January home sales spur optimism for 2020 New York State housing market
Albany, NY – Closed sales and pending sales were up in January in year-over-year comparisons, fueling optimism for a robust 2020 housing market, according to the housing market report released today by the New York State Association of REALTORS®.
Closed sales improved 4.1-percent to 9,204 units from 8,842 houses at the start of 2019. Pending sales were also up in year-over-year comparisons, escalating to 8,895 houses – a 5.6-percent increase over January 2019’s total of 8,421 homes.
The median sales price continued to appreciate as the calendar turned to 2020. The statewide median sales price was $300,000 – an increase of 9.1-percent from the January 2019 median of $275,000.
New listings were down to 14,370 homes – a 2.9-percent decrease from 14,806 homes in January of 2019.
The monthly average commitment rate for a 30-year fixed mortgage continues to be affordable, dropping to 3.62-percent in January according to Freddie Mac. Days on the market remained unchanged from January 2019 at 77 days.
Data and analysis compiled for the New York State Association of REALTORS® by Showing Time Inc.
Home prices increased in November, rising only 0.2% from the previous month’srevised pace, but up 4.9% from 2018, according to the latest monthly House Price Index from the Federal Housing Finance Agency.
The FHFA monthly HPI is calculated using home sales price information from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac. Because of this, the selection excludes high-end homes bought with jumbo loans or cash sales.
The report explains that across the nine census divisions, the East North Central division saw the strongest appreciation growth, increasing by 0.8% November, whereas the Mountain division experienced no growth, as appreciation declined 0.1%.
However, the FHFA highlights that the 12-month changes were all positive, with the New England and the West South Central divisions posting the smallest gain of 3.8%, and the Mountain division leading the way with a 6.3% increase.
These are the states located in each division mentioned:
East North-Central: Michigan, Wisconsin, Illinois, Indiana, Ohio
Mountain: Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, New Mexico
New England: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut
West South Central: Oklahoma, Arkansas, Texas, Louisiana
The chart below compares 12-month price changes to the prior year:
Millennials are moving more often and living in their homes for a shorter period than previous generations. The share of young adults who have lived in their current home for less than two years is nearly 12 percentage points higher than in 1960, according to a new Zillow® analysis.
While 33.8% of people between 25- and 34-years-old had lived in their home for less than two years in 1960, that share rose to 45.3% by 2017.
Millennials are marrying and having children later in life than their predecessors, which likely plays a role in their shorter housing tenure as these major life milestones are often catalysts for settling into a more stable housing situation, Zillow said.
The majority (53.5%) of young adults who move do so within the same metro area, perhaps to be closer to work or into a larger place as their family grows. An increasing share are moving to a different metro within the same state. Young adults today are more likely than previous generations to live in urban cores, so these could be job-related moves from college towns or rural areas into nearby cities where job growth has been concentrated in recent years. Movers Montreal are great, they are a good option to hire when you need services and the price is reasonable. These guys are packing a 20” truck, lots of soft furniture wraps, good moving experience, and definitely a great attitude.
“Shifting demographic headwinds and evolving workplace norms have significantly altered the housing decisions of young adults today. Untethered from family and enticed by new job opportunities, young adults are more mobile today than they have been over the past nearly 60 years,” said Sarah Mikhitarian, senior economist at Zillow. “Instead of getting married or starting a family in their early to mid-twenties as was the norm in past decades, many are waiting until they are established in their careers. And the typical career trajectory has fundamentally changed since the 1960s as well – rather than climbing a corporate ladder, many are choosing to hop from one role or function to the next, often requiring a move to a new location.”
Among the 35 largest metros in the U.S., the greatest increases in the share of young adults that had recently moved were in Boston (up 22 percentage points since 1960), Pittsburgh (up 20.9), Detroit (up 17.7) and Philadelphia (up 17.4). This share of recently moved young adults has fallen since 1960 in four metros –Las Vegas (down 6.7 percentage points), Riverside (down 6.3), San Diego (down 3.8) and Orlando (down 1.3).
1960 – Share of Young Adults Who Had Lived in Home Less Than Two Years
2017 – Share of Young Adults Who Had Lived in Home Less Than Two Years
Select a quarter and then press “Play” to initiate the interactive map. To get the performance ranking for a specific MSA, zoom in or scroll over the map or click on the numerical ranking legend for wider comparisons.N
2019Q2 HoHM Report: Housing market looking more sustainable
While home sales data have been a bit slower so far in 2019, the national LIHHM* sees positive, more sustainable trends from the housing sector. With the highest reading in three years, the index points to healthy housing activity over the next year or so.
Slower house price gains are improving housing sector sustainability, while reduced mortgage rates, solid job gains, and rising wages should lift home buyer demand this year. Although supply constraints remain, these fundamentals are positive for housing demand
More than half of the country’s 400 MSAs have a positive rating as house price gains in many areas have decelerated over the past year. The slowdown is more pronounced in larger cities, especially along the Pacific Coast where price appreciation is now below average.
Existing home sales dropped during 2018 as rising mortgage rates squeezed potential home buyers. Data show that the declines were sharper in states with the highest median sales prices. The outlook for the remainder of 2019 has improved with lower mortgage rates
* Leading Index of Healthy Housing Markets (LIHHM): A data-driven view of the near-term performance of housing markets based upon current health indicators for the national housing market and 400 metropolitan statistical areas (MSAs) and divisions across the country.
Housing outlook continues to brighten with the LIHHM in positive territory
The national LIHHM rose to a positive reading of 106.3 this quarter, the highest reading in three years. Demand metrics (led by solid job growth and strong household formations) remain highly positive and are indicative of near term health for the housing market. National house price growth continues to decelerate and is near the long-term trend, a positive for sector sustainability. Home buyer demand should respond positively to lower mortgage rates and faster income growth, although continued supply constraints are likely to cap any sales gains. Regionally, more than half of the LIHHM performance rankings are positive and indicate a healthy outlook for housing in those local markets. Demand factors at a regional level are generally supportive with low unemployment rates and faster household formations. Moreover, housing affordability is improving in many local areas as income growth outpaces house price gains while mortgage financing costs have declined.
In a recent analysis, LendingTree surveyed 2,095 American homeowners aged 22 and older about their perceptions of owning a property versus renting.
According to the company’s study, 67% of American homeowners believe owning a home is a better option than renting. However, LendingTree discovered that for many American homeowners, renting is still a viable option.
“About 15% of homeowners believe renting is easier than owning a home, and another 18% are neutral on the topic,” LendingTree writes. “Just 13% of homeowners across all ages wish they could go back to renting, but when broken down by age, 1 out of every 5 homeowners ages 22 to 37 say they miss renting.”
Interestingly, LendingTree says this breakdown is highly dependent on the number of years a homeowner has lived in their home.
“In most cases, the longer that survey respondents have been in their homes, the more likely they are to believe owning is easier,” LendingTree writes. “That changes for those who have owned for a decade or longer. Nearly 72% of homeowners who have spent seven to nine years in their home agree with the statement, compared with 65% of those with at least 10 years in their home.”
Additionally, the report found that age also plays a major role in homeowner satisfaction.
According to the study, 23% of Gen Xers claimed to be dissatisfied with their home purchases, this was followed by 21% of Millennials who expressed the same sentiment.
When it came to Baby Boomers and those aged 73 and older, LendingTree reports that only 14% and 3% held the same regrets, respectively.
Overall, the study revealed that homeownership tenure is a tremendous indication of whether or not a person is likely to return to the rental market.
“Our survey found that the longer you own your home, the less likely you’ll want to rent again,” LendingTree writes. “Only 7% of respondents who have owned their home for at least 10 years wish they could go back to renting, compared with 19% of those who have owned for three years or less.”
The image below highlights the percentage of Americans who wish to return to renting after owning a home:
(Click to enlarge)
Note: LendingTree commissioned Qualtrics to collect the responses of 2,095 American homeowners aged 22 and older from the dates of March 22-27, 2019.
But Oregon’s new law will not fix the underlying problem of high housing costs, and it could even make matters worse for vulnerable families.
THE U.S. HAS TWO HOUSING AFFORDABILITY PROBLEMS. RENT CONTROL WON’T FIX EITHER OF THEM.
The first affordability problem is that the nation’s poorest 20 percent have too little income to afford minimum quality housing without receiving subsidies. That’s not a failure of housing markets, but a function of the low wages and unstable incomes generated by labor markets. Poor families could be helped by expanding existing programs such as housing vouchers or the Earned Income Tax Credit (EITC) to cover more poor households. But to fund those programs, middle- and higher-income households would have to pay more in taxes—which state and federal lawmakers have been reluctant to propose.
The only effective long-term fix to the housing scarcity challenge is to build more housing—especially building less expensive housing in cities and neighborhoods where demand is high. This would require substantial changes to local zoning in nearly every U.S. city. But homeowners are a powerful lobby at every level of government, and only a fewboldelectedofficials have dared to challenge the NIMBYs.
EVEN WELL-DESIGNED RENT CONTROL POLICIES CAN REDUCE HOUSING SUPPLY, HARMING VULNERABLE FAMILIES.
The Oregon law tries to foresee and forestall some ways in which rent control can push landlords and developers into harmful responses. For instance, when landlords cannot raise rents, they often choose to not provide adequate maintenance. The Oregon law allows relatively generous annual rent increases of 7 percent plus inflation to avoid this problem. Although the bill is thoughtfully designed, any such regulations create incentives for developers and landlords to seek out loopholes. Past research shows that property owners in rent controlled cities are more likely to convert apartment buildings into condominiums. A developer considering building an eight-unit apartment building might revise their plans to build only five apartments, just under the cap set by Oregon’s law—thus contributing less new housing overall. Landlords may pre-emptively raise the rent more as they approach the 15 year mark when controls kick in. Even the increased tenant protections could backfire, encouraging landlords to screen out less desirable tenants—including many low-income families with young children.
FIXING HOUSING AFFORDABILITY WILL REQUIRE COURAGE FROM POLITICIANS, AND SOME SACRIFICES FROM AFFLUENT VOTERS.
Rent control is similar to another popular housing policy, inclusionary zoning, in that it tries to push the onus for improving housing affordability onto for-profit developers and landlords. Self-identified progressive homeowners may be willing to support politicians who advocate these policies. But neither rent control nor inclusionary zoning address the underlying causes of housing affordability, and indeed have the potential to discourage new supply and make the problem worse. Politicians need to be honest with their constituents about the cost of better policies as well as the costs of failing to act. Affluent households should pay more taxes to support poor families, and should allow new apartments in their own backyards.
Information compiled by Freddie Mac shows that mortgage rates continued to increase in the fall. The 30-year FRM – Commitment rate, inched up by four basis points to 4.87 percent from 4.83 percent in October. With the November increase, the 30-year FRM – Commitment rate, was at the highest level since February 2011. As a result of rising home costs, builder confidence in the market for newly-built single-family homes fell four points to 56 in December and affordability was at the lowest level in a decade.
The Federal Housing Finance Agency reported that the contract rate for newly-built homes, inched up 10 basis points to 4.77 percent in November. Mortgage rates on purchases of newly built homes (MIRS) increased by 11 basis points over the month of November to 4.86 percent.
After increasing the federal funds rate to 2.25 percent to 2.50 percent at the December Federal Open Market Committee meeting, the Fed remains cautiously on track to continue its gradual approach to raising interest rates with one or two possible rate hikes in 2019.
Moreover, the 10-year Treasury rate fell from above 3.21% at the start of November to 2.7% at the start of January. This decline will reduce mortgage interest rates. The average market rate, according to Freddie Mac, was 4.51% at the start of January.
Home prices rose during each month of the first quarter, continuing a climb that began in the early part of this decade, a new report from the Federal Housing Finance Agency showed.
The FHFA’s House Price Index for March, which is the most recent data available, showed that seasonally adjusted monthly index for March was up 0.6% from February.
Overall, house prices rose 1.4% during the first quarter of 2017, the FHFA report showed. On a year-over-year basis, house prices rose 6% from the first quarter of 2016 to the first quarter of 2017.
“The steep, multi-year rise in U.S. home prices continued in the first quarter,” FHFA Deputy Chief Economist Andrew Leventis said.
“Mortgage rates during the quarter remained slightly elevated relative to most of last year, but demand for homes remained very strong,” Leventis added. “With housing inventories still languishing at extremely low levels, the strong demand led to another exceptionally large quarterly price increase.”
Low inventory is also a concern of the National Association of Realtors, as its latest existing home sales report showed that home sales fell in April and homes flew off the market at a rate not seen since 2011.
The FHFA report also showed that home prices rose in 48 states and the District of Columbia between the first quarter of 2016 and the first quarter of 2017.
(Click the image to enlarge. Image courtesy of the FHFA.)
According to the FHFA report, the top five areas in annual appreciation were: District of Columbia at 13.9% Colorado at 10.7%; Idaho at 10.3%; Washington at 10.2%; and New Hampshire at 9.5%.
The FHFA report also showed that among the 100 largest metropolitan areas in the U.S., the annual price increase in Grand Rapids-Wyoming, Michigan was the highest in the nation, at 13.7%.
Prices were weakest in San Francisco-Redwood City-South San Francisco, California, where prices fell by 2.5%.
Of the nine census divisions, the Pacific division showed the strongest increase in the first quarter, with a 2% quarterly increase and a 7.7% increase since the first quarter of 2016, the FHFA report showed.
Zillow, an online marketplace, conducted a study to show the top 10 housing markets for empty nesters in the U.S.
As it turns out, the pricey markets and places with weak labor markets have the highest concentrations of empty nests, the report, which is based on the most recent U.S. Census Bureau data from 2015, shows.
And the lowest densities of empty nesters are found in booming cities with strong job markets, retirement communities and new family-oriented areas.
In other words, this study by Ellie Mae which shows where Millennials flock will be the last places you might find empty nesters. And you can count metros in Florida and California off the list as well.
Empty nests are homes where the heads of the household are 55 years or older, own the home and have lived in it 10 or more years; there are no children of any age living in the home. These homes are gaining ground as the Baby Boomers age, rising to 15.5% of all households in 2015.
Here are the top 10 metros with the highest percentage of empty nesters:
30-year fixed-rate mortgage (FRM) averaged 4.23 percent with an average 0.5 point for the week ending March 23, 2017, down from last week when it averaged 4.30 percent. A year ago at this time, the 30-year FRM averaged 3.71 percent.
15-year FRM this week averaged 3.44 percent with an average 0.5 point, down from last week when it averaged 3.50 percent. A year ago at this time, the 15-year FRM averaged 2.96 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.
Quote Attributed to Sean Becketti, chief economist, Freddie Mac.
“The 10-year Treasury yield fell about 10 basis points this week. The 30-year mortgage rate moved with Treasury yields and dropped 7 basis points to 4.23 percent. This marks the greatest week-over-week decline for the 30-year mortgage rate in over two months, a stark contrast from last week’s jump following the FOMC announcement.”