Buyers Returning, Home Builders Say
Steep home price declines in key real estate markets have brought housing affordability back into reach for many Americans, the National Association of Home Builders said Tuesday. The group said that 55 million families, equal to half of all U.S. households, can now afford a median-priced new home at $200,000. "That's an increase of 17 million households from conditions just two years ago, and the best housing affordability number we have seen in years," said NAHB chairman Joe Robson, a home builder from Tulsa, Okla. "We are now seeing the first signs that buyers are returning to the marketplace." Robson's optimism is borne less from hard data than from anecdotal evidence, however -- and builders, of course, have a vested interest in talking up a housing recovery wherever possible. He said reports from "builders in the field indicate that foot traffic in new homes is one the rise, and consumer interest is increasing with each passing day." The NAHB and home builders are also pinning their hopes on an $8,000 first-time home buyer tax to stimulate demand among new home sales, as well. The NAHB said that during Feb. and March, 1.5 million consumers visited a website developed by the organization to explain the tax credit, which expires at the end of November. In terms of hard numbers, there have been at least some reasons for guarded optimism recently. Single-family permits were up 11 percent in February, while both new and existing home sales have also posted gains as well -- although such monthly gains may largely reflect seasonal trending, and annual numbers remain largely negative. Likewise, the inventory of new homes remains historically high, well above 12 months supply; most economists suggest a normal range of supply should be in the 5 to 6 month range. Nonetheless, Robson said he expect buyers to begin to return to markets. "With home values in many markets at the lowest level since 2003, an $8,000 tax credit available to first-time home buyers, fixed-rate mortgages under 5 percent, and an outstanding selection of homes to choose from, buyers are starting to recognize that this has the makings for a one-time opportunity to break into the market," said Robson. Of course, builders also told buyers during the boom that they faced a one-time opportunity to buy before the market ran too far ahead of them -- meaning that while there are some cautious signs of a spring thaw in some housing markets, that evidence is countered by other evidence suggesting the housing correction yet has further to run. The May 2009 issue of HousingWire Magazine, hitting subscriber's mailboxes in a few short weeks, will take a look at the five key metrics critical to watch for a bottom in housing. No spin-tastic analysis from home builders, realtors, or mortgage bankers allowed. Don't subscribe? Click here. Write to Paul Jackson at firstname.lastname@example.org.