Existing-Home Sales Bloom After Rainy April

Existing-Home Sales Bloom After Rainy April

Existing-home sales bloomed in May after a rainy April, with the median days on market at a new low and the median sales price at a new high, the National Association of REALTORS(R) (NAR) reports.

Existing-home sales totaled 5.62 million, a 1.1 percent increase from April and a 2.7 percent increase from one year prior. Inventory increased 2.1 percent to 1.96 million-though still 8.4 percent below one year prior.

"The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level," says Lawrence Yun, chief economist at NAR.

"Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher."

Inventory is currently at a 4.2-month supply. Existing homes averaged 27 days on market in May, two fewer days than in April and five fewer days than one year prior. Non-distressed homes took 27 days to sell. All told, 55 percent of homes sold in May were on the market for less than one month.

"The bottom line is that there are fewer homes on the market, and they are selling faster," says Joseph Kirchner, senior economist at realtor.com(R). "Tightening supplies have caused steady price growth in the existing-home market; sales are up 2.7 percent since May 2016. In fact, the supply of homes on the market fell from 4.7 months worth last May to 4.2 months last month.

"With new and existing supply failing to catch up with demand, several markets this summer will continue to see homes going under contract at this remarkably fast pace of under a month," Yun says.

"This is a strong market for sellers, which is good news for people who are downsizing or settling an estate," Kirchner says. "It’s bad news for millennials, first-time buyers or second-time buyers looking to upsize for that baby on the way."

The metropolitan areas with the fewest days on market in May, according to data from realtor.com, were Seattle-Tacoma Bellevue, Wash. (20 days); San Francisco-Oakland-Hayward, Calif. (24 days); San Jose-Sunnyvale-Santa Clara, Calif. (25 days); and Salt Lake City, Utah, and Ogden-Clearfield, Utah (both at 26 days).

The median existing-home price for all types of houses (single-family, condo, co-op and townhome), at the same time, was $252,800-a 5.8 percent increase from one year prior. The median price for a single-family existing home was $254,600, while the median price for an existing condo was $238,700.

"Home prices keep chugging along at a pace that is not sustainable in the long run," says Yun. "Current demand levels indicate sales should be stronger, but its clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions."

Single-family existing-home sales came in at 4.98 million in May, a 1 percent increase from 4.93 million in April and a 2.7 percent increase from 4.85 million one year prior. Existing condo and co-op sales came in at 640,000, a 1.6 percent increase from April and a 3.2 percent increase from one year prior.

Twenty-two percent of existing-home sales in May were all-cash, with 16 percent by individual investors. Five percent were distressed.

Existing-home sales in the Northeast rose 6.8 percent to 780,000, with a median price of $281,300. Existing-home sales in the West rose, as well, 3.4 percent to 1.22 million, with a median price of $368,800. Existing-home sales in the South also rose, 2.2 percent to 2.34 million, with a median price of $221,900. Existing-home sales in the
Midwest fell 5.9 percent to 1.28 million, with a median price of $203,900.

For more information, please visit www.nar.realtor.




CashBuyersLists.com                                                                                           Please like, comment and share

Don’t put your money in a house, says a new report

               

(CNBC) - Rising home prices and potentially increasing mortgage rates could hamper investments.

Renting may be a better option than buying, according to the report.

If you're planning on house hunting this weekend, you might want to do a little math first.

Owning a home used to be a great way to build wealth, but that equation is turning. It may, in fact, be more lucrative to invest your money elsewhere.

As home prices rise quickly and mortgage rates threaten to increase, the rent versus buy equation is tipping toward rent, according to an index from Florida Atlantic University. It factors in home prices, rents, mortgage rates and alternative investments that create wealth. 

Essentially, it calculates the wealth accumulated when owning a home compared with the wealth accumulated when renting the same property and investing the down payment somewhere else.

"The major drivers for this quarter's scores appear to be slowing rents relative to the costs of ownership and climbing mortgage rates," said Ken Johnson, a real estate economist and one of the index's creators at FAU's College of Business.

"Thus, on the margin, more potential owners should favor renting and reinvesting in a portfolio of stocks and bonds as opposed to ownership. This shift should slightly lower the demand for ownership and contribute to the slowdown in housing prices around the country."

Of the 23 cities the index measures, 11, including New York City and Boston, are still in 'buy' territory — some very definitively, like Chicago, Cincinnati and Cleveland. Nine, including Minneapolis, Atlanta, Miami, Philadelphia and Los Angeles, hover right around zero, meaning it is a toss-up between buy and rent. Three cities, Dallas, Denver and Houston, are in historically high territory for renting being the better option for building wealth.

Despite different levels currently, all of the cities are steadily moving toward rent in the FAU index, because home prices have risen so steeply in the past few years and continue to gain. Mortgage rates bumped higher after the presidential election in November, and although they have fallen since, they are expected to rise through the end of 2017.

This may be why another index, measuring homebuyer sentiment, is dropping. The monthly Fannie Mae survey found those who said now is a good time to buy a home fell to its lowest level ever. In addition, fewer respondents said they were confident about holding on to their jobs.

"High home prices have led many consumers to give us the first clear indication we've seen in the National Housing Survey's seven-year history that they think it's now a seller's market," said Doug Duncan, senior vice president and chief economist at Fannie Mae.

"However, we continue to see a lack of housing supply as many potential sellers are unwilling or unable to put their homes on the market, perhaps due in part to concerns over finding an affordable replacement home. Prospective homebuyers are likely to face continued home price increases as long as housing supply remains tight."

Clearly affordability is weighing on the housing market, especially as more and more younger buyers enter it for the first time.

CashBuyersLists.com                                                          Please like, comment and share