in February and is up more than 21% compared to a year ago, due primarily to higher development costs, including materials. Regionally, on a year-to-date basis, new home sales fell in two regions, down 9.2% in the Mid- west and 13.9% in the South. New home sales were up 10.5% in the Northeast and 8.5% in the West. Millennial Home Buyers Want Larger Homes, Survey Shows As the housing industry celebrates New Homes Month in April, millennials say their housing preferences have changed due to the COVID-19 pandemic. More than a third (36%) of millenni- als are now in favor of a larger home and home builders are responding to this trend. According to the Census Quarterly Starts and Completions by Purpose and Design and Na- tional Association of Home Builders (NAHB) analysis, the median size of new single-family homes in 2021 was 10% higher since the Great Recession (2009) at 2,303 square feet. The shift aligns with NAHB’s home buyers’ preferences analysis, which shows millennials and Gen Xers prefer more bedrooms and are also interested in exercise rooms and home o ffi ces. “The home building industry expects to see home sizes continue to increase due to a shift in consumer preferences as more activities are taking place in the home in the post-pandemic environment,” said NAHB Chairman Jerry Kon- ter, a builder and developer from Savannah, Ga. “Builders are trying to keep up with demand, but higher construction costs are hindering housing a ff ordability.” NAHB’s fourth quarter 2021 Housing Trends Report revealed that buyer availability expec- tations worsened throughout the year across all generations. Only 34% of millennials expected that fi nding a home would be easier in the months ahead and a majority (67%) of active buyers are spending more than three months looking for a home. According to recent data by the U.S. Depart- ment of Housing and Urban Development and the U.S. Census Bureau, the median new homes sales price in February was $400,600, up 10.6% compared to a year ago. New home prices have increased as building materials and other devel- opment costs have climbed due to supply-chain issues and elevated in fl ation pressures. In addi- tion to construction cost challenges, higher mort- gage rates in 2022 will further reduce housing a ff ordability conditions. To address the a ff ordability crisis, NAHB is call- ing on policymakers to seek immediate reme- dies to the lumber and building materials supply chain bottlenecks that will increase production and lower construction costs. Home buyers can access home buying and home building information and resources at nahb.org . Use your Builders Club Points today at www.buildersclub.com Enjoy a free trip to Hawaii , travel your way, or select from more than 20,000 merchandise items !