New Home Starts and Sales Will Be Up This Year, But Buys of Existing Homes Will Fall

LAS VEGAS -- Homebuilders are starting off 2019 with hopes of another increase in U.S. sales, especially newly built houses.But the building industry also sees an upcoming drop nationally in purchases of preowned homes because of rising affordability issues."2019 looks like a year of solid, if not spectacular, growth," said Robert Dietz, chief economist of the National Association of Home Builders. "I think new home sales will be up a tad and existing home sales down."The building industry forecasts a 2 percent rise in nationwide home starts in 2019, making it the best year since the Great Recession. That's the most positive sign in this year's outlook."We actually have existing home sales declining year-over-year in 2019," Dietz said at the industry's annual meeting this week in Las Vegas. The drop in existing home sales is likely to be between 2 percent and 4 percent this year, according to the latest industry outlook.Preowned home sales in Dallas-Fort Worth fell slightly in 2018 after several years of increases. The decline continued into the new year. Higher mortgage rates and record prices are blamed for the slowdown."We saw a fairly noticeable drop in new and existing home sales in the second half of 2018 when interest rates touched 5 percent," Dietz said.While average mortgage costs have declined slightly in the last couple of months, prices in many major metro areas remain out of reach for thousands of potential buyers.The Washington, D.C.-based builders association identifies the Dallas area as one of the U.S. metro areas with the lowest home affordability. Less than half of the region's homes are considered affordable.Dietz said the affordability pinch isn't just happening in the most expensive coastal markets, but also in cities like Dallas where big population gains have put pressure on the housing market.  Continue reading...

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