August 2019 saw an annual increase of 3.2% for home prices nationwide, inching forward from the previous month’s pace, according to the Case-Shiller Home Price Index from S&P Dow Jones Indices and CoreLogic.
The 10-City and 20-City composites reported a 1.5% and 2% year-over-year increase, respectively. During the month, 11 of 20 cities reported increases before seasonal adjustment, whereas 17 of 20 cities reported increases after seasonal adjustment.
“The U.S. National Home Price NSA Index trend remained intact with a year-over-year price change of 3.2%,” said Philip Murphy, Managing Director and Global Head of Index Governance at S&P Dow Jones Indices. “However, a shift in regional leadership may be underway beneath the headline national index.”
According to the index, Phoenix, Charlotte, and Tampa reported the highest year-over-year gains among all of the 20 cities.
In August, Phoenix led with a 6.3% year-over-year price increase, followed by Charlotte with a 4.5% increase and Tampa with a 4.3% increase. Seven of the 20 cities reported larger price increases in the year ending August 2019 versus the year ending July 2019.
“Phoenix saw an increase in its year over year price change to 6.3% and retained its leading position,” Murphy said. “However, Las Vegas dropped from No. 2 to No. 8 among the cities of the 20-City Composite, falling from a 4.7% year-over-year change in July to only 3.3% in August.”
“Meanwhile, the Southeast region included three of the top four cities. Charlotte, Tampa, and Atlanta all recorded solid year-over-year performance with price changes of 4.5%, 4.3%, and 4.0%, respectively,” Murphy said. “In the Northwest, Seattle’s year-over-year change turned positive (0.7%) after three consecutive months of negative year-over-year price changes. The 10-City Composite year-over-year price change declined slightly from July to 1.5%, while the 20-City Composite year-over-year price change remained steady at 2.0%. San Francisco was the only city to record a negative YOY price change (-0.1%).”
The graph below highlights the average home prices within the 10-City and 20-City Composites:
Buoyed by a strong economy and continued low mortgage rates, the New York State housing market showed an upward climb in sales and listings in September, according to the housing market report released today by the New York State Association of REALTORS®.
Closed sales in New York totaled 11,467 units in the month of September, a 1.6-percent increase from this time last year. New listings and pending sales rose substantially in September – up 7.5-percent to 18,161 homes and 7.6-percent to 11,182 respectively.
For the third quarter, closed sales were down marginally, 0.8-percent to 38,722 homes but both new listings and pending sales trended upward. There were 56,361 new listings this quarter, a 1.2-percent increase, while pending sales rose 4.9-percent to 37,766 homes.
Interest rates remained low, down 0.1-percent to 3.61 percent on a 30-year fixed mortgage, according to Freddie Mac. This is the fourth consecutive month that interest rates were below 4.0-percent.
Median sales prices once again climbed in September, up 5.7-percent to $280,000. Quarterly prices surged upwards as well, rising 5.5-percent to $290,000. Inventory levels were down for September, 2.9-percent to 71,737 homes for sale.
The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) posted a reading of 55 in the third quarter of 2019, unchanged from last quarter (Figure 1). Since the second quarter of 2013, the RMI has been above its breakeven point of 50, which indicates that more remodelers report market activity is higher than report it is lower, compared to the prior quarter.
The overall RMI is an average of two sub-indices, one measuring current remodeling activity and another measuring future indicators. The current market conditions index edged down one point to 54 from the previous quarter (Figure 2). Among its three major components, major additions and alterations dropped one point to 52, minor additions and alterations decreased by two points to 53 and the home maintenance and repair component rose one point to 57.
The future market indicators gained two points from the previous quarter to 57 (Figure 3). Calls for bids increased by one to 55, amount of work committed for the next three months gained two points to 54, the backlog of remodeling jobs increased one point to 59 and appointments for proposals jumped by five points to 60.
Demand for remodeling is solid and is supported by a healthy labor market and low interest rates. It is important to note that remodelers still face challenges, such as high costs and a lack of skilled labor.
The average FICO score stands at 706, a record high, said Ethan Dornhelm, vice president of scores and predictive analytics at FICO. That compares with 686 at the 2009 end of the Great Recession and it eclipses the 690 at the 2006 height of the housing bubble.
The key drivers are U.S. economic expansion that has propelled job growth and an increase in consumer education about protecting and improving scores, Dornhelm said in a blog post. In addition, the passage of time is helping to remove the credit scars from events that happened during the financial crisis, he said.
“Consumers who suffered financial misfortune during the Great Recession have over the past few years had the associated missed payments from that time period purged from their credit file, in accordance with the Fair Credit Reporting Act,” he said.
Measuring different credit events, the biggest improvement between April 2009 and April 2019 was the timeliness of mortgage payments, Dornhelm said. A decade ago, 7.2% of the population had been 90 days or more late on a mortgage payment within the last two years. By April, it had dropped to 2.8%.
Also showing big improvement was the percentage of the population who had been 90 days or more past due on a credit card in the last two years. A decade ago, it was 13%, and in April it was 8.6%.
The jump in FICO scores was due to “score improvement, not score inflation,” Dornhelm said.
“Significant improvement in the overall population’s credit profile has been the key driver of the 20-point increase in national average FICO score over the past decade,” he said. “These improvements are reflective of improving consumer financial health, as would be expected during a period of economic expansion.”
Economic data signaling the chance of a looming recession has increased uncertainty in the credit-scoring realm, he said.
“The average FICO score will continue to change, but in what direction?” Dornhelm said. “Trade talks with China, the possibility of a `no-deal Brexit,’ and Fed interest rate decisions loom large as concerns of a recession persist.”
Prices paid for goods used in residential construction decreased by 1.1% in June (not seasonally adjusted) according to the latest Producer Price Index (PPI) released by the Bureau of Labor Statistics. The decline broke a four-month trend of increases and was only the fifth month over the past two years in which prices fell.
Over the past 12 months, building materials prices have decreased 1.6%, just the fifth June year-over-year decrease since 2000. The decline is a sharp reversal of June 2017 to June 2018, during which prices increased 8.8%.
The PPI report shows that softwood lumber prices decreased (-1.7%, not seasonally adjusted) in June—the index’s third consecutive monthly decline. Prices remain at their lowest level since February 2017. While weekly prices have been volatile since mid-May according to Random Lengths, the difference between the average prices of softwood lumber in May and June mirrored the PPI data (-1.8% v. -1.7%).
One of the special indexes published by BLS tracks lumber and plywood in one category. Similar to softwood lumber, the lumber and plywood index fell 2.3%. Prices paid for softwood lumber and lumber and plywood have decreased 23.1% and 17.6%, respectively, since June 2018.
The price index for gypsum products continued its downward trend in June, declining 1.9%. In the last 10 months, gypsum prices have only increased twice.
Prices have declined by 6.2% and 10.8% since January 2019 and August 2018, respectively.
Ready-mix concrete prices increased 1.2% in June and remain relatively volatile. Prices have risen by more than 1.0% in two of the past three months, something that has only happened in 18 of the previous 231 months.
The housing market won’t recover much in the second half of 2019, says Capital Economics.
Mortgage interest rates have fallen this year, but that hasn’t spurred much action in the housing market, and things are unlikely to turn around for the remainder of the year as concerns about the economy continue to grow, the economists say.
“The fact interest rates are declining because of concerns that the economy is slowing argues against a strong rise in home purchase demand,” Capital Economics writes in a recent report. “That is reflected in measures of buyer sentiment. The decline in interest rates earlier this year failed to provide much of a boost to the share of households saying now is a good time to buy.”
That said, the report did indicate that rental demand will be solid thanks to strong wage growth and subdued home sales. And, the drop in rates has helped spur refinance activity, with applications jumping in the first half of June and signals indicating the likelihood of an upward trend for refis.
But purchase demand is less sensitive to changes in mortgage rates, the economists say, and home sales have therefore seen less of a lift from the drop in financing costs.
Also, the drop in rates was somewhat offset by tighter lender standards, the report says, including a recent pullback from the Federal Housing Administration that may make it harder for some riskier borrowers to qualify.
But on the bright side, homes are still affordable, the economists say.
“The fall in mortgage interest rates, slower house price gains and the rise in earnings growth have led to a drop in mortgage payments as a share of income,” the report says. “And, based on our forecasts for those variables, the payment burden is set to stay at around 16% over the next couple years, low by past standards.”
But the housing market is plagued by a lack of inventory, and this will prevent any meaningful rise in existing home sales, the report predicts.
“While the number of existing homes for sale has seen some improvement since reaching a record low at the end of 2017, at 1.8 million in May market conditions are still tight,” the report says. “And with interest rates falling back, we doubt existing inventory levels will see much of an improvement over the next couple of years.”
Mortgage rates have steadily declined with the 30-year fixed-rate bottoming out to 3.82 percent, its lowest level since September 2017, according to the latest figures from Freddie Mac.
Digital Risk co-founder Jeff Taylor told FOX Business’ Neil Cavuto that now is the time for new home buyers to take advantage of the bigger inventory on the market.
“If you’re looking to get into the housing market, i.e., you don’t have a house right now, this is literally the perfect time,” he during an interview on Monday. “Interest rates are about a one percentage point less than it was this time last year … that’s a 10 percent savings on a 30-year mortgage a month.”B
The Federal Reservemight cut the federal funds rate twice this year, a move that could cause the 30-year fixed rate to fall even lower.
“If you get two rate cuts at 50 and if you get to 75, yeah, I think you can be back down to three and a quarter [percent], Taylor said.C
Taylor adds that the lower interest rates allow consumers to reach a little deeper into their pockets and “afford more of a house.”
“People are feeling better about their jobs right now and they’ve been saving. It’s a great time to finally to get into the housing market and make a purchase,” he said.
Housing starts in the US rose 5.7 percent from a month earlier to a seasonally adjusted annual rate of 1,235 thousand units in April 2019, more than an expected 1,205 thousand and following a revised 1.7 percent advance in March.
Single-family homebuilding, which accounts for the largest share of the housing market, rose 6.2 percent to a rate of 854 thousand units in April and starts for the volatile multi-family housing segment advanced 4.7 percent to a rate of 381 thousand units. Increases in housing starts were recorded in the Northeast (84.6 percent to 144 thousand) and Midwest (42 percent to 186 thousand), while declines were seen in the South (-5.7 percent to 581 thousand) and West (-5.5 percent to 324 thousand). Starts for March were revised to 1,168 thousand from 1,139 thousand.
Building permits were up 0.6 percent to a rate of 1,296 thousand units in April, while markets had expected a 0.5 percent gain. Permits for the volatile multi-family housing segment increased 8.9 percent to 514 thousand, while single-family authorizations fell 4.2 percent to 782 thousand. Across regions, permits were higher in the West (5.3 percent to 339 thousand) and Midwest (2.2 percent to 188 thousand), but dropped in the Northeast (-4 percent to 120 thousand) and South (-1.2 percent to 649 thousand).
Year-on-year, housing starts dropped 2.5 percent and building permits decreased 5 percent.
According to a estimates from the U.S. Housing and Urban Development and Commerce Department, single-family starts continued to show weakness in March, despite the recent stabilization in the NAHB/Wells Fargo Housing Market Index (HMI). After downward revisions made to the February data, single-family starts were down 0.4% to a 785,000 seasonally adjusted annual pace in March, the lowest such rate since September 2016.
On a year-to-date basis, single-family construction is 5.3% lower than the first quarter of 2018. NAHB’s forecast, and the forward-looking HMI suggest that future data will show stabilization followed by slight gains due to recent declines in mortgage interest rates. However, single-family permits continued to be soft in March, declining 1.1% for the month to a 808,000 annual pace, the lowest since August 2017.
On a regional and year-to-date basis, single-family starts are down 21% in the housing affordability challenged West, 20% in the Midwest, 2% in the Northeast and up 5% in the South.
Multifamily starts were unchanged from February to March at a 354,000 annual rate. However, comparing the first quarter of 2019 to the first quarter of 2018 shows a 19% decline for 5+ unit production.
Recent production declines are clear in the current estimates of units under production. As of March 2019, there were 531,000 single-family homes under construction. While this is 4.5% higher than a year ago, it is down from the 543,00 peak count from January 2019. Similarly, there are currently 595,000 apartments under construction, which is more than 3% lower than a year ago and down from the peak count of 625,000 in February 2017. The combination of these declines in current construction activity are seen clearly in the graph below, with declines for total housing under construction for all of 2019.
VIEWS41KSHARE221Designed to amplify nature, these cozy, modern cabins invite you to embrace the simple life.
Winter is the perfect time to rally family and friends for a cabin getaway, featuring days in the unspoiled snow and nights spent nursing hot (spiked) cider around the fireplace. If you’re dreaming about your own rustic retreat in the wilderness, look no further for inspiration than these 20 modern winter cabins below that demonstrate a deep respect for their snowy, wooded surrounds.
Described by Seattle–based Olson Kundig Architects as “a steel box on stilts,” this three-story cabin in upstate Washington is fitted with four 10′ x 18′ steel shutters that are rolled over the glass windows, so it can be sealed off from the elements when not in use. In fact, the client requested that Delta Shelter be virtually indestructible: the steel exterior makes it fire-resistant, while its steel-beam legs protect it from flooding.
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Architect Håkon Matre Aasarød, partner at Oslo–based studio Vardehaugen Architects, led the design of Cabin Vindheim—an off-grid cabin deep in the alpine landscape near Lillehammer, Norway, whose spaceship-like appearance gives it an otherworldly presence.
This sleek cabin by Reiulf Ramstad Arkitekter adapts to the slope of the terrain, and divides into two branches of living areas. The same timber cladding of the exterior extends onto the roof, creating a unified expression.
The minimalist cabins of this Norwegian hotel offer elegant shelter, while striking a remarkable communion with the sublime, natural environment. Billed a “landscape hotel,” the lodge features nine separate rooms that offer distinct views of the topography.
International firm Snøhetta created this new addition to Sweden’s Treehotel that’s perfect for stargazing. Barring a fear of heights, you can choose to lay your sleeping bag on the double-layered net that connects the cabin’s two bedrooms and enjoy a night under the stars.