By Dennis Norman, on May 10th, 2023 There were 3,920 building permits issued for new single-family homes in the St Louis area during the 12-month period ended March 31, 2023. This represents a decrease of 16.58% from the prior 12-month period, during which 4,699 permits were issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Six of the seven counties covered in the report saw a decline in building permits from the previous period, with five of them experiencing double-digit declines. In contrast, Franklin County saw an increase of over 4%, marking the 20th consecutive month of increases.
St Louis New Home Building Permits – March 2023
(click on table below for page with live charts showing additional permit data)
By Dennis Norman, on March 29th, 2023 There were 4,170 building permits issued for new single-family homes in the St Louis area during the 12-month period ended February 28, 2023, a decrease of 10.69% from the same period a year ago when there were 4,669 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Six of the seven counties covered in the report saw a decline in building permits from the same period a year ago with four of them experiencing double-digit declines. Franklin County, on the other hand, saw an increase of nearly 19%.
St Louis New Home Building Permits – February 2023
(click on table below for page with live charts showing additional permit data)
By Dennis Norman, on March 15th, 2023 There were 4,147 building permits issued for new single-family homes in the St Louis area during the 12-month period ended January 31, 2023, a decrease of 13.48% from the same period a year ago when there were 4,793 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Six of the seven counties covered in the report saw a decline in building permits from the same period a year ago with four of them experiencing double-digit declines.
St Louis New Home Building Permits – January 2023
(click on table below for page with live charts showing additional permit data)
By Dennis Norman, on January 25th, 2023 There were 4,361 building permits issued for new single-family homes in the St Louis area during 2022, a decline of 9.62% from 2021 when there were 4,825 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). As the table below shows, 4 of the 7 counties included in the report had a decline in the number of permits issued in 2022 from the year before, with there of them double-digit declines. Lincoln County saw the biggest drop percentage-wise with a decline of 38.27% followed by St Charles County at 21.8%. All of the increases seen in the 3 remaining counties were single-digit increases with Franklin County the highest with an 8.36% increase.
As the chart below the table illustrates, 2022 saw the lowest number of building permits for new homes issued since 2015 when were there 4,200 issued.
Continue reading “St Louis Area New Home Building Permits for 2022 at lowest level in seven years“
By Dennis Norman, on January 12th, 2023 There were 4,515 building permits issued for new single-family homes in the St Louis area during the 12-month period ended November 30, 2022, a decrease of 6.93% from the same period a year ago when there were 4,851 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Four of the seven counties covered in the report saw an increase in building permits from the same period a year ago with the largest increase (9.15%) coming in St Louis County.
St Louis New Home Building Permits – November 2022
(click on table below for page with live charts showing additional permit data)
By Dennis Norman, on December 21st, 2022 Even though the number of new home building permits in the St Louis area has been on the decline, they’re been on the increase in the midwest region of which St Louis is a part. As the chart below illustrates, for the 12-month period ended last month, there are been 2,850 building permits issued for new privately-owned housing units in the midwest region of the U.S. an increase of 3.6% from he prior 12-month period when there were 2,746 permits issued. For just the month of November 2022, there were 197 permits, down nearly 8% from November 2021 when 214 permits were issued.
New home construction starts on the rise as well…
Depicted also on the chart below is the number of new homes where construction has actually begun, referred to as “starts”. The number of starts always tends to be lower than the number of permits issued as there are many issues that could arise that would cause a home not to be built even though a permit was issued for it. One of those issues could be the developer or builder’s sentiment about the market which, if trending unfavorably, may cause the developer to postpone adding to inventory. However, even though we saw builder sentiment decline every month this year, the number of new home starts in the midwest region for the most recent 12-month period increased 5% from the prior 12-month period. There were 2,657 new home starts in the 12-month period ended last month compared with 2,523 starts during the prior 12-month period. For just November 2022, there were 215 starts, down just one from November 2021 when there were 216 starts.
Continue reading “New Home Construction In Midwest During Increased During Past 12 Months“
By Dennis Norman, on December 19th, 2022 The National Association of Home Builders (NAHB) released their NAHB/Wells Fargo Housing Market Index (HMI) report for December 2022 and, not surprisingly, it shows the builders are continuing to lose confidence in the market. In fact, builder sentiment has dropped every month during 2022, ending the year at an index value of 31, the lowest seen since the onslaught of COVID-19 in April 2020.
NAHB/Wells Fargo Housing Market Index (HMI) / Builder Sentiment Chart
(click on chart for live, interactive chart)
By Dennis Norman, on December 9th, 2022 There were 4,499 building permits issued for new single-family homes in the St Louis area during the 12-month period ended October 31, 2022, a decrease of 7.01% from the same period a year ago when there were 4,838 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Five of the seven counties covered in the report saw a decrease in building permits from the same period a year ago with three of the counties have a double digit decline. Franklin County came out the big winner with nearly a 15% increase in building permits issued during the past 12-months.
St Louis New Home Building Permits – October 2022
By Dennis Norman, on November 10th, 2022 There were 4,499 building permits issued for new single-family homes in the St Louis area during the 12-month period ended September 30, 2022, a decrease of 8.89% from the same period a year ago when there were 4,938 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Five of the seven counties covered in the report saw a decrease in building permits from the same period a year ago with three of the counties have a double digit decline.
St Louis New Home Building Permits -September 2022
New Home Building Permits In St Louis For Most Recent 12-Months Decline Over 8 Percent
By Dennis Norman, on November 9th, 2022 The National Association of Home Builders (NAHB) and Wells Fargo, jointly publish quarterly their Housing Opportunity Index (HOI) which shows the affordability, or lack thereof, of homes to a typical family. To arrive at an index value the median home price of recently sold homes for an area is taken into account as well as the median income for a family in that area. From this data the index is computed to show how affordable the typical home is to a typical family. The higher the index, the more affordable homes are to buyers in that market and the lower the index the less affordable.
For the 3rd quarter of 2022, the HOI index hit the lowest level (meaning homes were less affordable) since the inception of the HOI in 2012. As the chart below shows, the current Housing Opportunity Index for the U.S. is at 42.2% meaning just over 40% of families can afford to buy a home in their area. This is down slightly from 2nd quarter but down quite a bit from the first quarter of this year when it was 56.9%.
Affordability in St Louis is much better…
The NAHB/Wells Fargo Housing Opportunity Index is also produced for metro-areas. For the third quarter of this year, St Louis had a HOI index of 74.8, over 30 points better than the national index! This means a typical home in St Louis is affordable to about 30% more of St Louis families with a typical income than on the national level.
NAHB/Wells Fargo Housing Opportunity Index (HOI)
(click on chart for current, live, interactive chart)
By Dennis Norman, on October 18th, 2022 The National Association of Home Builders (NAHB) released their NAHB/Wells Fargo Housing Market Index (HMI) report for October 2022 and, not surprisingly, it shows the builders are continuing to lose confidence in the market. As our chart below shows, the Housing Market Index (HMI), the red line, peaked in November 2020 at 90 and has, with the exception of a few minor upticks along the way, fallen ever since reaching 38, the lowest level since August 2012 when it fell to 37.
Single Family Housing Starts and HMI Index 1985-2022 (NAHB)
By Dennis Norman, on October 13th, 2022 Yesterday, Fannie Mae released their October housing forecast in which they forecast, among other things, where home sales and prices are headed. The report incudes a forecast for next year, which included:
- Home prices in 2023 to decline 1.5% from 2022
- Home sales to finish 2022 down nearly 18% from last year and drop another 22% in 2023
- New home construction to end 2022 down 3.6% from last year and drop another 25% in 2023.
- Mortgage Interest Rates will continue to rise the rest of these year, ending the year at 6.7% and then will ease back to 6.4% in 2023.
See Fannie Maes Complete Housing Forecast HERE
By Dennis Norman, on October 7th, 2022 There were 4,486* building permits issued for new single-family homes in the St Louis area during the 12-month period ended August 31, 2022, a decrease of 8.93% from the same period a year ago when there were 4,926 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Six of the seven counties covered in the report saw a decrease in building permits from the same period a year ago with four of the counties haveing a double digit decline.
*The city of St Louis did not report building permit data for August 2022. Last year there were 54 permits issued in August, if we assume the same number for this year, the City of St Louis would of had an increase of 5.6% for the period, and the overall drop in building permits for the St Louis area would have been 7.8% rather than the 8.93% shown…
St Louis New Home Building Permits -Aug 2022
By Dennis Norman, on September 13th, 2022 There were 4,600 building permits issued for new single-family homes in the St Louis area during the 12-month period ended July 31, 2022, a decrease of 8.06% from the same period a year ago when there were 5,003 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Five of the seven counties covered in the report saw a decrease in building permits from the same period a year ago with three of the counties have a double digit decline.
St Louis New Home Building Permits -July 2022
By Dennis Norman, on August 5th, 2022 I saw dozens and dozens of headlines yesterday reporting that mortgage interest rates had fallen below 5% on a 30-year fixed rate mortgage. The catch is on the day that was reported, yesterday, interest rates were actually above 5% on a 30-year fixed-rate loan. As our chart below shows, the MND Rate index was reporting 5.09% and, below that, Optimalblue was reporting 5.326%. Both of the aforementioned charts are updated daily and considered by many in the industry to have the most current and accurate information.
How could all the big headlines be wrong?
Well, actually the articles I scanned were not wrong in what they were reporting, the headline would just give many home buyers a different impression perhaps than what was actually being reported. What prompted the headlines was yesterday, like every week on Thursday, the Freddie Mac Primary Mortgage Market Survey® (PMMS®) results were released. In Freddie Mac’s report, it showed the average 30-year fixed rate mortgage was 4.99% (see the Freddie Mac chart at bottom). The catch is, the survey is done from Monday through Wednesday of the week and then the results reported on Thursday. Many lenders submit their rates to Freddie Mac on Monday meaning by the time the report comes out they are 3-days old. A lot happens in the mortgage market in 3-days, in fact a lot can happen during one day. Oh yeah, the other thing worth noting is if you read the details on the Freddie Mac survey the stated rate was only obtained by paying 0.80 in points, so 8/10 of 1% of the loan amount would be paid up front to get that rate.
Freddie Mac’s Survey Is Very Valuable and Relevant
[xyz-ips snippet=”Interest-Rates-and-Mike-McCarthy-Promo”]
Continue reading “Yesterday’s Headlines Say Interest Rates Are Below 5 Percent – Why They Were Wrong“
By Dennis Norman, on August 4th, 2022 During the 14 year period prior to the housing bubble bursting in 2008, there were 92,065 building permits issued for new single family homes in the 3 most active home building counties in St Louis. As the table shows below, over half the permits issued during that period were in St Charles County alone, with the other half in the counties of St Louis and Jefferson.
Needless to say, when the housing bubble burst in 2008 and the market collapsed, new home construction came to a screeching halt. However, after about 5 years, the market quickly regained lost ground and for the past several years it seems home builders couldn’t build homes fast enough. We’ve had a low inventory of homes for sale for so long it’s starting to seem normal. But still, over 14 years have passed since the bubble burst and we are still way behind on new home construction. In the 14-year period after the bubble burst, there have been 40.528 building permits issued for new single family homes in the St Louis area counties mentioned above, a decline of nearly 56% from the prior 14-year period.
St Louis New Home Building Permits -1994 through 2007 and 2008 through 2021
By Dennis Norman, on August 3rd, 2022 There were 4,516 building permits issued for new single-family homes in the St Louis area during the 12-month period ended June 30, 2022, a decrease of 12.05% from the same period a year ago when there were 5,135 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Five of the seven counties covered in the report saw a decrease in building permits from the same period a year ago with three of the counties have a double digit decline.
St Louis New Home Building Permits -June 2022
By Dennis Norman, on July 27th, 2022 According to the latest data from HUD and the US Census Bureau, there is a 9.3 month supply of new homes for sale in the U.S. as of June, 2022. As the chart below illustrates, this is the largest supply of new homes for sale since May 2010 when there was also a 9.3 month supply. It wasn’t that long ago, August 2020 to be exact, when the supply hit a record low level of 3.3 months.
St Louis New Home Supply is a little lower…
It’s a little hard to pinpoint the new home supply in St Louis for several reasons. One, not all new homes that are for sale are listed in the MLS and then the MLS allows new homes to be listed in two categories, both new construction and normal residential, so that can skew the data as well. Nonetheless, we do the best we can to sort through the data. As our table at the bottom shows, there is currently a little over a 7-month supply of new homes for sale in St Louis, so still higher than a historical “norm” but about 2-months less than at the national level.
Continue reading “Supply of New Homes For Sale Reaches Highest Level In Over 12 Years“
By Dennis Norman, on June 10th, 2022 There were 5,138 building permits issued for new single-family homes in the St Louis area during the 12-month period ended April 30, 2022, a decrease of 9.69% from the same period a year ago when there were 5,138 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Four of the seven counties covered in the report saw a double-digit decrease in building permits from the same period a year ago.
St Louis New Home Building Permits -April 2022
By Dennis Norman, on June 10th, 2022 Given the low-inventory of homes for sale that has existed for some time now, it may be hard to believe my next statement, but the latest data from the U.S. Census Bureau and HUD show that there is currently a 9-month supply of newly constructed homes in the U.S. As the chart below illustrates, this is the highest level the supply of new homes in the U.S. has reached since May 2010 when there was a 9.3 month supply.
The months supply of depicted below is calculated as the ratio of new homes for sale to the number of new homes sold. The resulting number represents the number of months it would take for the current new home inventory that is for sale to be depleted given the current sales rate if no new additional new homes were built.
Months Supply of New Homes In The U.S.
(click chart for live, interactive chart)
By Dennis Norman, on May 18th, 2022 The National Association of Home Builders (NAHB) in conjunction with Wells Fargo publishes their House Market Index (HMI) monthly which reveals the sentiment of home builders about the market. In the report released yesterday, the HMI fell 8 points to 69, marking the fifth month in a row that builder sentiment as declined and becoming the lowest level for builder sentiment since June 2020.
It may not be all that bad though…
As it true with most data, it’s all relative. With this in mind, this may be the 5th straight month that builder sentiment has fallen however, as the chart below illustrates at a level of 69 builder sentiment is still at a level that is historically high. Since the inception of the HMI in January of 1985 the median value of the index is 56 so at 69 we’re still well above the overall median. In the last 10 years, the median of the HMI Index has been 63 so the current level is also above that.
NAHB House Market Index (HMI)
By Dennis Norman, on May 14th, 2022 There were 4,699 building permits issued for new single-family homes in the St Louis area during the 12-month period ended March 31, 2022, a decrease of 6.86% from the same period a year ago when there were 5,045 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Four of the seven counties covered in the report saw a double-digit decrease in building permits from the same period a year ago.
St Louis New Home Building Permits -March 2022
By Dennis Norman, on April 15th, 2022 Yesterday, I wrote an article addressing the high rate of inflation just reported and its impact on the St Louis housing market. In it, I promised to take a deeper look into the effect of the current events related to the economy on St Louis home prices which I will do in this article.
Before I go further, I should mention I’m not an economist nor a fortune teller. I am, however, a real estate broker and data nerd that has spent over 40 years in the St Louis real estate industry. I try my best to use my knowledge and experience to anticipate changes in the market and use this to help our agents and clients use this information to their advantage.
History always repeats itself..
I find the above old adage to be pretty accurate when it comes to the real estate market. Therefore, in trying to get my head around what impact a high inflation rate may have on home prices, I started by going back to prior periods of high inflation rates.
The first chart below shows the rate of inflation, interest rates, and the St Louis home price index. I’ve made some notes on it to show prior inflationary periods and the effect on home prices. The first period, the early 80s was much worse than today as inflation was higher and interest rates were in the stratosphere hitting 18%. The more recent period around 2007-2009 was not as severe and therefore the impact on home prices was not as dramatic as the former either. As you can see on the far right side of the chart, home prices have increased in the past several months at a sharp rate with the change from a year ago being greater than the last inflationary period but not as great as the one from the early ’80s.
The next chart shows the relationship between home prices and rent. When home prices outpace rent, home prices decline, when rent outpaces home prices, prices rise. As the chart shows, these two lines have converged indicating a reasonable balance between home prices and rent.
During the period of 2007 – 2011 home prices fell over 17% during a four year period before finally bottoming out.
Today is different though…
Continue reading “How Much Will St Louis Home Prices Be Impacted By Inflation?“
By Dennis Norman, on April 7th, 2022 There were 4,669 building permits issued for new single-family homes in the St Louis area during the 12-month period ended February 28, 2022, a decrease of 5.8% from the same period a year ago when there were 4,956 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Four of the seven counties covered in the report saw a double-digit decrease in building permits from the same period a year ago.
St Louis New Home Building Permits -February 2022
By Dennis Norman, on March 16th, 2022 There were 4,743 building permits issued for new single-family homes in the St Louis area during the 12-month period ended January 31, 2022, a decrease of 2.5% from the same period a year ago when there were 4,864 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Four of the seven counties covered in the report saw a decrease in building permits from the same period a year ago. Warren, Lincoln, and St Charles County had a double-digit decrease.
St Louis New Home Building Permits -January 2022
By Dennis Norman, on February 2nd, 2022 There were 4,825 building permits issued for new single-family homes in the St Louis area during 2021 which is 9 more permits than were issued in 2020, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). For the past few years, St Louis has experienced a strong seller’s market due to the low supply of homes for sale.
This demand certainly seems to be something that would encourage builders to increase the number of homes being built significantly. However, there are many challenges facing St Louis builders today that prevents this. The challenges include a shortage of developed lots, or even ground in areas of demand, as well as increased construction costs, a result of regulatory issues, material prices and construction worker’s wages. If the builder can deal with the increased prices, then there are supply chain issues and labor shortages to deal with as well. Selling new homes is pretty easy today, the challenge is developing them.
St Louis New Home Building Permits -December 2021
By Dennis Norman, on January 15th, 2022 There were 4,851 building permits issued for new single-family homes in the St Louis area during the 12-month period ended November 30, 2021, an increase of 3.17% from the same period a year ago when there were 4,702 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Three of the seven counties covered in the report saw an increase in building permits from the same period a year ago, two of those, Franklin County and the City of St Louis, a double-digit increase.
St Louis New Home Building Permits -November 2021
By Dennis Norman, on December 10th, 2021 There were 4,838 building permits issued for new single-family homes in the St Louis area during the 12-month period ended October 31, 2021, an increase of 2.98% from the same period a year ago when there were 4,698 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Four of the seven counties covered in the report saw an increase in building permits from the same period a year ago, three with a double-digit increase. St Charles County continues to show a trend of a slight decline in permits with this period falling short of the 12-month period ended last month.
St Louis New Home Building Permits -October 2021
By Dennis Norman, on November 15th, 2021 There were 4,938 building permits issued for new single-family homes in the St Louis area during the 12-month period ended September 30, 2021, an increase of 6.38% from the same period a year ago when there were 4,642 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Five of the seven counties covered in the report saw an increase in building permits from the same period a year ago, three with a double-digit increase. St Charles County continues to show a trend of a slight decline in permits with this period falling short of the 12-month period ended last month.
St Louis New Home Building Permits -September 2021
By Dennis Norman, on October 9th, 2021 There were 4,926 building permits issued for new single-family homes in the St Louis area during the 12-month period ended August 31, 2021, an increase of 6.44% from the same period a year ago when there were 4,628 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). Six of the seven counties covered in the report saw an increase in building permits from the same period a year ago, half of them with a double-digit increase and the other half with a slight increase. St Charles County saw new home permits fall by 1.18% from 1,777 permits to 1,756 permits during the period.
St Louis New Home Building Permits -August 2021
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