Housing Gets D+ in Latest John Burns Report Card
The US Housing Market got a grade of D+ in the monthly John Burns Real Estate Consulting (JBREC) report card. The housing supply received a grade of F; steady from last month, albeit at very low levels, JBREC said. New home completions were down, but housing starts were up. “Although vacancy rates in the US have improved in recent quarters, the majority of the US remains oversupplied compared to history. Just six states in the US are currently undersupplied — Oklahoma, Wyoming, New Mexico, North Dakota, South Dakota and Alaska,” JBREC said. “The homeowner vacancy rate increased again in the fourth quarter of 2009 to 2.7%, which is up from 2.6% in the third quarter.” While the data and research firm said most of the leading indicators signal positive job creation is getting ready to occur — thanks in no small part to the approximately 1.2m temporary workers the Census Bureau will employ for the 2010 census — the length of unemployment in the labor force is still hovering near 30 weeks and JBREC gave overall economic growth a grade of D+. Most economic growth has been a result of government stimulus, JBREC said. Affordability got a grade of C-, an improvement from February’s report due to generally declining median home sales prices throughout the country. “Affordability is so good that owning the median-price home is now less expensive than renting the average apartment,” JBREC said. However, consumer behavior worsened this month, earning a grade of D. Outstanding credit per household as dropped 10.4% to $7,752 over the past year and the personal savings rate increased to 4.8% in March, as consumers continue to tighten their belts. The existing home market got a grade of D+, as the median price and sales volume fell, and the months of supply increased. While the previously expiration date of the homebuyer tax credit led to a surge in closings in November, that wasn’t sustained into the winter. A brighter note in housing was the new home market, which improved this month, earning a C- from JBREC. While reported sales were down, JBREC said those projections may be off. Noting that its builder confidence index increased, the seasonally adjusted new home sales volume fell to 309,000 transactions, declining 6% year-over-year. “[B]ut the sample size used by the Census Bureau to calculate this metric is extremely small and the [JBREC] confidence interval is quite large.” Write to Austin Kilgore.