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New homes sales rise

The market for newly built single-family units increased slighlty more than 3 percent in April

Posted: May 30, 2012 7:29 p.m.
Updated: May 30, 2012 7:29 p.m.

Sales of newly built, single-family homes rose 3.3 percent in April to a seasonally adjusted annual rate of 343,000 units, according to newly released data from HUD and the U.S. Census Bureau.

Positive signs contributed to the improving housing market, according to a Freddie Mac news release.

Personal-consumption purchases at a 15.3 percent annual rate reflected continuing strength in consumer products such as cars and kitchen appliances, said the federal mortgage program.

While first-quarter 2012 economic growth was 2.2 percent slower than the previous quarter, it was better than three of the past four quarters, Freddie Mac reported.

“Taken together, the first-quarter data releases provide an encouraging sign for both the macroeconomy and the housing recovery,” said Frank Nothaft, Freddie Mac, vice president and chief economist. “While not uniformly positive, for the most part the data trend in the right direction.”

Residential fixed investment like new housing construction and remodeling expenses have been a net positive contributor to growth for four straight quarters, Freddie Mac said in its report. Home prices at or near a trough in many markets bodes well for further declines in delinquency rates.

April building permits were up 13 percent in Los Angeles County, and up 16 percent statewide reported the National Association of Home Builders.

“The new home selling season is heating up and we have definitely seen an increase in sales and traffic compared to first quarter of this year,” said Tom DiPrima, executive vice president with KB Home, Southern California division.

Prices have been increasing at most all of the KB Home communities and demand continues to increase, he said.

Factors contributing to the trend include the fact that homebuilders biggest competition during the recession were distressed properties — foreclosures and short-sales — along with resale properties, DiPrima said.

“We are seeing lower levels of inventory in the market now,” DiPrima said. “Home shoppers are telling us that the resale and foreclosure homes that are available today do not provide value.  Not every buyer is willing to endure the hassle and uncertainty that comes with buying a foreclosure home, it’s a process that can be difficult to navigate for any buyer.”

Also, homebuilders are offering features and options most resale homes don’t have, he said.

“With today’s low interest rates and affordable prices — combined with the lower operating costs of energy efficient homes — there may never be a better time to buy a new home,” DiPrima said.


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