The number of owner-occupied homes rose in the second quarter for the first time since the third quarter of 2010, signaling that a housing market dominated by renters is leaning toward buyers again.
The Census Bureau reported that the number of the owner-occupied homes rose by 126,000 units in the second quarter after falling by 490,000 units in the first quarter.
Overall, the total number of households rose by 807,000 units in the second quarter since the second quarter of 2011. Roughly 685,000 of the newly formed households are renters.
However, the chief economist for the National Association of Home Builders noted that quite a bit of single-family REO is being turned into rentals, which is helping reduce the excess supply of foreclosed properties on the market. “This is absorbing the supply in an indirect way and that’s very encouraging,” chief economist David Crowe told National Mortgage News.
The number of vacant homes for sale totaled 1.6 million at the end of the second quarter, down by 364,000 homes from a year ago.
“The bottom line is the vacancy rate is a bit elevated from its historic levels. But the continued shift downward is good news. It means particularly fewer distressed homes on the market,” Crowe said.
Markets with high concentrations of low-priced REO properties are not conducive to homebuilding.
The recovery in new-home sales is taking place in “calmer markets” that are improving and didn’t experience “dramatic price spikes and construction bubbles,” he said in an interview Monday.
Although new-home sales unexpectedly fell 8.4% in June after hitting a two-year high in May, the chief economist still expects sales will be up 20% at the end of this year.
NAHB economists are forecasting 370,000 in new-home sales this year, up from 307,000 in 2011—the worst year on record.
