Increased Demand For New Homes and Upward Home Prices: A Great Summer
Twin Cities, Minnesota (PRWEB) July 24, 2013 -- A new housing study says the Twin Cities economy looks to be very strong and the new home construction is on track to grow through out 2013. Metrostudy, a national housing data and consulting firm, stewards the most extensive primary database on U.S. residential construction and conducted the study. Metrostudy predicts new home starts will continue to increase over the next couple months as more housing units are completed and the demand for more newly constructed homes continues.
"Twin Cities home builders are in a flurry of activity to keep up the building pace," says Jenna Thuening, owner of Home Destination. "Successful in spite of factors of cost, availability of building materials, too few lots, and a labor shortage, home builders are increasingly confident of the solidity of our current marketplace."
The Twin Cities current employment estimates report approximately 49,500 new jobs available over the past 12 months. Education and Health Care industry jobs continue to be an area of strong and steady growing employment sectors. The local unemployment rate continues to remain one of the lowest of all states, among major metropolitan areas, currently sitting at 4.7%. Homeowners who have jobs are more confident they can support a new home mortgage and therefore, are able to purchase another home that better meets their current housing needs.
Metrostudy's quarterly survey of national housings state found the following:
- 1,730 new homes were started in 2Q13, up +54.3% from last quarter
- That is +46% from 2Q12 when 1,184 homes were started
"While the rate of growth in new construction over the past twelve months was likely being held back by the lingering impacts of the stagnant economy, the next twelve months will present new challenges as lot and labor shortages will likely constrain the new home construction market," stated Ryan Jones, director of Metrostudy’s Twin Cities division..
As the month of June 2013 closed, new monthly housing statistics are as follows:
- Houding inventory levels are at 2,765 new housing units
- That is up 13% from last quarter
- The total 2,139 units is comprised of (77%) under construction, 395 (14%) are finished vacant inventory, and the remaining 231 (8%) are model homes
- Housing supply fell compared to last year, remaining at 6.7 months. * Finished inventory months of supply sits at slightly below one month, which is actually below equilibrium, considered to be between 1.5-2.0 months
Twin Cities housing inventory draws upon the supply of vacant lots. As the demand for new housing starts continues upward, the need is for substantial lots available across the metro in order to meet home buyer demand. Metrostudy's report shows:
- A decline of 12% compared to last year at 10,812 vacant developed lots throughout the metro seven counties
- This represents a decline of 18.1% compared to last year
- Lot supplies in the seven county Twin Cities area are down to a mere 28.2 months supply
U.S. house price continue to climb this Spring and Summer, rising 0.7 percent on a seasonally adjusted basis over May of 2012, according to the Federal Housing Finance Agency (FHFA) monthly House Price Index (HPI). The May HPI change showed the the sixteenth consecutive monthly home price increase in the purchase-only, seasonally adjusted index. The previously reported 0.7 percent increase in April was revised downward to a 0.5 percent up tick. Compared to May 2012, house prices were up 7.3 percent in May.
"Minneapolis home builders have stepped up production levels of building of new residential homes. It has been a very positive year so far," adds Thuening. "With both Twin Cities home prices and our low housing inventory being bolstered from a higher number of new home starts, both real estate sellers and buyers are pleased."
“The outlook for housing continues to brighten as builders respond to increased demand for new
homes and rental apartments,” said National Association of Home Builders (NAHB) Chairman Rick Judson.
Home Destination helps families with plans for buying a home make informed decisions and guides them thorough the process. If you are looking to buy a Twin Cities new construction home, call Jenna Thuening at 612-396-7832 and gain an expert guide.
Jenna Thuening, Home Destination, http://www.homedestination.com, 612-396-7832, [email protected]
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