Welcome back after posting my video a Few days ago about how new home prices Decrease big time down to nearly a Three-year low I received a lot of Comments regarding um confusion Regarding are home prices increasing or Are the decreasing so in today's video I'm going provide some clarification Regarding um what's happening right now Regarding home prices on a national Level um so one thing I want to share With you guys is that when you just read Headlines or thumbnails uh you can get Confused but also it's very tricky as Well because there's a lot of um uh Reports um that have to do with Different time frames so for example K Schiller just announced a couple of days Ago regarding all-time record highs uh For home prices also just uh doing a Google search for home prices right now Which is on uh Wednesday March 27th CNN Says there's more bad news for potential Home buyers prices just hit another Record high um California uh City sees Home prices surging it says your home Price growth is back to pre pandemic Levels uh CNN says there's more bad news For potential home buyers prices just Hit another record high but then you had This news Outlet just announced two days Ago that us um home prices fall the Medium price the lowest in nearly 2 and 1/2 years um also searching for new
Houses or new home prices Wolf Street Says prices of new houses down 19% from The peak the lowest since June of 2021 So what the heck is going on so again it Depends on the source of the article and Um I just want to mention this really Quickly here uh the US core logic S&P Case Shiller index which was posted um Yesterday on March 26th uh reported that We have all-time record highs for home Prices this is based on existing houses And also this is for the month of January um some say that their index Which um is a more accurate um figure Regarding home prices on a national Level but the data is extremely lagging This was posted in late March regarding Home prices in January however it's Based on a thre Monon average from November December and January therefore This could be based on sign contracts or Purchase contracts being signed between Buyers and sellers as early as September And October of 2023 so very lagging data and also They're talking about existing home Sales and also they're talking about Overall home values on a national level What I do want to focus on more in this Video here is the dichotomy between um Home prices for new houses versus the Sell Market of existing houses let's First talk about new home construction So this is from the National Association
Of home builders or the nhb announced uh Just last week regarding Builder Sentiment so Builder sentiment um is Actually um our Builders overall are More optimistic about a housing market Than not that actually Rose to 51 any Measure by the way below 50 indicates That Builders are pessimistic regarding Our housing market in any case it says Here that more Builders are cutting back On reducing home prices in order to Boost sales meanwhile the use of sales Incentives is holding firm sales Incentives could be free Builder Upgrades such as a free um uh Refrigerator washer and dryer free Upgrades in the house or it could be in The form of a closing cost Credit in Which the Builder offers a home buyer 10,50 $1,000 to uh decrease your out of Pocket expenses in buying their brand New houses these are all forms of sales And incentives um also the share of Builders offering some form of incentive Uh in March was at 60% so six out every 10 Builders offering some form of Incentives in order to increase sales The challenge that home builders are Facing right now is a glut of inventory Levels though so here's a look at our Good uncle Fred the source here is a US Census buau and also um HUD so for the Month of February the most recent data We have just announced a couple days ago
There's around 463,000 Homes for sale on National level and This is brand new home construction so a New home sale or a house actually for Sale could be a dirt lot in which the Builder is trying to get an offer Accepted and then once they get the Offer accepted they're going to start Building that house so a house for sale Is not necessarily A completed house a Home for sale in the new home Construction industry could be a dirt Lot a home under construction or a Completed house as well but overall There is around 463,000 homes for sale on a national Level Excluding um which is the peak right Here back in October of 2022 when there Was 466,000 excluding that one single month Um this is the highest levels right now This February that we've had going back To approximately March of 2008 so a glut Of inventory in the new home Construction industry also this is way Higher compared to preo levels so for Example back in let's just look at uh 2019 2019 there was only 339,000 um home hes for sale new single Family houses for sale compared to 463,000 right now so I think it's safe To say that we have a um surplus of new
Houses for sale what we're also seeing As well this is very very important Something I've been talking about on the Channel for over a year now is a look at The number of completed houses for sale Because overall inventory could be a Dirt lot house under construction or a Completed house what I'm more focused on Are completed houses that have not sold Yet because if Builders build a house And they're not able to sell them that Would be a sign of weakening or Weakening housing market so right now at Least for February there's 85,000 Completed houses for sale that's Approximately 23% higher compared to one Year ago on top of that that's the Highest number of completed houses for Sale going back to September 2010 so nearly a 14-year high so Builders overall have a high level of Houses for sale regardless of the stage Of construction but also a glut of Houses for sale that are completed as Well nearly a 14-year High I found this Chart on R.com website here this is the percent Of houses for sale by stage of Construction the red line is not yet Started a dirt lot uh the lighter uh Line here is houses under construction Which is right there and the black line Is completed houses so out of all the Houses for sale on a national level
Again there's around 463,000 20% are completed houses that's a $85,000 number so even though we have Nearly a 14-year high in the number of Completed houses it only represents About 20% of all new houses for sale the Vast majority of houses for sale or new Houses for sale are houses under Construction at least for February at 50 C% 23% are not yet started or a dirt lot For sale this is also something I found To be uh really interesting as well so For the month of February 30.2% of all houses for sale this Includes new houses plus existing houses Or older houses 30.2% of all inventory levels is Actually new home construction this is Uh vastly different compared to the past Two decades so from the year of 2000 Through approximately 2019 that share Ranged from 5 to approximately 15% now It's at double that or more than double That at 30% so a high share of new Houses for sale compared to all the Houses for sale in the resale Market Plus brand new home construction so Because of this uh Supply um issue that Builders are kind of grappling with Right now this is one of the main Reasons why um prices of new home Construction are down um by about 19% Compared to the all-time record highs
That was set back in October of 2022 back then it was around 497 th000 Now it's only 4,500 and that by the way is the lowest Levels we've had going all the way back Into till uh June of 2021 when at that time the meiting sold Price for new houses was only $375,000 in addition looking at February Last year we're at $433,000 now it's down to 400,000 uh this means that home prices Have decreased by about 8% Year-over-year now looking at the resale Market of existing houses excluding Brand new homes uh we're at 384 ,500 that's an increase of 5.7% compared to a year ago so new Houses down 8% year-over-year whereas The existing houses increase by 5.7% also by my dumb math uh prices Right now for existing houses are at a Three-month High uh which is entirely Normal by the way though because we do See a seon seasonal uptick in home Prices where home prices tend a decrease In the winter months um but this is much Different compared to the nearly Threeyear low for new houses though um Also compare this to the all-time record Highs that was set back in when was that June 2022 when the meing so price for Existing houses was nearly
$414,000 this means we're only down by About 7% from the record highs set back Then compare that to the all-time record Highs for new houses were down 19% in my Personal opinion this really all comes Down to inventory levels so for example According to Altos research.com um for The week ended March 22nd this year There's 513,000 homes for sale Nationwide this is a small increase Compared to last year when we had about 45,000 but this is much lower compared To 2020 as well as 2019 when at that time We had 835,000 houses for sale this Means we have approximately 39% fewer Existing houses for sale compared to the Same week of 2019 let's take a look at How this compares to new home Construction though so at 463,000 back during February of 2019 There was only 339,000 this means there's approximately 30 7% more new houses for sale compared To the same month of 2019 so to Summarize today's video because we have This glut of uh inventory or houses for Sale uh for new home construction that Is actually causing prices to decrease Down by 19% from the all-time record Highs compared to the only 7% decrease In the resale market and this again all Due to inventory levels uh increasing by More than 30 % from February of 2019
Versus a huge decrease in the resale Market as well uh but hope that Clarifies um the uh changes we're seeing In the videos I'm posting and also uh The news outlets you're seeing as well Because um there's quite the dichotomy In our US housing market regarding new Houses versus the resell Market but Please leave me a comment below with Your thoughts regarding this of course Let me know if you guys have any Questions the last thing I want to do is Really make a video and just confuse you Guys I try to do my best to provide uh Timely updates but again sometimes I Fail and of course I want to be Transparent with you guys as well Anyways I appreciate you guys thank you So much for watching today's video like And subscribe we'll see you on the next Video [Music] N
