How July’s Real Estate Trends Affected Buyers

By Gino Blefari

In July, the real estate market faced a housing-inventory challenge with several reports showing an increase in home prices and decrease in home sales. For example, CoreLogic Case-Shiller reported home prices rose 5.6%, setting an all-time high for the sixth consecutive month. And the National Association of REALTORS® said existing home sales were down 1.8%.

These numbers may give some pause at first glance, but considering the basics of supply and demand, it’s clear the number of sales have decreased due to a small pool of available homes paired with a high number of potential buyers on the market. This shows us that home prices that steadily increase box many home seekers out of the market.

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Stephen Speaks: Builder Confidence

Builder confidence for newly built single-family homes slipped three points to 62 in November from an upwardly revised October reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The pullback is from an unusually high October reading. Still, builder confidence has hovered in the 60s for six consecutive months reflecting housing’s longer-term progress.

“Looking at these numbers this year has been like driving from house to house in a very nice neighborhood,” said Stephen Phillips, president of Berkshire Hathaway HomeServices. “Today’s number indicates slight variation in a very positive range, since anything above 50 indicates continued expansion. And we’re solidly above last year at this time. Nothing surprising, and a good report, overall.”

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Stephen Speaks: U.S. Housing Starts

On Tuesday, the Commerce Department reported that U.S. housing starts rose to a nearly 8-year high. Construction of new homes jumped 6.5% from August figures to a seasonally adjusted annual pace of 1.21 million units in September. This increase was bolstered by an 18.3% surge in multifamily units, though starts of single-family homes didn’t show as much strength, increasing only 0.3%. Stephen Phillips, president of Berkshire Hathaway HomeServices, weighed in on the latest figures:

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