New home construction fell in November, according to new estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. Despite the drop, however, an upward revision of October’s estimate means the overall trend in residential construction remains positive. In fact, the decline follows two months of significant gains, including a 6.3 percent increase in September and a 4.2 percent jump in October. Analysts forecast even further improvement in the next year, as job growth and wage increases are expected to boost the number of young buyers entering the housing market. In November, however, housing starts – which refer to the number of new homes that broke ground during the month – were down 1.6 percent. Building permits also fell from October, dropping 5.2 percent. The decrease in the number of building permits – which are a forward-looking indicator of future housing construction – was mostly due to an 11 percent decline in multi-family permits. Single-family authorizations to build new homes, on the other hand, slipped just 1.2 percent from the month before. More here.

Because builders have an unique perspective on the market for newly built, single-family homes, the National Association of Home Builders surveys them each month to gauge their perception of current buyer traffic and sales, as well as their expectation for sales over the next six months. Their responses are scored on a scale where any number above 50 indicates that more builders view conditions as good than poor. In December, the NAHB’s Housing Market Index fell one point to 57. The drop follows a four-point gain in November. David Crowe, NAHB’s chief economist, said the index has stabilized in the mid-to-high 50s after a sluggish start to the year. According to Crowe, the results are consistent with with the NAHB’s assessment that the new-home market is gradually climbing back to normal. This gradual upward trend is expected to continue into 2015. December’s dip in builder confidence was due to slight declines in the index components measuring current sales and future sales expectations, both of which dropped a point from the month before. Despite the drop, however, both components are still in the 60s, with future sales expectations registering a 65. The gauge of current buyer traffic was unchanged from the previous month. More here.

According to research from Harvard’s Joint Center for Housing Studies, homeownership – though not without risk – is an effective way to build individual wealth. And, because of this, homeowners typically have a higher net worth than renters. In fact, the median net worth of homeowners was $195,400 in 2013, which is $190,000 more than the median for people who rented. The study comes after many questions about the viability of homeownership as a financial investment were raised following the housing crash. After home values plummeted, the traditional view that owning a home would lead to greater wealth was damaged and, subsequently, the number of renters has increased as the homeownership rate has fallen. But homeowners are forced to save money in a way that renters aren’t – if only for the fact that paying off a mortgage requires owners to pay down a portion of their mortgage principal every month. This is essentially forced savings, which ultimately buys a greater percentage of ownership over time. In addition, homeowners can gain wealth through home price appreciation and have the added benefit of the tax benefits and deductions that come with ownership. Though the ups-and-downs of the housing market do pose a risk to homeowners, research continues to find a link between owning a home and accumulating wealth. More here.

The U.S. Department of Housing and Urban Development’s monthly Housing Scorecard collects key housing data and details of the administration’s foreclosure prevention efforts. November’s report shows the residential real-estate market improving, with progress in vital areas such as new and existing home sales, home prices, and foreclosure starts and completions. For example, the report found sales of new homes up again in October and 15.4 percent higher than one year earlier. Sales of previously owned homes also rose, hitting their fastest pace in just over a year. The scorecard shows home prices, though still rising, are increasingly stable, according to the most recent data. In fact, year-over-year price increases continue to slow, reversing the previous year’s volatile price spikes. The Federal Housing Finance Administration says home prices are now just 5.8 percent below their previous peak and approximately at the same level they were in September 2005. Foreclosure starts and completions, on the other hand, continue trending downward on a year-over-year basis. Despite the overall trend, however, October saw an increase over September’s estimates, though that can largely be attributed to banks imposing foreclosure moratoriums over the holidays. More here.

Over the past few weeks, mortgage rates have been falling, even setting new lows for the year. But despite low interest rates, mortgage activity hadn’t shown much significant improvement. Now, according to the Mortgage Bankers Association’s Weekly Applications Survey, mortgage demand has rebounded, spiking 7.3 percent last week due to a 13 percent jump in refinance activity. The improvement also included a 1 percent increase in demand for loans to purchase homes. Despite last week’s gains, however, purchase demand is still 4 percent below year-before levels. Mortgage rates, on the other hand, were a mixed bag last week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances was up from one week earlier, but rates on jumbo loans and loans backed by the Federal Housing Administration fell. Average mortgage rates on 15-year fixed-rate mortgages also increased. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

A new analysis of data from the 2013 American Housing Survey breaks down the types of homes millennial buyers buy, how they finance their purchase, and what they’re looking for in a house. Among the highlights of the report, three of four millennials – young adults roughly between the ages of 18 and 34 – are first-time buyers. Because they often have little or no savings, these buyers, more than older buyers, are likely to let financial reasons influence their choice of homes and are typically financing their home purchase out of their current income. That means, the homes they buy tend to be older, smaller, and less expensive. In fact, half of all homes sold to buyers in this age range averaged less than 1,650 square feet and cost less than $148,500. Millennial home buyers are also less likely to buy new homes but are more likely to buy a condo. Their most common reason for buying a home is a desire to establish their own household, though younger buyers also said they wanted more living space and wanted to own their own home. Compared with older buyers, millennials are more likely to pay attention to how close a house is to their workplace and to the quality of the school district. Still, older and younger buyers both agree that finding the right house is the biggest influence on their decision whether or not to buy a particular home. More here.