Author Archives: Robert Paul

About Robert Paul

Robert is a realtor in Bedford NY. He has been successfully working with buyers and sellers for years. His local area of expertise includes Bedford, Pound Ridge, Armonk, Lewisboro, Chappaqua and Katonah. When you have a local real estate question please call 914-325-5758.

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.

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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

Mortgage rates average 3.02% | Mt Kisco 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 3.02 percent.

“Mortgage rates have risen above three percent for the first time in ten weeks,” said Sam Khater, Freddie Mac’s Chief Economist. “As the economy progresses and inflation remains elevated, we expect that rates will continue to gradually rise in the second half of the year. For those homeowners who have not yet refinanced – and there remain many borrowers who could benefit from doing so – now is the time.”

News Facts

  • 30-year fixed-rate mortgage averaged 3.02 percent with an average 0.7 point for the week ending June 24, 2021, up from last week when it averaged 2.93 percent. A year ago at this time, the 30-year FRM averaged 3.13 percent.
  • 15-year fixed-rate mortgage averaged 2.34 percent with an average 0.7 point, up from last week when it averaged 2.24 percent. A year ago at this time, the 15-year FRM averaged 2.59 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.53 percent with an average 0.3 point, up slightly from last week when it averaged 2.52 percent. A year ago at this time, the 5-year ARM averaged 3.08 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.

Lumber prices drop 41% from mid May 2021 peak | Katonah Real Estate

After peaking at around $1,700 per thousand board feet in mid-May, lumber prices sank below $1,000 per thousand board feet this week for the first time since late March, according to Random Lengths. Since falling by approximately 23% between September 2020 and November 2020, lumber prices surged into 2021, reaching record levels beginning in March.

Rising prices became a top concern across the construction industry, with numerous industry associations, including the National Association of Home Builders (NAHB) and the National Lumber and Building Material Dealers Association (NLBMDA), pushing government officials to prioritize the issue. The NAHB estimated the significant spike in softwood lumber prices between April 2020 and April 2021 added nearly $36,000 to the price of an average new single-family home and approximately $13,000 to the market value of an average new multifamily home. In addition to the risk the price increases, and related supply-side issues, posed to construction firms, the NAHB estimated the increase in average home prices priced out more than 5.5 million households.

Even as lumber prices soared in May, analysts at BMO Capital Markets projected lumber prices would drop by the second half of the year and return to more typical levels in 2022. The bank cited affordability concerns as the chief reason for expected lumber price reliefs.

“Household wallets are not unlimited and at some point, demand could shrink amid a reluctance to shell out extra dough for the same studs and sheathing,” BMO Capital Markets forecast in May.

Beyond affordability, expanding supply has also contributed to lumber’s recent price decline. U.S. lumber production has increased 5% in the past 12 months, with another 5% increase expected, according to Domain Timber Advisors via Bloomberg.

While prices have begun to decrease, and are trading roughly 40% below their mid-May peak, lumber prices are still up 175% on a year-over-year (YOY) basis, according Business Insider. Analysts project prices will remain “above trend” in the short-term future, despite the recent rapid decline. Speaking with CNBC, Sherwood Lumber COO Kyle Little said while relief is expected over the next six to 12 months, the prices seen will still be “much, much higher than prices we’ve experienced in the recent past.”

While the past week has seen a reprieve on lumber prices, supply-side shortages continue to significantly affect the construction industry. A recent report from the NAHB found the shortage of materials was more widespread than any other period since the association began tracking the issue in the 1990s. The NAHB’s May Housing Market Index (HMI) survey in May 2021 found approximately 90% of builders who buy framing lumber, plywood, and OSB reported shortages. However, shortage issues for builders extend beyond lumber, as sourcing appliances and windows and doors are issues plaguing around 90% of builders, according to the NAHB. A recent survey of the JLC readership also found windows and doors had long wait times, ranging from from about 2-3 weeks to as many as 17 weeks for some readers. Lighting, electrical and plumbing fixtures, cabinets, and appliances were among the other items the JLC readers reported had long lead times.

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jlconline.com/business/

Prices of Residential Construction Inputs Up 23% Year-Over-Year | Bedford Real Estate

Prices paid for goods used in residential construction ex-energy rose 3.6% in May (not seasonally adjusted) and have increased 16.5% over the past 12 months, according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. Building materials (i.e., inputs to residential construction less food and energy) prices have declined just twice since December 2019.

The index for inputs to residential construction, including food and energy, increased more (+4.1%) and is up 22.5%, year-over year.  This increase closely mirrors the 26% increase found in a recent NAHB survey.

Building materials prices have increased 9.4% year-to-date (YTD), in stark contrast to the 0.4% YTD seen in 2020.  However, the 2021 increase YTD is an outlier when compared to pre-pandemic years as well, more than tripling the largest January-to-May increase since 2015 (the most recent data available).

Steel Products

Steel mill products prices climbed 2.4% in May, a substantial slowdown after three months during which increases averaged 15.9%.  Even so, prices are up 75.4% over the past 12 months and have risen 59.4% in 2021 alone.

Softwood Lumber

The PPI for softwood lumber (seasonally adjusted) rose 19.2%–the largest monthly increase since September 2020—and set a record high for the fourth consecutive month. Lumber prices have remained extremely volatile since the 88.5% increase between April and September 2020.

Since falling 22.9% between September and November, the softwood lumber PPI has risen 81.2%. However, recent data from Random Lengths suggests that the index will decline next month as weakening prices in late-May and the first half of June are captured by the BLS survey.

Lumber Futures

Good news has been found in the futures market of late, as July lumber futures have fallen precipitously in recent weeks.  Since May 10, the price of July futures has declined 44.2%.  It is worth noting the features of lumber futures as they explain why changes in the futures market may not be a practical leading indicator of how much builders will pay for framing packages in the months ahead.

First, the specifications of lumber futures contracts state that a futures contract:

  • Is for delivery of roughly 110,000 board feet (all of which is made up 2x4s), assuming the future is held to delivery.
  • Only delivers lumber that is manufactured in California, Idaho, Montana, Nevada, Oregon, Washington, Wyoming, or Alberta or British Columbia, Canada.
  • Is limited to Hem-Fir, Englemann Spruce, Lodgepole Pine, and/or Spruce-Pine-Fir.  Southern Yellow Pine is notably absent.

Second, if hoarding takes place in the middle of the supply chain as wholesalers and/or distributors attempt to protect against upside risk, these supply chain members may sell inventories if futures and/or mill prices fall.  But the current cash or futures price has little effect on prices paid by builders until prices have fallen to a sufficiently low level for long enough to counteract middlemen being “trigger shy” in an environment of falling mill prices.

Exchange Rate Effects

In addition to nominal price movements and tariffs on Canadian lumber, cross-border purchasers are affected by the strength of the U.S. dollar relative to the Canadian dollar.

The USD has depreciated 4.8% YTD and 10.3% over the past 12 months which has raised the price of Canadian imports in real terms above nominal increases due to other market forces.

Gypsum Products

Prices paid for gypsum products increased 3.4% in May, reaching a record high for the second consecutive month. The index has climbed 14.6% over the past year, but the whole of that increase has occurred since October 2020. The index for gypsum building materials (e.g., drywall) has increased 17.9% since last October.

Ready-Mix Concrete

Prices paid for ready-mix concrete (RMC) climbed 0.2% (seasonally adjusted), following a 1.1% increase in April. Price volatility has eased in 2021 as four of the five monthly price changes YTD have been between -0.2% and 0.3%.

Prices increased in the Northeast (+2.3%) and South (+0.2%) regions in May, while prices paid in the Midwest (-1.1) and South (-0.4%) declined.

Other Building Materials

The chart below shows the 12-month and year-to-date price changes of other price indices relevant to the residential construction industry.  As Congress continues to work on an infrastructure package, the Construction Materials index is particularly salient.  This index is much more heavily weighted with products necessary and used in large amounts in the production of “traditional” infrastructure (e.g., roads, bridges, rail).

read more…

eyeonhousing.org/2021/06/

US housing market is short 5.5 million homes, NAR says | Pound Ridge Real Estate

The National Association of Realtors says the current state of the housing market is absolutely “dire,” the consequence of a housing shortage 30 years in the making.

According to the lobbying group, construction of long-term housing fell 5.5 million units short of historical levels over the past 30 years.

The NAR is calling for a “major national commitment” to build more housing of all types by expanding resources, addressing barriers to new development and making new housing construction an integral part of a national infrastructure strategy.

The report, authored for the NAR by the Rosen Consulting Group, highlighted a “chronic shortage of affordable and available homes [needed to support] the nation’s population,” noting the recent lack of new construction and a prolonged underinvestment in those affordable units as the main culprits.

From 1968 to 2000, the total stock of U.S. housing grew at an average annual rate of 1.7%. In the past 20 years, the U.S. housing stock grew by an annual average rate of 1% — and only 0.7% in the last decade.

In fact, coming off the Great Recession, new home construction in the U.S. between 2010 and 2020 fell 6.8 million units short of what was needed, the report said.

Residential fixed investment (RFI) — the sector of economic activity that accounts for housing construction and renovation — accounted for approximately 5% of the country’s total gross domestic product between 1968 and 2000. In the past 12 years, though, RFI accounted for only 3% of the country’s gross domestic product. This shortfall in RFI, the NAR reported, translated to a $4.4 trillion gap in housing market investment from 2000 to 2020.

Existing-home inventory at the end of April totaled just 1.16 million units, down 20.5% from the prior year.

In looking at underbuilt, major U.S. metros, the New York-Newark-Jersey City metro had an underbuilding gap of 148,650 units in the past nine years — the largest gap in the country, the study claimed. That’s followed only by the San Francisco-Oakland-Hayward metro, which reported a gap of 113,200 units; and the Riverside-San Bernardino-Ontario, California metro, which reported a gap of 107,700 units.

“There is a strong desire for homeownership across this country, but the lack of supply is preventing too many Americans from achieving that dream,” said Lawrence Yun, NAR chief economist. “It’s clear from the findings of this report and from the conditions we’ve observed in the market over the past few years that we’ll need to do something dramatic to close this gap.”

Specifically, NAR President Charlie Oppler said adequate increases in housing construction this decade would add an estimated 2.8 million American jobs and $50 billion in nationwide tax revenue.

“A number of factors from the past 20 years are responsible for the massive housing investment gap we see in America today, but what’s important now is that we find solutions that will get us out of this crisis and provide more stability in future markets,” Oppler said. “Additional public funding and policy incentives for construction will very clearly provide huge benefits to our nation’s economy, and our work to close this gap will be particularly impactful for lower-income households, households of color and millennials.”

In order to fill the underbuilding gap in the next 10 years, the NAR estimated that more than 2 million housing units would need to be built per year – an increase of more than 700,000 units per year relative to the pace of housing production in 2020.

Several potential policy changes were offered up by NAR in the report, including addressing the large shortages of capital for the development of affordable housing by expanding resources and maximizing the potential of existing programs, incentivizing shifts in local zoning and regulatory environments to increase the quantity of developable residential space, and increasing housing supply by promoting conversions of underutilized commercial space.

Oppler added that addressing the national underbuilding gap in the housing market will require a “coordinated approach” to the planning, funding and development of infrastructure.

As part of a $1 trillion national infrastructure plan, President Biden has earmarked $318 billion toward the construction and preservation of affordable housing.

read more…

housingwire.com/articles/

Mortgage rates average 2.93% | Bedford Hills Real Estate

Freddie Mac  today released the results of its Primary Mortgage Market Survey (PMMS), showing that the 30-year fixed-rate mortgage (FRM) averaged 2.93 percent.

“Mortgage rates continue to drift down as markets concur with the view that inflation increases are temporary,” said Sam Khater, Freddie Mac’s Chief Economist. “While mortgage rates are low, purchase demand has weakened over the last couple of months, primarily due to affordability constraints stemming from high home prices. With inventory tight, the slowdown in demand has yet to impact prices, meaning the summer will likely remain a strong seller’s market.”

News Facts

  • 30-year fixed-rate mortgage averaged 2.93 percent with an average 0.7 point for the week ending June 17, 2021, down from last week when it averaged 2.96 percent. A year ago at this time, the 30-year FRM averaged 3.13 percent.
  • 15-year fixed-rate mortgage averaged 2.24 percent with an average 0.6 point, up slightly from last week when it averaged 2.23 percent. A year ago at this time, the 15-year FRM averaged 2.58 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.52 percent with an average 0.3 point, down from last week when it averaged 2.55 percent. A year ago at this time, the 5-year ARM averaged 3.09 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.