Home builder confidence rose for the second consecutive month in October, reaching a four-month high, according to the latest data released This Week in Real Estate from the National Association of Home Builders. All three Housing Market Index components showed gains in October. The U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported a 2.7% increase in single-family housing starts in September, marking a 10.1% year-over-year rise. Additionally, single-family permits saw a 0.3% increase from the previous month. Fannie Mae’s Q3 Home Price Index indicated a 5.9% increase in single-family home prices compared to Q3 2024. According to ATTOM’s Q3 2024 U.S. Home Sales Report, homeowners who sold single-family homes or condos in the third quarter realized an average profit margin of 55.6%, or $128,700, which is a 2.7% increase from the same quarter the previous year. This figure remains close to the all-time high of $135,000 recorded in 2022. The typical profit margin represents the percentage difference between the median purchase price and the resale price. Below are key events from the third week of October impacting our business: SINGLE-FAMILY STARTS TREND HIGHER IN SEPTEMBER. With the Federal Reserve beginning an easing of monetary policy and builder sentiment improving, single-family starts posted a modest gain in September while multifamily construction continued to weaken because of tight financing and an ongoing rise in completed apartments. The September reading of 1.35 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 2.7% to a 1.03 million seasonally adjusted annual rate. On a year-to-date basis, single-family construction is up 10.1%. The multifamily sector, which includes apartment buildings and condos, decreased 9.4% to an annualized 327,000 pace. Overall permits decreased 2.9% to a 1.43-million-unit annualized rate in September. Single-family permits increased 0.3% to a 970,000-unit rate. Multifamily permits decreased 8.9% to an annualized 458,000 pace. The number of single-family homes under active construction totaled 642,000 in September. After stabilizing recently, this is down just 4.5% from a year ago. Read the full story here.HOME PRICE GROWTH SLOWS BUT REMAINS ROBUST. Single-family home prices increased 5.9 percent from Q3 2023 to Q3 2024, a deceleration compared to the previous quarter’s downwardly revised annual growth rate of 6.4 percent, according to the latest reading of the Fannie Mae Home Price Index (FNM – HPI). The FNM-HPI is a national, repeat-transaction home price index measuring the average, quarterly price change for all single-family properties in the United States, excluding condos. On a quarterly basis, home prices rose a seasonally adjusted 1.3 percent in Q3 2024, down from the revised 1.4 percent growth in Q2 2024. “Despite decelerating slightly, home price growth remained robust in the third quarter, as the supply of homes for sale, particularly on the existing side, remained weak relative to historical levels,” said Mark Palim, Fannie Mae Senior Vice President and Chief Economist. “In September, high home prices supplanted high mortgage rates as the top reason for our survey respondents’ overwhelming pessimism toward homebuying conditions. Overall, the strength of this latest home price reading confirms the ongoing challenges with tight supply; however, the index’s continued deceleration shows that we’re slowly moving toward a better balance between supply and demand.” Read the full story here.HOME SELLER PROFIT MARGINS REMAIN HIGH BUT DIP DOWN QUARTERLY AND ANNUALLY. ATTOM released its third-quarter 2024 U.S. Home Sales Report Thursday, which shows that homeowners earned a 55.6 percent profit margin on typical single-family home and condo sales in the United States during the third quarter. That figure was down by small amounts both quarterly and annually, dipping by one percentage point from the second quarter of 2024 and two points from the third quarter of last year. The leveling off of prices during the third quarter also led to typical raw profits for sellers staying about the same, near an all-time high of just under $130,000. The raw profit on median-priced home sales nationwide, measured in dollars, slipped 0.9 percent during the months running from July through September of this year, to $128,700. But it was still up 2.7 percent from the third quarter of 2023 and remained near the record of $135,000 hit in 2022. Nationwide, the median price of single-family homes and condos rose from the second to the third quarter of 2024 by just 0.2 percent after spiking 7.4 percent in the Spring. But it still hit a new record of $360,500, up from $359,900 in the prior three-month period. The latest median was up 5.3 percent from $342,500 in the third quarter of last year. Homeowners who sold in the third quarter of 2024 had owned their homes an average of 8.09 years. That was up from 7.82 years in the second quarter of 2024 and from 7.74 years in the third quarter of 2023, marking the fifth increase in the last six quarters. Read the full story here.
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