New Home Sales Decline Due to Higher Costs
After a significant downward revision for the preliminary March data, April recorded a decline of 5.9% for sales of newly-constructed single family homes, according to estimates from the Census Bureau and HUD. The April seasonally adjusted annual rate (863k) was the lowest since June 2020, with the exception of a weather-influenced February report.
Residential demand continues to be supported by low interest rates, a renewed consumer focus on the importance of housing, and solid demand in lower-density markets like suburbs and exurbs. However, higher building costs, longer delivery times, and general unpredictability in the residential construction supply-chain are now having measurable impacts on new home prices. In April, the median price of a newly-built home was 20% higher than a year ago, at $372,400. As NAHB has estimated, higher lumber costs alone are increasing new home prices by $36,000 on average.
Higher costs have priced out buyers, particularly at the lower end of the market. A year ago, 45% of new home sales were priced below $300,000. In April 2021, only 27% of new home sales were priced below $300,000.
Looking back to the spring of last year, the April 2020 data (570,000 annualized pace) marks the low point of sales for the 2020 recession. The April 2020 rate was 26% lower than the prior peak, pre-recession rate set in January. Sales then mounted a historic surge from April until July, outpacing gains in actual construction. Sales have been above the pace of the post-Great Recession trend since the second half of last year. However, since January the trend has been declining and approaching the prior long-run growth trend (as indicated by the blue dashed line in the graph above).
Sales-adjusted inventory levels remained lean in April, coming in at a 4.4 months’ supply.
Completed ready-to-occupy homes continue to fall as a share of new home inventory. Such homes were 24% of inventory a year ago. They are only a little more than 11% of the total in April 2021.
Moreover, to see how sales patterns have changed in a high demand, low supply market — a year ago, 42% of new home sales were completed construction. In Apr 2021, this share has fallen to 27%. A year ago, 21% of new home sales had not started construction yet. In April 2021, such speculative homes represented 38% of sales contracts.
Regionally on a year-to-date basis new home sales rose in all four regions, up 50.7% in the Northeast, 45.7% in the Midwest, 45.5% in the South, and 3.6% in the West. These significant increases are due in part to lower sales volume during the Covid crisis a year ago.
How Media Consumption Has Changed Over the Last Decade (2011-2021)
Media Consumption in 2021
There are a wide array of apps and life hacks out there designed to help regulate personal internet use and media consumption, but the data suggests they haven’t been working. Today, we consume more media than at any point in time in the last decade.
This data from Recode looks at how many minutes U.S. adults spend on various forms of media, comparing mobile, desktop, radio, television, and magazines.
How Many Minutes are Spent on Media?
In 2021, collective media consumption continues its upward trajectory, and is set to be at the highest it’s ever been. In 2021, overall media consumption among U.S. adults is estimated to be around 666 minutes per day, or 11.1 hours—a 20.2% increase from 2011.
Although media consumption has grown overall, this is predominantly driven by mobile usage. In fact, every category with the exception of mobile has shrunk from their respective peaks. Mobile on the other hand, has grown a whopping 460% in 10 years, from an average daily use of 45 minutes to a staggering 252 minutes.
Consumption by Generation
Disparities in media consumption have a generational aspect that’s worth noting, as well. For instance, older Americans like Baby Boomers still consume media routinely through television. On the other hand, younger cohorts like Millennials and Gen Z tend to consume more through mobile.
Increasing internet use has come with criticism, and is said to be partially responsible for our waning attention spans. With only 1,440 minutes in a day, it remains unknown exactly how many minutes we will continue to direct towards mobile use. But with figures growing 9% last year, we may not have yet reached the peak.
Massachusetts Real Estate Investors Association
PO Box 307, Marblehead, MA 01945, USA
(7:01am) Good morning,
Kris has determined, with an Algorithm, what the sale price will be for Real Estate Properties on the Market. She's also targeted great investment opportunities in Massachusetts, outside of Boston.
Tomorrow evening Friday, May 7, 6:30-8pm she'll teach YOU this information and more importantly, How to Use it!
We'll meet LIVE at Kelly's Roast Beef, 165 Endicott Street, Danvers MA 01923 Light refreshments and soft drinks provided. Only $5. for non-members (tip for our waitstaff). ALL State Covid-19 Protocols will be followed!
I look forward to see you there for Lincoln's Market Update, Kris's Algorithm & Opportune Areas & What we've all been working on!
Mike Hurney, Director, MassRealEstate dot net & NewHampshireREIA dot org Po Box 307, Marblehead, MA 01945
Good afternoon, Our next online meeting is on next Tuesday, 3/30/21 6:30-8pm
Mike Hurney is inviting you to a scheduled Zoom meeting.
Topic: Make the RIGHT Offer for BRRRR, Market, Finance trend, Short term, Insurance coverage!
Time: Mar 30, 2021 06:30 PM Eastern Time (US and Canada)
Join Zoom Meeting
Meeting ID: 874 2031 6768 Passcode: 795696
Vendors, Market update & Make an Offer.
Several times folks have told me of Property Losses, Short Term Rentals & Mortgages that they've "Researched". Then selected a company and Settled, Stayed at or Financed with however based on what they describe I'm sure they could've done better with Len, Liann & Mike - Vendors in our Association!
So they'll have short updates for us, so that we don't forget them in the Confusion of Needing them!!
Still a very hot market. I'm hearing Tales of Sales that go $50k, $65k and $80k above the Listed price! Lincoln'll be showing us the Stats.
People still describe to me how they make offers and I think it's time for a quick review "Making Offers 101" How to quickly Assess Values and know When to "Fold 'em"