Increased housing authorizations and maintenance spark inventory
More buyers could be in the market for new homes as housing authorizations and maintenance volume increased while remodels fell, according to BuildFax.
The property data provider's latest Housing Health Report showed single-family housing authorizations grew by a seasonally adjusted 6.53% year-over-year in August — a similar figure to the latest housing start projections from Fannie Mae. It also marked a 0.4% seasonally adjusted increase from July.
"These trends suggest that we are still in a healthy housing market, but the rate of growth is slowing," said BuildFax COO Jonathan Kanarek in a press release.
Housing inventories rising to meet the high demands would lead to mortgage applications climbing from 18-year lows. As interest rates gain steam with their biggest jump in four years, lenders most likely anticipated this shift.
"With existing housing maintenance and remodels still at historic highs, consumer confidence in the existing housing stock remains strong. From January to August of 2018, for example, remodel spending alone increased 5% compared to the same time period last year. We will continue to monitor these key indicators to determine if we are headed toward a general plateauing of the market," Kanarek continued.
Housing maintenance volume increased its annual rate by 1.08% while maintenance spending increased 10.75% year-over-year from August 2017. Homeowners could be biding their time as they search for new places to live.
However, fewer homeowners are pouring money into remodeling their homes than last year. The annual rate of remodel volume decreased by 1.39% and remodel spending decreased at a year-over-year rate of 10.34%.