Data from the Census Bureau and the Department of Housing and Urban Development [HUD] indicates new homes sales in May fell by 7.8% (626,000 at an annualized pace from April’s upwardly revised rate of 679,000.) This represents a new 5-month low. The temptation is to interpret the lower numbers to mean the economy is slowing down, but actually the market is being affected by the shortage of skilled labor and higher material costs. According to these recent numbers, May’s level sits 3.7% lower than a year ago.
Many of the inflated markets have seen the median sales price of new homes fall 2.7% from a year earlier to a new average of $308,000.
New Jersey’s median sales price for single-family homes has increased year-over-year from May 2018 by 6% to $330,000 and the average sales price for single-family home has also increased by 4.6% from $393,000 to $412,000.
The concern over the retreat of new home sales occurs in light of falling mortgage rates, which appear to not make up the difference in the number of new home sales. According to the Census Bureau and HUD, the seasonally-adjusted estimate of new homes for sale nation-wide by the end of May was 333,000 representing a supply of 6.4 months at the current sales rate. This 6-month level of inventory for new homes is considered to be a healthy supply level. In contrast, New Jersey’s strong real estate market reflects the continued demand for housing with the total number of homes for sale falling over 3,000 units (7.8% to 37,173 in May) or 5.3 months supply.
Zillow Economist Matthew Speakman said despite a step backward in single-family housing starts, builder confidence remains strong, and a recent uptick in single-family permits indicates better days are coming.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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