Nationwide housing production increased by 0.9 percent for the month of August, according to the National Association of Home Builders (NAHB). This translates to a seasonally adjusted annual rate of 891,000 units in August, according to figures from the US Department of Housing & Urban Development and the US Census Bureau.
Rick Judson, a homebuilder from North Carolina and chairman of NAHB said, “Overall, this is an encouraging report as builders are seeing pent-up demand begin to be released for single-family homes despite headwinds such as rising mortgage rates and tight credit conditions.”
Homebuilders should note that so-called market slowdowns like rising mortgage rates and the tough conditions for applying for credit are hardly setbacks to this builder’s market. This year has marked remarkable growth in multiple areas for homebuilders–production, sales, and improving markets. It’s possible that 2013 will be marked as the best year for homebuilders since the housing bubble burst.
“This is the kind of signal we’ve been looking for, with single-family starts and permits up or holding steady across every region in the nation,” explained NAHB Chief Economist David Crowe.
He furthered, “Today’s report is reflective of gradual improvement in buyer confidence in the overall market and our recent surveys that indicate a solid outlook for single-family production. On the multifamily side, we are catching up with underlying rental demand. We expect to see additional multifamily starts in the future, but not as rapid a pace of growth as we’ve seen in the past.”
Multifamily housing units soared in May, while single-family units slowly creeped up from behind. Now, we’re noticing slight dips in the multifamily market, while single-family units are at their peak. Though each type of housing production will continue to ebb with moderate ups and downs over time, it’s clear that the market has bounced back and is in a good place right now for both builders and buyers.
Builders benefit from the strong market which allows them to sell homes at slightly increased prices. Buyers see this benefit reflected from the builders who are able continue to develop new land, boost their confidence, construct more innovative homes, and, in turn, provide buyers with better products at values that are appropriate for the market.