A strong housing market gained momentum in November and is expected to continue through 2013, especially with low mortgage rate, which will keep affordability high, according to the BBVA Compass (BBVA) US Weekly Flash analysis.
The Housing Market Index rose to 46 compared to 41 October, which is the highest level since 2006. The jump is a result of homebuilder’s confidence in the housing market. New home sales and construction are expected to continue on a strong trend throughout the remainder of the year.
However, the index of potential homebuyers did not change between October and November.
Existing home sales increased 2.1% to 4.79 million, with most of the strength centered in the West region, up 4.4% and the South region, up 2.1%. Sales in the Northeast decline 1.7% as an impact of Hurricane Sandy.
Click on the graph to view existing home sale trends.
Supply of the existing homes on the market is down to 5.4 months in October as a result of constrained supplies, which is limiting immediate sales. While median sales prices increase, it was not enough to offset the declines from the last three months.
Housing starts rose 3.6% in October following a 15.1% leap in September. Multifamily housing is up 26.4% in September and 11.9% in October.
Building permits declined 2.7% after a large increase from last month. Although there was a decline, permits are still slightly below the highest level of the recovery so far.
Click on the graph to view housing starts and building permit trends.
For the remainder of the month there is expected impact from Hurricane Sandy on the Northeast region. However, the effect is projected to be positive. The complete restoration and rebuilding of properties will effect upcoming housing starts, according the analysis.