Builders are busy once again.
According to the Census Bureau, Single-Family Housing Starts rose to 453,000 on a seasonally-adjusted, annualized basis in June — a 9 percent spike from the month prior and the highest reading in 3 seasons.
A “Housing Start” is defined as a home breaking ground on new construction.
June’s reading is largest one-month jump since June 2009. The reading surprised Wall Street despite that the Homebuilder Confidence survey may have foreshadowed the results.
Monday, the National Association of Homebuilders reported that builders are more confident about the future of the new home sales market, and forecast a large increase in sales over the next 6 months.
For buyers of new construction, the news is mixed. Rising confidence may mean that builders in Chicago are less willing to negotiate on upgrades and/or price, but rising construction levels add inventory to an already fragile market.
Adding to the nation’s home supply without a corresponding increase in buyer demand shifts negotiation leverage away from builders.
The Census Bureau also reported on Building Permits.
In June, permits for single-family homes rose by 1,000 units nationwide on a seasonally-adjusted, annualized basis. This, too, bodes well for housing because 89 percent of homes with permits start construction within 60 days.
Momentum should carry forward into fall.
If you’re buying new construction in IL , ask your real estate agent about local home supply, and how the market is trending. With mortgage rates low and the fall buying season approaching, you may find some of your best deals in the next few weeks.