Lawrence Yun,
chief economist of the National Association of Realtors®, said
existing-home sales have shown a 20 percent cumulative increase over the
past two years, while prices have gained 18 percent, but incomes have
risen only 2 to 4 percent in the same timeframe.
“We’ve come off of record high housing affordability conditions in
the past year, and are now at a five-year low, but conditions are still
the fifth best in the past 40 years,” Yun said. “While the median-income
family in many areas will still be well positioned to buy a home in
2014, income is barely budging given growth in consumer prices.”
Yun said the other headwinds moving forward include limited inventory
conditions in many areas and mortgage lending standards that are still
unnecessarily stringent. “Although home sales have recovered over the
past two years, mortgage purchase applications have been flat for the
past four years, even with rising sales,” he said.
With higher mortgage interest rates, he expects refinancings to
collapse in 2014 to the lowest level in at least 15 years, and hopes
purchase applications will begin to rise. “This is an incentive for
banks to increase mortgage origination, especially considering the low
default rates in recent years. But even with cheap mortgages for the
past four years, all-cash buyers stayed high, accounting for over 30
percent of sales,” Yun noted.
Beyond bank motivation, Yun said Washington policies for mortgage
lending have been too restrictive. He cited rising fees for Fannie Mae
and Freddie Mac, higher Federal Housing Administration premiums, as well
as Dodd-Frank banking regulations, which have been strangling community
banks. In addition, Yun said banks are holding onto funds for potential
Department of Justice lawsuits, rather than making them available to
mortgage borrowers.
He said job creation, and hopefully a relaxation in stringent lending
standards, will offset higher mortgage interest rates. Existing-home
sales this year are forecast to rise 10 percent to nearly 5.13 million,
but should hold fairly even at about 5.12 million in 2014.
Limited supplies were the biggest factor in price performance in the
past year, with inventory bouncing around 13-year lows, and seriously
delinquent mortgages have been trending steadily down. The national
median existing-home price for all of 2013 will be up just over 11
percent, to about $197,000; then increase nearly 6 percent next year.
Yun expects the inventory shortages to be felt again next spring.
“Housing starts are the only way to alleviate inventory shortages,” he
said. “Housing starts need to rise 50 percent to meet underlying
demand.”
Housing starts are forecast to hit 917,000 this year and reach 1.13
million in 2014, which is still well below the underlying demand of
about 1.5 million. New-home sales are likely to total 429,000 in 2013,
and grow to 508,000 next year.
Inflationary pressure may begin to build during the course of 2014,
with consumer prices projected to rise 2.7 percent, but Yun said
inflation could reach 4 to 6 percent in 2015. Mortgage interest rates
are expected to trend upward and reach 5.4 by the end of next year.
Yun projects growth in Gross Domestic Product to be 1.7 percent this
year and 2.5 percent in 2014. “If not for the housing recovery, we could
be on the verge of a recession,” Yun noted. “The rent component of
inflation is rising, so the only way to tame price growth is new home
inventory.”
Since the economic downturn, 8.8 million jobs were lost, but only 7
million have been regained. “We need another 6 to 8 million jobs to get
back to normal,” Yun said. The states with the fastest job growth are
North Dakota, Utah Idaho, Texas, Colorado, Minnesota, Georgia,
Washington, Arizona and New Jersey. The unemployment rate is projected
to decline to about 6.7 percent around the end of next year.
Source: The National Association of Realtors®,
Showing posts with label housing sales. Show all posts
Showing posts with label housing sales. Show all posts
Sales Trends in Real Estate for the Third Quarter
Existing-home sales increased in August and reached the highest level in six-and-a-half years, while the median price shows nine consecutive months of double-digit year-over-year increases, according to the National Association of Realtors®.
Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.7 percent to a seasonally adjusted annual rate of 5.48 million in August from 5.39 million in July, and are 13.2 percent higher than the 4.84 million-unit level in August 2012. Sales are at the highest pace since February 2007, when they hit 5.79 million, and have remained above year-ago levels for the past 26 months.
Lawrence Yun, NAR chief economist, said the market may be experiencing a temporary peak. “Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions,” he said. “Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase.”
Total housing inventory at the end of August increased 0.4 percent to 2.25 million existing homes available for sale, which represents a 4.9-month supply at the current sales pace, down from a 5.0-month supply in July. Unsold inventory is 6.3 percent below a year ago, when there was a 6.0-month supply. “Limited inventory in some areas means multiple bidding remains a factor; 17 percent of all homes sold above the asking price in August, although 63 percent sold below list price.”
Data from NAR’s listing site, shows large declines in inventory from a year ago in Naples, Fla., down 23.5 percent; the Detroit area, down 23.3 percent; and the greater Boston area, down 20.7 percent.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.46 percent in August from 4.37 percent in July, and is the highest since July 2011 when it was 4.55 percent; the rate was 3.60 percent in August 2012.
The national median existing-home price for all housing types was $212,100 in August, up 14.7 percent from August 2012. This is the strongest year-over-year price gain since October 2005 when the median rose 16.6 percent, and marks 18 consecutive months of year-over-year price increases.
Distressed homes5 – foreclosures and short sales – accounted for 12 percent of August sales, down from 15 percent in July, and is the lowest share since monthly tracking began in October 2008; they were 23 percent in August 2012. Ongoing declines in the share of distressed sales are responsible for some of the growth in median price. Eight percent of August sales were foreclosures, and 4 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in August, while short sales were discounted 12 percent.
NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said rising home values will encourage more people to sell. “As the equity position of most homeowners continues to improve, some who have been on the sidelines will list their home for sale,” he said. “Most of those owners also will be buying another home, but higher levels of new home construction going into 2014, combined with some reduction in demand from less favorable affordability conditions, will help to moderate price growth to more sustainable levels.”
The median time on market for all homes was 43 days in August, little changed from 42 days in July, but is much faster than the 70 days on market in August 2012. Short sales were on the market for a median of 98 days, while foreclosures typically sold in 52, days and non-distressed homes took 41 days. Forty-three percent of homes sold in August were on the market for less than a month.
First-time buyers accounted for 28 percent of purchases in August, down from 29 percent in July and 31 percent in August 2012.
All-cash sales comprised 32 percent of transactions in August, up from 31 percent in July and 27 percent in August 2012. Individual investors, who account for many cash sales, purchased 17 percent of homes in August, compared with 16 percent in July and 18 percent in August 2012. Last month, three out of four investors paid cash.
Single-family home sales rose 1.7 percent to a seasonally adjusted annual rate of 4.84 million in August from 4.76 million in July, and are 12.8 percent above the 4.29 million-unit pace in August 2012. The median existing single-family home price was $212,200 in August, which is 14.4 percent higher than a year ago.
Existing condominium and co-op sales rose 1.6 percent to an annual rate of 640,000 units in August from 630,000 in July, and are 16.4 percent above the 550,000-unit level a year ago. The median existing condo price was $211,700 in August, up 17.7 percent from August 2012.
Regionally, existing-home sales in the Northeast were unchanged at an annual rate of 710,000 in August but are 12.7 percent above August 2012. The median price in the Northeast was $268,800, up 7.6 percent from a year ago.
Existing-home sales in the Midwest increased 3.1 percent in August to a pace of 1.32 million, and are 18.9 percent higher than a year ago. The median price in the Midwest was $166,100, which is 10.0 percent above August 2012.
In the South, existing-home sales rose 3.8 percent to an annual level of 2.19 million in August and are 13.5 percent above August 2012. The median price in the South was $181,000, up 14.6 percent from a year ago.
Existing-home sales in the West declined 2.3 percent to a pace of 1.26 million in August but are 7.7 percent higher than a year ago. With the tightest regional inventory conditions, the median price in the West rose to $287,500, which is 18.8 percent above August 2012.
Source: NAR
Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.7 percent to a seasonally adjusted annual rate of 5.48 million in August from 5.39 million in July, and are 13.2 percent higher than the 4.84 million-unit level in August 2012. Sales are at the highest pace since February 2007, when they hit 5.79 million, and have remained above year-ago levels for the past 26 months.
Lawrence Yun, NAR chief economist, said the market may be experiencing a temporary peak. “Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions,” he said. “Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase.”
Total housing inventory at the end of August increased 0.4 percent to 2.25 million existing homes available for sale, which represents a 4.9-month supply at the current sales pace, down from a 5.0-month supply in July. Unsold inventory is 6.3 percent below a year ago, when there was a 6.0-month supply. “Limited inventory in some areas means multiple bidding remains a factor; 17 percent of all homes sold above the asking price in August, although 63 percent sold below list price.”
Data from NAR’s listing site, shows large declines in inventory from a year ago in Naples, Fla., down 23.5 percent; the Detroit area, down 23.3 percent; and the greater Boston area, down 20.7 percent.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.46 percent in August from 4.37 percent in July, and is the highest since July 2011 when it was 4.55 percent; the rate was 3.60 percent in August 2012.
The national median existing-home price for all housing types was $212,100 in August, up 14.7 percent from August 2012. This is the strongest year-over-year price gain since October 2005 when the median rose 16.6 percent, and marks 18 consecutive months of year-over-year price increases.
Distressed homes5 – foreclosures and short sales – accounted for 12 percent of August sales, down from 15 percent in July, and is the lowest share since monthly tracking began in October 2008; they were 23 percent in August 2012. Ongoing declines in the share of distressed sales are responsible for some of the growth in median price. Eight percent of August sales were foreclosures, and 4 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in August, while short sales were discounted 12 percent.
NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said rising home values will encourage more people to sell. “As the equity position of most homeowners continues to improve, some who have been on the sidelines will list their home for sale,” he said. “Most of those owners also will be buying another home, but higher levels of new home construction going into 2014, combined with some reduction in demand from less favorable affordability conditions, will help to moderate price growth to more sustainable levels.”
The median time on market for all homes was 43 days in August, little changed from 42 days in July, but is much faster than the 70 days on market in August 2012. Short sales were on the market for a median of 98 days, while foreclosures typically sold in 52, days and non-distressed homes took 41 days. Forty-three percent of homes sold in August were on the market for less than a month.
First-time buyers accounted for 28 percent of purchases in August, down from 29 percent in July and 31 percent in August 2012.
All-cash sales comprised 32 percent of transactions in August, up from 31 percent in July and 27 percent in August 2012. Individual investors, who account for many cash sales, purchased 17 percent of homes in August, compared with 16 percent in July and 18 percent in August 2012. Last month, three out of four investors paid cash.
Single-family home sales rose 1.7 percent to a seasonally adjusted annual rate of 4.84 million in August from 4.76 million in July, and are 12.8 percent above the 4.29 million-unit pace in August 2012. The median existing single-family home price was $212,200 in August, which is 14.4 percent higher than a year ago.
Existing condominium and co-op sales rose 1.6 percent to an annual rate of 640,000 units in August from 630,000 in July, and are 16.4 percent above the 550,000-unit level a year ago. The median existing condo price was $211,700 in August, up 17.7 percent from August 2012.
Regionally, existing-home sales in the Northeast were unchanged at an annual rate of 710,000 in August but are 12.7 percent above August 2012. The median price in the Northeast was $268,800, up 7.6 percent from a year ago.
Existing-home sales in the Midwest increased 3.1 percent in August to a pace of 1.32 million, and are 18.9 percent higher than a year ago. The median price in the Midwest was $166,100, which is 10.0 percent above August 2012.
In the South, existing-home sales rose 3.8 percent to an annual level of 2.19 million in August and are 13.5 percent above August 2012. The median price in the South was $181,000, up 14.6 percent from a year ago.
Existing-home sales in the West declined 2.3 percent to a pace of 1.26 million in August but are 7.7 percent higher than a year ago. With the tightest regional inventory conditions, the median price in the West rose to $287,500, which is 18.8 percent above August 2012.
Source: NAR
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