Mortgage rates average 2.86% | Lewisboro Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 2.86 percent.

“It’s Groundhog Day for mortgage rates, as they have remained virtually flat for over two months. The holding pattern in rates reflects the markets’ view that the prospects for the economy have dimmed somewhat due to the rebound in new COVID cases,” said Sam Khater, Freddie Mac’s Chief Economist. “While our collective attention is on the pandemic, fundamental changes in the economy are occurring, such as increased migration, the extended continuation of remote work, increased use of automation, and the focus on a more energy efficient and resilient economy. These factors will likely lead to significant investment and new post-pandemic economic models that will spur economic growth.”

News Facts

  • 30-year fixed-rate mortgage averaged 2.86 percent with an average 0.7 point for the week ending September 16, 2021, down slightly from last week when it averaged 2.88 percent. A year ago at this time, the 30-year FRM averaged 2.87 percent.
  • 15-year fixed-rate mortgage averaged 2.12 percent with an average 0.6 point, down from last week when it averaged 2.19 percent. A year ago at this time, the 15-year FRM averaged 2.35 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.51 percent with an average 0.1 point, up from last week when it averaged 2.42 percent. A year ago at this time, the 5-year ARM averaged 2.96 percent.

The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. 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.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

Pending sales up 6% | Bedford Hills Real Estate

Strong demand pushed home prices up 14% from a year earlier.

Strong home buying demand continued through the end of August, with pending sales up 6% from a year earlier, even as new listings of homes for sale fell 7% from 2020 levels. Measures of competition, such as the share of homes sold above list price and the number of homes sold in two weeks, are continuing to soften. Still, home prices remain high, up 14% from the same time a year ago.

“More homes were listed this summer, but they were quickly snatched up by home buyers even as bidding wars have become more rare,” said Redfin Lead Economist Taylor Marr. “The market hasn’t cooled off any further than it usually does this time of year, and we expect home buying demand to remain strong through the fall.”

Key housing market takeaways for 400+ U.S. metro areas:

Unless otherwise noted, the data in this report covers the four-week period ending September 5. Redfin’s housing market data goes back through 2012.

Data based on homes listed and/or sold during the period:

  • The median home-sale price increased 14% year over year to $358,250.
  • Asking prices of newly listed homes were up 10% from the same time a year ago to a median of $353,500, on par with where asking prices were in late April. This was down 2% from the all-time high set during the four-week period ending June 27.
  • Pending home sales were up 6% year over year, but down 9% from their 2021 peak hit during the four-week period ending May 30.
  • New listings of homes for sale were down 7% from a year earlier. The number of homes being listed is in a typical seasonal decline, down 16% from the 2021 peak reached during the four-week period ending June 27.
  • Active listings (the number of homes listed for sale at any point during the period) fell 23% from 2020. Active listings were up 14% from their 2021 low set during the four-week period ending March 7, but have declined 3% from their 2021 peak hit during the four-week period ending August 8.
  • 47% of homes that went under contract had an accepted offer within the first two weeks on the market, above the 43% rate of a year earlier, but down 9 percentage points from the 2021 peak set during the four-week period ending March 28.
  • 34% of homes that went under contract had an accepted offer within one week of hitting the market, up from 31% during the same period a year earlier, but down 9 percentage points from the 2021 peak reached during the four-week period ending March 28.
  • Homes that sold were on the market for a median of 19 days, up from the all-time low of 15 days seen in late June and July, and down from 33 days a year earlier.
  • 50% of homes sold above list price, up from 33% a year earlier. This measure has been falling since the four-week period ending July 11, when it peaked at 55%.
  • On average, 4.9% of homes for sale each week had a price drop, up 0.8 percentage points from the same time in 2020, and the highest level since the four-week period ending October 13, 2019.
  • The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, decreased to 101.4%. In other words, the average home sold for 1.4% above its asking price. This measure was down 0.9 percentage points from its peak hit during the four-week period ending July 11 and up 2.1 percentage points from a year earlier.

Other leading indicators of homebuying activity:

Refer to our metrics definition page for explanations of all the metrics used in this report.

Home Sale Prices Up 14% From 2020
Asking Prices on New Listings Up 10% From 2020
Pending Sales Up 6% From 2020
New Listings of Homes Down 7% From 2020
Active Listings of Homes For Sale Down 23% From 2020
47% of Pending Sales Under Contract Within Two Weeks
34% of Pending Sales Under Contract Within One Week
Days on Market Inches Up
Over Half of Homes Sold Above List Price
5% of Listings Had Price Drops
Sale-to-List Price Ratio Drops Further Below 102%
Redfin Homebuyer Demand Index Up 19% From 2020

Share on facebook Share on twitter Share on linkedin Share on pinterest

read more…

redfin.com/news/housing-market

The single biggest risk to housing is rising mortgage rates | Bedford Real Estate

This is not a repeat of the 2008 housing bubble

The wounds from the Great Recession of the mid-2000s are still healing, especially when it comes to housing. An estimated 10 million people lost their homes to foreclosure from 2006 to 2014, following a period of frenzied and speculative home buying fueled by easy credit. The housing market is yet again on a tear with home prices up nearly 19% nationally compared with last year, and that has people rightfully worried that another housing bubble is brewing.

In order to determine if the current housing market is in a bubble, one needs to ask what constitutes a housing bubble. A bubble is present when the price of an asset is rising faster than the fundamentals can justify, often driven by overly optimistic speculation or loose financing. Moreover, a bubble requires conditions that would permit a crash—that is, a period of asset prices falling faster than fundamentals. Rising prices alone, however, are not a sign of a bubble.

Unlike the last housing boom, one could argue that home price growth since the start of the pandemic was justifiable. The demographics of the U.S. were already supporting housing growth and the desire to own only increased as people saved more and spent more time at home. The lifestyle change brought on by the pandemic caused many Americans to reassess their living arrangements, including some renters that turned into house hunters and some existing homeowners that sold to move into a larger home.

The jump in home buying demand hit right as existing housing supply declined rapidly for a variety of reasons, including fear of COVID-19. Home builders, most of whom became more prudent following the last cycle, were cautious with how many homes they were bringing to the market, resulting in equally tight new home inventory.

The supply and demand mismatch pushed prices upward, but that was just the tip of the iceberg for rising home values. Some Americans became much wealthier over the past year following a 31% run-up in the S&P 500 and a nearly 20% jump in home equity. Others became wealthier on a relative basis as remote work led to increased migration, often from higher cost areas to lower cost ones.

Of the contributors to rising prices, none have been more powerful than mortgage interest rates. The interest rate on a 30-year fixed mortgage averaged 6% from 2002 to housing’s peak in 2005. For comparison, the average mortgage rate from April 2020 through today is just 3%. 

Historically, a gut check of a housing bubble is the home-price-to-income ratio. While home prices appear high compared with incomes, this does not account for interest rates. When we look at the home-payment-to-income ratio, an important measure of affordability, levels are below last cycle, showing the power of cheap financing.

Further, safety measures have been put in place since the Great Recession to help prevent a similar housing collapse. Mortgage credit availability is starkly tighter than in the mid-2000s and the often more risky adjustable rate mortgages represent less than 5% of total purchase and refinanced loans compared with over 35% at the peak of the last cycle. 

However, there are unhealthy signs in housing as well. Investors, a staple of the last cycle, are back. One common measure of tracking investor activity is all-cash sales, which represent 23% of total transactions. While all-cash sales are up from 16% last year, they are still down from a high of 35% in 2011. Home shoppers are feeling the impact of investors active in today’s market, especially at the lowest price points. 

The fear-of-missing-out mentality has also returned, which has resulted in some making rash decisions. People are fearful that if they don’t buy today, they may miss their chance at home ownership forever. This thought process is leading to bidding wars and further upward pressure on pricing, which is resulting in first-time buyers and lower-income home shoppers finding themselves priced out of the market. Others believe that the frenzy has gone too far, and even some that are financially able to buy a home have reached a tipping point and are balking at prices.

As we move forward, we can take comfort that many of the mortgage guardrails in place are working, with creditworthiness strong and speculative lending largely absent from the market. While today’s prices can be justified, it is unwise to believe they can only go up. 

The single biggest risk to housing—rising mortgage rates—is a real possibility in the next year, and that could bring prices down. Further, other economic, financial, and confidence challenges could also result in a drop or flattening of home prices, even with solid buyers in place. But a drop or flattening in home prices is a far cry from the crash we saw during the Great Recession.

read more…

fortune.com/2021/housing-bubble

Rent prices up 10.3% | Pound Ridge Real Estate

Asking rents rose by 10.3% year over year in August, marking the first double-digit YOY increase in the history of the Yardi Matrix Multifamily National Report dataset.

At the same time, overall rents have risen by $25 in August and $140 this year to date, up to a national average rent of $1,539. Overall occupancy has also risen by 0.9% from one year ago, up to 95.6%.

https://www.yardimatrix.com/

Every metro tracked by Yardi Matrix showed positive year-over-year rent growth in August, except for Queens, New York, at -0.5% and Midland-Odessa, Texas, at -5.5%. Rent growth recovery is widespread, no longer concentrated in Southwest and Southeast tech hubs, owing to residents returning to urban cores, job growth, and an increased savings rate.

All of the top 30 metros now show positive YOY rent growth for the first time since the beginning of the pandemic. Phoenix led the top 30 markets for YOY rent growth at a staggering 22%, followed by Tampa, Florida, at 20.2% and Las Vegas at 19.2%. According to Yardi, all three markets benefit from strong job growth and excess savings that enable renters to afford more expensive apartments. New York and San Francisco remain at the bottom at 2.8% and 1.4%, respectively, below pre-pandemic rent levels.

https://www.yardimatrix.com/

While YOY rent growth may seem incredibly strong in some gateway markets, Yardi notes these numbers are slightly misleading, as they compare today’s rents with last August, when rent growth in many gateway metros had hit bottom. In an alternate comparison of rent growth pre- and post-pandemic, five out of the seven gateway markets have surpassed rent growth levels observed in March 2020. Miami is in the double digits at 16.2%, followed by Boston at 7%, Chicago at 6.4%, Los Angeles at 4.9%, and Washington, D.C., at 3.9%.

New York and San Francisco remain negative at -3.8% and -3.2%, respectively. Yardi attributes this ongoing growth decline in part to continued remote work, particularly at large companies that have delayed returns to the office due to the surge in the delta variant.

On a month-over-month basis, rents rose by 1.7% in August. All of the top 30 metros saw positive month-over-month rent growth, while 26 out of 30 showed 1% rent growth or higher. Las Vegas led the way with 3.3% rent growth month to month, followed by California’s Inland Empire and Seattle at 3.1%.

Many of the metros in the top 10 for August are secondary markets in the Southeast and Southwest. Kansas City, Missouri, fell to the bottom of the top 30 at 0.2%, followed by San Francisco at 0.5% and the Twin Cities at 0.7%.

Rents for single-family build-to-rent communities rose 13.9% YOY in August, far outpacing growth in the traditional multifamily sector. All of the top 30 metros showed positive rent growth year over year, while 20 out of the top 30 showed double-digit rent growth. Tampa led the way with 38.4% YOY growth, followed by Miami at 26.7%.

Occupancy at single-family build-to-rent communities has risen 1.1% YOY, led by San Antonio—up 6.7% YOY—and Indianapolis and Houston, both up 5.6%.

read more…

https://www.multifamilyexecutive.com/property-management/rent-trends/yardi-asking-rents-rise-a-record-breaking-10-3-yoy-in-august_o?utm_source=newsletter&utm_content=Article&utm_medium=email&utm_campaign=MFE_090921&

Single family construction spending up 41% | Bedford Corners Real Estate

NAHB analysis of Census Construction Spending data shows that total private residential construction spending rose 0.5% in July to a seasonally adjusted annual rate of $773.0 billion. Total private residential construction spending was 27% higher than a year ago.

The monthly gains are attributed to the strong growth of spending on single-family construction and improvements. Single-family construction spending rose to a $416.3 billion annual pace in July, up by 0.9% over the upward revised June estimates. It increased by 47.1% on a year-over-year basis. Spending on improvements edged up 0.2% in July, after a 0.7% dip in June. Multifamily construction spending stayed flat in July but was 14.9% higher than a year ago.

The NAHB construction spending index, which is shown in the graph below (the base is January 2000), illustrates the solid growth in single-family construction and home improvement from the second half of 2019 to February 2020, before the COVID-19 hit the U.S. economy, and the quick rebounds since July 2020. New multifamily construction spending has picked up the pace after a slowdown in the second half of 2019.

Private nonresidential construction spending slipped to a seasonally adjusted annual rate of $458.0 billion in July, a 0.2% dip from upwardly revised June estimates. And it was 3.6% lower than a year ago. The largest contribution to this month-over-month nonresidential spending decrease was made by the class of power ($0.8 billion), followed by transportation ($0.2 billion), and class of communication ($0.1 billion).

read more…

eyeonhousing.org/2021/09

Home prices rise 18.6% | Chappaqua Real Estate

41% increase since 2006

  • Home prices rose 18.6% annually in June, up from a 16.8% increase in May, according to the S&P CoreLogic Case-Shiller national home price index.
  • Prices are now 41% higher than their last peak during the housing boom in 2006.
  • Home prices continue to surge due to strong demand and persistent low supply.
Real estate agents Rosa Arrigo, center, and Elisa Rosen, right, work an open house in West Hempstead, New York on April 18, 2021.

Douglas Elliman Real Estate open house

Home prices rose 18.6% annually in June, up from the 16.8% increase in May, according to the S&P CoreLogic Case-Shiller national home price index.

That is the largest annual gain in the history of the index dating back to 1987. Prices nationally are now 41% higher than their last peak during the housing boom in 2006.

Unlike other median price surveys, which can be skewed by the type of homes selling, this measures repeat sales of similar homes over time.

The 10-City composite rose 18.5%, up from 16.6% in the previous month. The 20-City composite was up 19.1%, up from 17.1% in the previous month.

Phoenix, San Diego, and Seattle reported the strongest price increases of the 20 cities. Prices in Phoenix increased 29.3% year-over-year. In San Diego they rose 27.1%, and in Seattle they were up 25.0%. All 20 cities reported higher price increases in the year ending June 2021 versus the year ending May 2021.

“The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country,” said Craig Lazzara, managing director and global head of index investment strategy at S&P DJI. “In June, all 20 cities rose, and all 20 gained more in the 12 months ended in June than they had gained in the 12 months ended in May.”

Prices in just about every city in the 20-city index, except for Chicago, are at all-time highs, he said, as are the national composition and the 10- and 20-city indices.

Home prices continue to surge due to strong demand and persistent low supply. While supply has been increasing month to month, it was still down 12% in July year-over-year, according to the National Association of Realtors.

Peter Boockvar, chief investment officer at Bleakley Advisory group, said prices are rising at “a really out of control pace that is unsustainable and unhealthy.”

Home sales, however, have started to cool. Signed contracts on existing homes dropped in July, according to the National Association of Realtors. Prices usually lag sales by about six months, so that could be a sign that price gains will stop accelerating as they have been for over a year.

“According to new Ally Home data, 45% of buyers say they have delayed purchasing a home due to market conditions, with 29% citing high home prices and 20% indicating homes selling too quickly as factors in this delay,” says Glenn Brunker, president of Ally Home.

Low mortgage rates continue to keep prices strong. Rates will rise if the Federal Reserve slows its purchases of mortgage-backed bonds, but so far that is not expected to happen in the near term.

read more…

cnbc.com/realestate

Mortgage applications down 6.9% | Armonk Real Estate

A "For Sale" sign is posted outside a residential home in the Queen Anne neighborhood of Seattle, Washington, U.S. May 14, 2021.   REUTERS/Karen Ducey

A “For Sale” sign is posted outside a residential home in the Queen Anne neighborhood of Seattle, Washington, U.S.

U.S. applications for home mortgages decreased by the most in almost five months driven by sharp declines in refinancing activity and purchase applications.

The Mortgage Bankers Association (MBA) said on Wednesday its seasonally adjusted market index fell 6.9% in the week ending June 25 from a week earlier, the largest drop since early February. This reflected an 8.2% decrease in applications for refinancing existing loans and a 4.8% drop in applications to purchase a home.

The average contract interest rate for traditional 30-year mortgages increased to 3.20% last week from 3.18% the prior week.

“Purchase applications for conventional loans declined last week to the lowest level since last May,” Mike Fratantoni, MBA’s Senior Vice President and Chief Economist, said in a statement. “The average loan size for total purchase applications increased, indicating that first-time homebuyers, who typically get smaller loans, are likely getting squeezed out of the market due to the lack of entry-level homes for sale.

read more…

reuters.com/business/

Case-Shiller prices up 14% | North Salem Real Estate

S&P Dow Jones Indices (S&P DJI) today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for April 2021 show that home prices continue to increase across the U.S. More than 27 years of history are available for the data series, and can be accessed in full by going to https://www.spglobal.com/spdji/.


YEAR-OVER-YEAR


The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 14.6% annual gain in April, up from 13.3% in the previous month. The 10-City Composite annual increase came in at 14.4%, up from 12.9% in the previous month. The 20-City Composite posted a 14.9% year-over-year gain, up from 13.4% in the previous month.

Phoenix, San Diego, and Seattle reported the highest year-over-year gains among the 20 cities in April.

Phoenix led the way with a 22.3% year-over-year price increase, followed by San Diego with a 21.6% increase and Seattle with a 20.2% increase. All 20 cities reported higher price increases in the year ending April 2021 versus the year ending March 2021.

The charts on the following page compare year-over-year returns of different housing price ranges (tiers) for Phoenix and San Diego.


MONTH-OVER-MONTH


Before seasonal adjustment, the U.S. National Index posted a 2.1% month-over-month increase, while the 10-City and 20-City Composites both posted increases of 1.9% and 2.1% respectively in April. After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.6%, and the 10-City and 20-City Composites both posted increases of 1.4% and 1.6% respectively. In April, all 20 cities reported increases before and after seasonal adjustments.


ANALYSIS


“Housing prices accelerated their surge in April 2021,” says Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “The National Composite Index marked its eleventh consecutive month of accelerating prices with a 14.6% gain from year-ago levels, up from 13.3% in March. This acceleration is also reflected in the 10- and 20-City Composites (up 14.4% and 14.9%, respectively). The market’s strength is broadly-based: all 20 cities rose, and all 20 gained more
in the 12 months ended in April than they had gained in the 12 months ended in March.
“April’s performance was truly extraordinary. The 14.6% gain in the National Composite is literally the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data.

Housing prices in all 20 cities rose; price gains in all 20 cities accelerated; price gains in all 20 cities were in the top quartile of historical performance. In 15 cities, price gains were in top decile. Five cities – Charlotte, Cleveland, Dallas, Denver, and Seattle – joined the National Composite in recording their all-time highest 12-month gains.

“We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes.


April’s data continue to be consistent with this hypothesis. This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question.


“Phoenix’s 22.3% increase led all cities for the 23rd consecutive month, with San Diego (+21.6%) and Seattle (+20.2%) providing strong competition. Although prices were strongest in the West (+17.2%) and Southwest (+16.9%), every region logged double-digit gains.”

SUPPORTING DATA


The chart below depicts the annual returns of the U.S. National, 10-City Composite and 20-City Composite Home Price Indices. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, recorded a 14.6% annual gain in April 2021. The 10-City and 20-City Composites reported year-over-year increases of 14.4% and 14.9% respectively.


The following chart shows the index levels for the U.S. National, 10-City and 20-City Composite Indices. As of April 2021, average home prices for the MSAs within the 10-City and 20-City Composites are exceeding their winter 2007 levels.

Table 1 below shows the housing boom/bust peaks and troughs for the three composites along with the current levels and percentage changes from the peaks and troughs.

2006 Peak 2012 Trough Current
Index Level, Date, Level, Date, From Peak (%), Level, From Trough (%), From Peak (%)
National 184.61 Jul-06 134.00 Feb-12 -27.4% 249.04 85.9% 34.9%
20-City 206.52 Jul-06 134.07 Mar-12 -35.1% 257.10 91.8% 24.5%
10-City 226.29 Jun-06 146.45 Mar-12 -35.3% 270.21 84.5% 19.4%



Table 2 below summarizes the results for April 2021. The S&P CoreLogic Case-Shiller Indices could be revised for the prior 24 months, based on the receipt of additional source data.
April 2021, April/March, March/February, 1-Year
Metropolitan Area Level, Change (%), Change (%), Change (%)
Atlanta 177.59 1.7% 1.8% 12.3%
Boston 267.60 2.5% 2.6% 16.2%
Charlotte 196.89 2.4% 2.6% 15.0%
Chicago 160.29 1.9% 1.7% 9.9%
Cleveland 147.79 1.9% 1.6% 13.3%
Dallas 226.77 2.9% 2.8% 15.9%
Denver 265.83 2.7% 3.3% 15.4%
Detroit 147.70 2.2% 1.3% 13.3%
Las Vegas 225.33 2.5% 2.3% 12.5%
Los Angeles 339.18 1.8% 2.4% 14.7%
Miami 287.84 2.4% 1.9% 14.2%
Minneapolis 206.33 2.2% 1.8% 11.3%
New York 232.01 0.8% 0.8% 13.5%
Phoenix 252.55 3.3% 3.4% 22.3%
Portland 283.79 2.1% 2.6% 15.4%
San Diego 331.47 3.2% 3.4% 21.6%
San Francisco 317.81 3.1% 3.3% 15.1%
Seattle 324.88 3.1% 4.7% 20.2%
Tampa 266.20 2.3% 1.9% 15.4%
Washington 273.10 2.3% 2.1% 13.6%
Composite-10 270.21 1.9% 2.0% 14.4%
Composite-20 257.10 2.1% 2.2% 14.9%
U.S. National 249.04 2.1% 2.0% 14.6%

Sources: S&P Dow Jones Indices and CoreLogic
Data through April 2021

Northeast new homes sales rise 48% | Waccabuc Real Estate

After notable and expected downward revisions for prior months, May recorded a decline of 5.9% for sales of newly-constructed single family homes, according to estimates from the Census Bureau and HUD. The May seasonally adjusted annual rate (769k) was the lowest in a year, due to builders slowing sales as a consequence of higher material costs and declining availability of labor, material and lots.

Residential demand continues to be supported by low interest rates, a renewed consumer focus on the importance of housing, and solid demand in lower-density markets like suburbs and exurbs. However, higher building costs, longer delivery times, and general unpredictability in the residential construction supply-chain are having measurable impacts on new home prices. In May, the median price of a newly-built home was 18% higher than a year ago, at $374,400. As NAHB has estimated, higher lumber costs alone are increasing new home prices by $36,000 on average.

Higher costs have priced out buyers, particularly at the lower end of the market. A year ago, 44% of new home sales were priced below $300,000. In May 2021, only 26% of new home sales were priced below $300,000.

Looking back to the spring of last year, the April 2020 data (570,000 annualized pace) marks the low point of sales for the 2020 recession. The April 2020 rate was 26% lower than the prior peak, pre-recession rate set in January. Sales then mounted a historic surge from April until July, outpacing gains in actual construction. Sales have been above the pace of the post-Great Recession trend since the second half of last year. However, since January the trend has been declining and has now dipped below the long-run trend (as indicated by the blue dashed line in the graph above).

Sales-adjusted inventory levels remained healthy in May, although they did increase to a 5.1 months’ supply.

Completed ready-to-occupy homes continue to fall as a share of new home inventory. Such homes were just under 24% of inventory a year ago. They are only a little more than 11% of the total in May 2021.

Moreover, to see how sales patterns have changed in a high demand, low supply market — the count of new homes sold that had not started construction is up 76 percent over the last year. The count of new homes sold that are completed and ready to occupy is down 33 percent.

Regionally on a year-to-date basis new home sales rose in all four regions, up 48.7% in the Northeast, 33.5% in the Midwest, 32.3% in the South, and 5.6% in the West. These significant increases are due in part to lower sales volume during the Covid crisis a year ago.

Read more…

Eyeonhousing.org

Existing home sales rise 44% | South Salem Real Estate

Median sales price of all existing homes was $350,300, up 23.6% from a year ago.

As low inventory continues to push home prices higher and squeeze out some buyers, existing home sales dropped to a eleven-month low in May, according to the National Association of Realtors (NAR). The median existing home price in May surged to an all-time high; the largest annual pace on record.

Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, fell 0.9% to a seasonally adjusted annual rate of 5.80 million in May, the lowest level since July 2020. However, on a year-over-year basis, sales were still 44.6% higher than a year ago.

The first-time buyer share remained at 31% in May, even with April but down from 34% a year ago. The May inventory level increased from 1.15 to 1.23 million units but is still down from 1.55 million units a year ago.

At the current sales rate, the May unsold inventory sit at a 2.5-month supply, slightly up from April’s 2.4-month but still down from 4.6-month a year ago. This low level supply of resale homes is good news for home construction.

Homes stayed on the market for an average of just 17 days in May, an all-time low, unchanged from April and down from 26 days a year ago. In May, 89% of homes sold were on the market for less than a month.

The May all-cash sales share was 23% of transactions, down from 25% last month and 17% a year ago.

Tight supply continues to push up home prices. The May median sales price of all existing homes was $350,300, up 23.6% from a year ago, representing the 111st consecutive month of year-over-year increases. The median existing condominium/co-op price of $306,000 in May was up 21.5% from a year ago.

Geographically, three of four regions saw a decline in existing home sales in May, ranging from 0.4% in the South to 4.1% in the West. Sales in the Midwest rose 1.6% in May. On a year-over-year basis, however, sales continued to grow by double-digits in all four regions, ranging from 27.2% in the Midwest to 61.6% in the West.

Meanwhile, the Pending Home Sales Index (PHSI), also reported by the NAR, is a forward-looking indicator based on signed contracts. The PHSI declined 4.4% from 111.1 to 106.2 in April. On a year-over-year basis, sales were 51.7% higher than a year ago.

Though consumers are facing higher home prices and declining housing affordability, housing demand is expected to remain solid due to historically favorable mortgage rates and a promising economic outlook. Meanwhile, rising material prices and supply chain shortage are limiting builders’ abilities to meet the increased level of demand. The imbalance between housing supply and demand could hamper future sales by driving up house prices and eroding affordability.

read more…

eyeonhousing.org