New-Home Sales Point to Energized Construction Industry

Here is some welcome news for Bay Area homebuyers: Sales of new single-family homes in the West jumped 20.5 percent from October to November — evidence of a newly energized construction industry that has been playing catch-up for several years now to meet the pent-up demand for housing, especially in Northern California.newcondos

The latest numbers from the Census Bureau and the U.S. Department of Housing and Urban Development show the biggest increase in new-home sales were in the 11 westernmost states. November’s 20.5 percent increase in sales, month over month, compares with a 4.5 percent increase in the South, an 8.6 percent decrease in the Midwest, and a 28.6 percent plunge in sales in the Northeast.

New-home sales in the West were also up 4.7 percent from a year earlier.

“It is encouraging to see new-home sales continue to tick upward” said Tom Woods, chairman of the National Association of Home Builders (NAHB), in a statement. “Builders are also increasing their inventory even as they face difficulties accessing lots and labor.”

The new-home sales data followed other federal housing reports that also pointed to a recovery in the home-construction industry:

  • Single-family home construction starts in November were up 15.1 percent from October in Western states, nearly double the 7.6 percent increase nationwide, according to the Census Bureau and HUD. The overall 7.6 percent increase in single-family home construction was the strongest gain since January 2008.
  • Additionally, homebuilding permits jumped 21.7 percent in the West and 11 percent nationwide.

“Single-family production this month has reached levels last seen before the Great Recession, an indicator that we are making gradual headway back to a normal housing market,” said NAHB chief economist David Crowe, in a separate statement. “As we close out the year, we can see that the housing sector has made headway in 2015, and we expect the recovery to continue at a modest pace.”

(Photo: Flickr/Bengt Nyman)