According to the U.S. Census Bureau, the pace of new home sales rose in January, exceeding forecasts and revised the December stats to reflect a higher rate of home sales, all of which is good news for a suffering new home construction sector. This growth is in line with recent reports of builder confidence levels rising across the nation.
The inventory levels of new homes for sale fell, marking the eleventh consecutive month of decreasing supply levels. The current supply sold at the current sales pace represents a 5.6 month supply, down considerably from the 7.2 month supply just one year ago. Compared to January 2011, the number of new homes sold has risen 3.5 percent nationally with particularly strong sales in the South which has increased 15 percent.
The median number of months a new home sits for sale after completion is at 7.1 months, down from 7.4 months last January and down dramatically from the peak last summer of 10 months.
Meanwhile, even more American homebuyers are paying cash to acquire homes, according to a new survey from Campbell/Inside Mortgage Finance.
The group’s Housing Pulse Tracking Survey said between October and January, the number of homeowners purchasing residences with cash grew from 30.8% to 34.1%.
This trend is occurring at a time when mortgage rates are holding low. The survey noted that all-cash buyers are getting discounts of approximately 10%.
Homebuyers who turned to cash purchases are doing so because of the slow underwriting process late appraisals and long-wait times when dealing with certain loans, the report said.
In most areas of the country, it is taking about 60 days to close a non-troubled FHA loan. About 30 days longer than usually a year ago.
To release its report, the Campbell/Inside Mortgage Finance Housing Pulse Tracking survey interviewed 2,500 real estate agents across the country.