Real Estate Not Immune to Arctic Blast
Winter’s frigid temps have kept would-be buyers indoors, slowing down sales figures
Bring on the spring thaw!
The polar vortex didn’t just make for brutal weather conditions — it also made for some less-than-ideal real estate conditions.
Both the National Association of Home Builders and the National Association of Realtors cite recent extreme weather as debilitating factors to the home sales this winter.
The unusually severe weather conditions across the bulk of the U.S., coupled with concerns over the cost and availability of labor and lots, pushed down the NAHB/Wells Fargo Housing Market Index by 10 points in February to 46. The monthly survey tracks builder perceptions of current single-family home sales, sales expectations for the next six months and prospective-buyer traffic; any number over 50 indicates that more builders view the conditions as good versus poor. All three major HMI components declined in February.
The NAHB figures follow news last month from the NAR that showed a drop in pending home sales across all four major regions of the country in December. The NAR’s Pending Home Sales Index, a forward-looking sales indicator based on contract signings, fell to 92.4 in December, down 8.7 percent from revised November numbers. The abnormal weather across the majority of the country forced people indoors and prevented some buyers from looking at homes or making offers, said Lawrence Yun, the NAR’s chief economist, in a statement. The data, which reflect contracts but not closings, is at its lowest levels since October 2011.
David Crowe, the NAHB’s chief economist, added that the weather conditions also hurt retail and auto sales, which had a contributing effect on the demand for new homes.
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