Much like the rest of the economy, the housing market is slowly making monthly gains. The U.S. Census Bureau and the Department of Housing and Urban Development (HUD) reported today a 2.6% gain in housing production for April, hitting a seasonally adjusted unit total of 717,000. The gains came from a 2.3% increase in single-family units, which account for three quarters of the housing market, and a 3.2% increase in multifamily units.
“April’s increase in housing production comes on top of strong upward revisions to the previous month’s data, and is an encouraging sign that we are returning to a gradual, upward trend that should continue in the year ahead as builders respond to improving demand for new homes in certain markets,” Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. said in the NAHB’s press release.
The NAHB released its NAHB/Wells Fargo Housing Market Index (HMI) yesterday showing a five point increase in builder confidence for the month of May, which is the highest it has been in five years. The increase came after a downward revision for April.
“While home building still has quite a way to go toward a fully healthy market, the fact that the HMI has returned to trend is an excellent sign that firming home values, improving employment and low mortgage rates are drawing consumers back,” NAHB Chief Economist David Crowe said in a press release.
There were mixed gain reports across the country as the Midwest and South posted 6.7% and 11.6% gains, respectively, and the Northeast and West posted declines of 20.7% and 8.1%, respectively. The South has had some assistance from the Wells Fargo’s Neighborhood LIFT program, which is currently investing $30 million in the Florida housing market.
The Wells Fargo program was created to help potential homebuyers get into homes with down payment assistance. A recent study, however, by the University of Michigan showed the one in five families are in debt and that 4.1 million are still behind on their mortgage and that 36.9% of the American population have opted to rent homes.
The annual total number of houses sold since 2007 have consistently been on the decline. In 2007, there were 776,000 units sold, but fell to 305,000 for 2011. In accordance with the year’s first three months, the current projection for 2012 is 337,000.
-Dustin Bass, @dbass_cmn