Though June marked the official start of summer, Tulsa-area home sales cooled somewhat.
Though June marked the official start of summer, Tulsa-area home sales cooled somewhat.
Approximately 1,316 homes sold last month, according to the Greater Tulsa Association of Realtors. That’s a 0.6 percent drop from May and a 3 percent drop from the previous June.
Approximately 1,316 homes sold last month, according to the Greater Tulsa Association of Realtors. That’s a 0.6 percent drop from May and a 3 percent drop from the previous June.
Even with the decline, June’s home sales were the second-highest recorded in the area for nearly a decade.
The six-month total of 6,580 is still 2.2 percent ahead of the year before and the highest first-half total in the last eight years for which data is readily available.
The nation as a whole fared much better than Tulsa — single-family home sales increased 2.8 percent to a seasonally adjusted annual rate of 4.84 million in June from 4.71 million in May, and are now 9.8 percent above the 4.41 million pace a year ago, the National Association of Realtors reported.
Pete Galbraith, president of Coldwell Banker Select, said part of the problem could have been the weather.
“June was a very rainy month, and weather can be a hindrance to people’s desires to get out and look at homes,” he said.
Galbraith and Paul Wheeler, owner of Accent Realtors, both said most usual indicators such as the economy, employment, buyer confidence and interest rates remain favorable.
Wheeler said a big obstacle to selling homes is not having enough homes to sell.
“Activity’s good, but not as many people are putting their homes on the market,” Wheeler said.
The inventory of homes in June reached an estimated 5.4 month’s supply, or 6,119. That figure is the lowest recorded by GTAR in recent years.
On top of that, new listings that have entered the market hit 2,153, again the lowest recorded in nearly a decade.
Galbraith said local realtors need more new homes built, but there’s not enough of them — home construction in June was at the second-lowest level for the year, and the year-to-date total is down 6.7 percent from the first half of last year.
“It’s very important for us to have new construction,” he said. It has a stabilizing effect on prices.”
The current average sales price of a home in Tulsa stands at $196,558, up 9.8 percent from a year ago.
By comparison, the national median sales price reached $226,500 in June, up 5.5 percent from the same time last year.
Pending listings, which include homes that have entered into contract but have not yet sold, reached 1,433 in June, which was the best for pending listings in the last eight years measured. Pending listings can often indicate the next month’s sales performance.
Galbraith said the rest of the year might see more modest growth compared to 2013 and 2014, though he’s assuming interest rates finally start to increase.
“Interest rates may creep up, but I’ve been saying that for three years. They just haven’t, and they’re not now due to what’s happening in Greece.”
The Lakeland Association of Realtors was awarded a $2,000 placemaking micro grant to aid in the construction of the Global War on Terrorism Freedom Memorial, to be built in Veterans Park.
According to the NAR website, placemaking grants are intended to “help plan, organize, implement and maintain projects to improve a neighborhood with small, inexpensive, incremental projects which will help to make the neighborhood a better place to live, work and play.”
“Placemaking” is a term that has been around for about 20 years and a concept that has been around since the 1960s, according to the Project for Public Spaces. It refers to the planning, design and management of public spaces to create a shared area to promote community activity and integration.
The Lakeland association has been working with the Polk County Veterans Council and organizers of the annual Warrior Walk event to bring the memorial to life in the park located behind The Lakeland Center.
“Placemaking can help foster healthier, more social and economically viable communities,” said Debbie Miller, president of the Lakeland association in a news release. “It creates places where people feel a strong stake in their neighborhoods and are committed to making things better.”
The planned memorial is a tribute to soldiers who fought or lost their lives fighting in Iraq and Afghanistan, said Melissa Sanchez, founder of Warrior Walk and communications coordinator for the Lakeland Realtors’ association. Veterans Park already features memorials for World War II, the Korean War, Vietnam, Fire and EMS workers, and law enforcement personnel, among others. But it has no memorial for the conflicts in Iraq and Afghanistan.
“The younger generation, the guys in the most current conflict, deserve some recognition as well,” Sanchez said. “It’s a platform for them. We have to make sure that their voices are heard too. The younger guys, we have a lot of them here. They need our support.”
The memorial is set to feature a base in the shape of the Pentagon, a sculpture of the outline of the Twin Towers at the far point of the Pentagon framing a bronze Soldier’s Cross (a symbolic replacement of a cross for a soldier who has been killed featuring a rifle stuck into the ground between a soldier’s boots, topped with a helmet) at the center.
There will also be a grassy area representing the Shanksville, Pa., field where United Flight 93 crashed on Sept. 11, 2001, in the background.
The memorial has been a dream of Sanchez’s since she founded the Warrior Walk six years ago. She said she knew she wanted to help build a memorial incorporating a Soldier’s Cross. Over the past few years, she said, input from the Veterans Council helped bring more ideas together.
Sanchez said the memorial is designed to represent the terrorist attacks of Sept. 11. 2001, which influenced U.S. involvement in Operation Enduring Freedom in Afghanistan and Operation Iraqi Freedom in Iraq, which ushered in the modern war on terrorism, and the soldiers who have fought in those conflicts.
The memorial was designed by Furr Wegman Architects of Lakeland. Sanchez said it is expected to cost between $30,000 and $35,000 to complete the memorial.
HALF-WAY TO GOAL
She said fundraising efforts have brought collaborators about half-way to the goal. She has been saving for the memorial since starting the Warrior Walk, but fundraising efforts really began this year, said Sanchez.
She hopes to see the memorial complete and unveiled by Veterans Day.
“It’s going to take a lot of hard work,” said Sanchez. “But I think we’ll make it.”
[ Daniel Figueroa IV can be reached at email@example.com or 863-802-7584. Follow @danuscripts on Twitter. ]
Sue Shoha is moving up, Abby Leet and Will Hubbard are moving in and home sales in Metro Detroit are taking off.
For the second month in row, the National Association of Realtors are citing Metro Detroit and Ann Arbor as two of the 10 hottest real estate markets in the country. In May, Metro Detroit ranked 10th while Ann Arbor was ninth, and in June both moved up a notch.
Real estate brokers say sales have been heating up since last year, as the economy and consumer confidence improved and home prices steadily increased as foreclosures dwindled. Would-be homebuyers who’ve been sitting out the aftermath of the great recession, and its wobbly recovery, have finally decided it’s safe to buy, and home values are up to the point that homeowners can sell for more than they owe.
“The market has been extremely active for the first half of the year and sales are up because our inventory is so low,” says Jan Hays, an Oakland County real estate agent with Max Broock Realtors of Birmingham. “The last seven houses I’ve sold in Sylvan Lake sold in less than five days. One sold in 24 hours to the first person who walked in the door.”
On Friday, Hays was showing a Sylvan Lake waterfront home to Sue Shoha, a 52-year-old dentist who just opened a new practice in Bloomfield Hills and is looking to move up with her husband and three children. “This is our ‘up north’ cottage without the drive,” Shoha joked.
Later that afternoon in Berkley, Will Hubbard, 27, and his fiancee, Abby Leet, 25, finished the final walk-through and closed on their first home, after having viewed more than 50 properties since March.
“Since everybody in our age range wants to rent we felt it was a pretty decent time to be buying,” says Hubbard, who works in finance. “It was tough. We lost an offer to an all-cash buyer, and one to someone who bid the same price but with an FHA mortgage.”
But while sales are up, the number of new homes being listed is barely budging, creating a big jump in prices. Real estate agents says it’s common now to see multiple offers on properties, often going over the asking price.
In June, sales in Metro Detroit increased 13.3 percent, while the median sale prices increased 9.3 percent, according to Realcomp II Ltd., the multiple-listing service covering Southeastern Michigan. For the entire listing area, covering Wayne Oakland, Macomb, St. Clair, Livingston and Lapeer counties, sales were up 14.1 percent, but the number of listings in the region grew by less than 2 percent. That combined to push the median sale price up by 10.3 percent — a 10-year high.
In Detroit proper (including Highland Park, Hamtramck and Harper Woods), sales fell 8.2 percent, but prices were still up, gaining 31.8 percent.
In Ann Arbor, single-family homes listed for sale were up less than 1 percent, compared with June 2014, while sales were up 28.3 percent. The median sales price, however, dipped 3.7 percent, but is up 5.5 percent this year. The median price on condominiums was up 13.8 percent for the month.
Ann Arbor prices are back above the peak levels set in 2005 during the housing bubble, sales agents say. For southeast Michigan, the Realcomp median sales price in June of $160,000 is almost back to the record high, which was slightly less than $165,000.
“It’s very hot. It’s definitely a sellers’ market right now,” said Craig Joeright, an agent with Howard Hanna Realty Services in Birmingham. “If it goes on the market and it’s something that’s move-in ready, you’re getting multiple offers over the asking price. In the last two months I closed about 20 homes. June and July have been crazy.”
The Michigan numbers mirror national statistics. Wednesday, the National Association of Realtors announced that existing-home sales in the U.S.hit an eight-year high during June, at a seasonally adjusted annual rate of 4.84 million, while the median sales price hit a new record of $237,700.
“I put a house on the market Tuesday, and by Wednesday I had three offers all over the list price of $225,000,” says Tracey Roy, president of the Ann Arbor Area Board of Realtors, and an agent at Charles Reinhart Realtors. “There’s not enough inventory for the amount of buyers, especially priced at $300,000 and under.”
Nonetheless, buyers from higher-priced markets aren’t balking at prices in Ann Arbor.
“I just had someone in from an area where homes are really expensive, and they’re mesmerized by what they can get for the dollar,” Roy says.
Some buyers in Ann Arbor are young people getting jobs and buying a first home, as well as transfers to the University of Michigan or the medical or tech companies headquartered in the area, notes Matt Miller, an agent also with Charles Reinhart Realtors and president-elect of the Board of Realtors. He adds that older baby boomers looking to downsize are also looking to sell, but running into roadblocks when looking for condos or smaller ranch homes.
“I’ve seen a little bit of a clog in the market from baby boomers nearing or at retirement who are looking to downsize, without a whole lot of options available,” Miller said. “It’s keeping those people from putting their homes on the market and creates some of this cycle of low inventory.”
In Metro Detroit, homeowners buying because they’ve been transferred to work in the market are also boosting demand, says Patrick Carolan, an agent with Coldwell Banker Weir Manuel in Birmingham.
“We’re still seeing a lot of transferring from larger global companies, and companies transferring people from state to state,” Carolan said. “Recently we had Campbell Soup take over Market Fresh in Ferndale and that’s brought in some transferees in the corporate arena, along with transfers from GM, Chrysler and Ford, as well.”
Another factor driving sales, real estate agents say, are people who lost homes in foreclosure and have rebuilt their credit. Also motivating first-time buyers and homeowners looking to move up are rising mortgage rates. According to mortgage insurer Freddie Mac, the average June interest rate on a 30-year, fixed-rate mortgage was 3.98 percent, after dropping as low as 3.35 during 2012.
Says Jan Hays of Broock Realtors: “Were finding that a lot of people who can make the move up are doing so now because interest rates are still favorable.
The latest monthly market survey by the Realtors found that the number of Broward sales was 21 percent higher than in June 2014, and the number rose 16 percent in Palm Beach.
The June survey also showed that the median sale price of a single-family home was $302,750 in Broward County, up 8 percent from a year earlier and the highest since 2008. The median price of $305,000 in Palm Beach County was up 3 percent in June, year over year.
The Realtors survey also showed year-over-year growth in the number of June sales of condos, which increased 5 percent in Broward and surged 22 percent in Palm Beach. The median condo sale price in June rose to $135,000 in Broward, up 4 percent from June 2014, and $149,450 in Palm Beach County, up 8 percent.
A seasonal summer sales increase, greater consumer confidence and easier access to mortgage financing were key factors in the June survey results, the Realtor groups said.
Real estate agent Michael Citron, who focuses on Broward and Palm Beach County, said the majority of his clients seek homes in the $200,000 to $400,000 price range. “Homes in good-school-district areas are flying like the wind,” he said.
The National Association of Realtors reported that home sales nationwide in June increased at the fastest pace in eight years.
The association’s chief economist Lawence Yun said in a prepared statement that a stronger economy is boosting the housing market: “This wave of demand is being fueled by a year-plus of steady job growht and an improving economy that’s giving more households the financial wherewithal and incentive to buy.”
Yun said that mortgage rates have held in the 4 percent range, and that a slight rise in rates in early spring probably encouraged more buyers to make home purchases before a long-term increase in rates. [Sun-Sentinel] – Mike Seemuth
They make up the fastest growing segment of the U.S. population yet Hispanics are increasingly locked out of home ownership because of tighter lending standards that rely on outdated measures of creditworthiness.
Comprising more than 17 percent of the population right now and projected to double, Hispanics are a political and economic force to be reckoned with. And they potentially represent an answer to turning around a sagging national home ownership rate that’s approaching levels not seen since before the fall of the Berlin Wall.
The national rate of home ownership fell to 63.8 percent over the first three months of 2015. The last time it was lower was the final quarter of 1989 when it stood at 63.7 percent.
The problem for Hispanics, who in 2014 had an ownership rate of 45.4 percent, a 14-year low, is that conventional tools for gauging creditworthiness are locking them out in large numbers.
“Communities of color under the current scoring model aren’t being accurately captured,” said Joe Nery, president-elect of the National Association of Hispanic Real Estate Professionals. “You don’t have the opportunity to establish your credit.”
Hispanics are more likely to pay in cash, and have extended families under a single roof with a higher tendency to pool resources. Yet that counts for little in the traditional scores used by credit-reporting agencies and banks to determine whether an applicant qualifies for a mortgage or car loan.
“The current (credit) models established in the 1980s and early ’90s really don’t account for those methods of payment,” said Nery, a Realtor in Chicago. “Unfortunately that limits the access to loan products, especially for those of minority descent.”
In fact, the Consumer Financial Protection Bureau issued a report in early May noting that 26 million Americans are “credit invisible,” meaning they have no credit history on file with any of the major credit-reporting companies such as Experian, Equifax and Transunion. About 15 percent of African-American and Hispanic consumers are among those 26 million, the report said.
Currently, credit reporting is dominated by FICO scores. They date back to 1956, when software developers Bill Fair and Earl Isaac created a program to gauge the risk of a consumer credit default. Lenders now purchase more than 10 billion FICO credit scores annually for use in making loan decisions. Consumers are granted free access to their FICO score.
FICO’s current methodology dates back to around 2004, and relies on a borrower’s income, payment history, debt load and to a lesser degree how often lenders take a look at a borrower’s credit history.
Here’s the rub for Hispanic borrowers: When looking at payment history, the FICO scoring relies on whether payments have been timely on credit card bills, mortgages, car loans and the like. There’s greater weight given to lengthy repayment of credit.
“For most first-time homebuyers … their largest monthly expense is their rent payment,” said Joe Castillo, the managing broker at ERA Mi Casa Real Estate in Chicago. “And at the current time the credit agencies do not provide landlords larger or even small avenues to report that payment. So that is a huge misstep, or missed opportunity.”
That’s the problem Maria Flores faces in the Hispanic suburbs of Chicago. She sold her home at a loss several years ago amid the Great Recession, and is trying to buy again but her on-time rental payments aren’t factored into her ability to pay. It’s ironic because her monthly mortgage payment had been $2,000 a month. Her rising rental payments now are $1,800, which she routinely pays on time.
“For a bank, we are too low-income,” said Flores, whose truck-driving husband is an owner-operator who earns more than $100,000 before expenses. “Before, it was fine. It was the same as we earn now!”
Post-crisis lending standards are decidedly tougher, and that hits all borrowers. But for Hispanics there’s also the real issue of what is being measured. Cell phone payments are also not counted in conventional payment history. That would have helped Flores, who said she had no credit problems until the Great Recession.
“Post-downturn, the Latino market has been unevenly excluded from being able to buy. Folks who definitely have the ability to buy, they have the household income,” said Leo Pareja, a Realtor for Keller Williams in Falls Church, Va., where there are many immigrant buyers from Central America. “They’ve been operating in a non-credit environment. They’ve been paying rent on time, cell phone bills on time.”
If there were alternate measures of creditworthiness, many of these Latino consumers would join the ranks of homeowners, he said.
Communities of color under the current scoring model aren’t being accurately captured. Joe Nery, president-elect of the National Association of Hispanic Real Estate Professionals.
Since 2007, the three major credit-reporting companies have supported an alternative to FICO called VantageScore. It factors in a wider array of bill-payment history and looks at credit use over shorter periods, which picks up infrequent users, creating its own credit scoring system.
VantageScore executives estimate that there are 30-35 million consumers considered “unscoreable” under FICO models, and that about 7.6 million of them could be scored and potentially qualify for a mortgage. Many are Hispanics.
Around for more than seven years, VantageScore has received scant use by mortgage lenders.
“Virtually zero,” confirmed Barrett Burns, president and CEO of VantageScore Solutions, noting Fannie Mae and Freddie Mac mandate that lenders use the 2004 FICO scoring if the lender is going to sell the mortgage to these government-controlled entities. “Those models were built on pre-recession data from 1995 to 2000. Those models are outdated.”
Most mortgage loans from banks are resold to Fannie and Freddie, so lenders are boxed in by the requirements.
That may be changing. The Federal Housing Finance Agency, which regulates Fannie and Freddie, has listed as a 2015 priority testing alternate credit scores and credit histories in loan-decision models employed by the two mortgage-finance titans.
Speaking to the National Association of Realtors earlier in April, Housing and Urban Development Secretary Julian Castro said the Federal Housing Administration too is exploring alternative scoring models for FHA loans.
There’s more at stake than just access to credit, said Kenneth Fears, director of regional economics and housing finance for the National Association of Realtors.
“Twenty or thirty years from now the demographic makeup of the United States is going to be very, very different,” he said. “What’s under the hood, the make-up, will be very different and we need to create an environment that is more conducive to upward mobility.”
Access to credit brings upward mobility, but many first and second generation Hispanics are credit-averse. They often come from countries where the less affluent borrow and lend outside the banking system. It’s why Alicia Trevino supports broader financial literacy efforts to educate about the importance of credit and a credit history.
“We haven’t had the long line of ancestry of how to do it in America,” said Trevino, a nationally recognized Realtor in Mesquite, Texas. “Our main focus is not just home ownership.”
Lending issues plague Charlotte’s Hispanic community
Latinos in Charlotte say tighter lending standards pose barriers to home ownership for the city’s Hispanic population.
Getting paid in cash for low-end jobs is one of the biggest hurdles Latinos must overcome, said Harold Rice Junior, chief program officer of Community Link.
German De Castro, who owns a textile business, said some banks set credit requirements in a way that few minorities can meet.
“Banks want a (very high) 850-credit score and they also want someone who is making a lot of money, and these (Hispanics), most of them, are working two or three part-time jobs,” he said.
Astrid Chirinos, chief development executive of the Latin American Economic Development Corporation is working to alleviate the situation. She says many Hispanics lost homes during the recession.
“A lot of the individuals who had homes, many of them were part of the working class, but now they’ve become part of the working poor,” she said.
“So we’re working with a program called Prosperity Builder that is focused on helping these individuals…understand better how they can purchase a home and build their credit.” Sarah Chaney
As the chief advocate organization supporting the real estate industry, the National Association of REALTORS® (NAR) serves as a vital partner with all brokers. NAR advocates on behalf of the industry, works to help brokers be successful and supports your efforts through a variety of venues and vehicles.
NAR hosts a number of broker-specific meetings and programming throughout the year, providing a forum for networking, dialogue and insight for brokers.
REALTOR® Broker Summit
In 2014, the sold-out Broker Summit, held in Atlanta, was such a hit with attendees that the program was promptly expanded to host three summits in 2015, attendance capacity has been increased at each, and one summit is dedicated entirely to technology. The Broker Summits bring together broker/owners and industry leaders from across the nation to share perspectives on current conditions and pathways to future success. Leadership panels and presentations cover topics such as agent acquisition and retention, growth strategies, risk management, and legislative and legal updates. Click here for dates and more information.
Idea Exchange Council for Brokers
Held twice annually in conjunction with the REALTORS® Legislative Meetings Trade Expo in May and the REALTORS® Conference Expo in November, the Idea Exchange Council for Brokers provides a national forum that encourages the open and honest exchange of ideas among brokers in a non-competitive setting. This popular think tank is a great venue for exchanging challenges, ideas and solutions with fellow brokers representing all company sizes and geographic locations.
Publications Information Resources
Even if you can’t personally attend one of NAR’s events specifically for brokers, there are many other ways to tap into helpful broker-oriented resources, including:
Real Estate Services Update—NAR’s Real Estate Services Program, formed in 2007, identifies the services, tools and strategic relationships that expand and enhance the business interests of NAR’s large broker community. The Real Estate Services (RES) Update, NAR’s monthly newsletter, keeps diversified real estate firms, brokers and their agents informed about issues impacting their businesses. This e-newsletter includes legislative and regulatory updates, news on industry trends, and the latest information on NAR activities as they affect diversified real estate firms.
Business Tips Trends—Published monthly, this e-newsletter features practical, how-to business content from REALTOR® Magazine. REALTORS® who are listed as the “Designated REALTOR®” in the National REALTORS® Database System (or NRDS) receive a special version of this e-newsletter with broker-centric content. (Call NAR’s Information Central at 1-800-874-6500 to see if you are the Designated REALTOR®.)
REALTORS® can subscribe, free of charge, to both newsletters. Go to REALTOR.org and select “Subscribe to e-Newsletters” under the “News, Blogs Videos” tab.
Broker to Broker—REALTOR® Magazine’s Broker to Broker initiative—also called “BtoB” provides resources and articles for a broker audience. You’ll find news for your sales meetings, profiles of successful brokers, and business-management solutions at http://realtormag.realtor.org/for-brokers/network.
Broker Involvement Program
Join over 17,000 broker/owners and over 450,000 agents in bringing a strong and united REALTOR® voice to members of Congress. The Broker Involvement Program provides broker/owners with a quick and effective tool to rally agents on critical legislative issues affecting the industry. To join, go to www.RealtorActionCenter.com and click the top “For REALTORS®” tab.
Through these initiatives and others, NAR strives to hear your voice and support your continued success.
For more information, visit www.realtor.org.
Buy That House Before It’s Gone?
This year’s housing market is shaping up to be the strongest in nearly a decade.
According to the National Association of REALTORS®, 5.49 million homes sold in June 2015 on a seasonally-adjusted, annualized basis, which is the highest since 2007.
Current mortgage rates, which have been low since October of last year are helping to boost home sales nationwide.
The typical prime mortgage borrower now gets access to rates near four percent. Even lower rates are available to borrowers using FHA and VA financing, which allow 3.5% downpayment and 100% financing, respectively.
This year’s improving economy has re-opened the market for low- and no-downpayment mortgage programs, widening the pool of buyers. Credit scores minimums have dropped and Ellie Mae reports loan approval rates at their highest clip since such data has been tracked.
Homes are selling faster, as a result.
Median Days on Market for U.S. homes fell all the way to 34 days in June, which isthe quickest pace of sales since NAR began tracking such data in 2011.
Today’s mortgage market is favorable and it’s a terrific time to buy a home — if you can find one before it sells.
Existing Home Sales: 5.49 Million Homes Sold Annually
Each month, the National Association of REALTORS® publishes its Existing Home Sales report, a tally of sold homes which have been previously-occupied or are otherwise not “new construction”
The trade group’s June 2015 report shows 5.49 million homes sold on a seasonally-adjusted annualized basis, a 10% jump from one year ago and the ninth straight month of year-over-year increases.
Also, there are now just 2.3 million homes for sale nationwide, a figure which puts into numbers what today’s active buyers have already known for months — the market for right-priced homes is highly competitive.
In June, Median Days on Market for an MLS-listed home was 34 days. This means that half of all homes sold were listed for thirty-four days or fewer. 47% of homes were sold within 30 days.
However, the shocking statistic for many of today’s home buyers is that, of all the homes sold, many changed hands before getting list at all – a sale-type known within real estate circles as “pocket listings”.
There are two main reasons why today’s homes may be selling more quickly. One is seasonal.
More homes tend to be sold between March and September as compared to other months, and, after a particular frigid winter, pent-up demand may be spilling over into summer.
Median Days on Market showed a similar drop last June; and the June before that.
Another reason why homes may be selling more quickly is because today’s mortgage rates, while low, began rising this past June. Rising mortgage rates will often boost home sales temporarily as buyers rush to keep costs low.
Today’s home buyers are benefitting from a 6% in purchasing power from the start of last year. If you could afford a home for $300,000 in 2014, you can purchase a home for $318,000 today with the same monthly payment.
47% Of Homes Sold Within A Month
The June Existing Home Sales report showed homes selling more quickly as compared to earlier in the year. In January, the typical home for sale went to contract within 69 days of listing on the MLS.
Today, homes sell in 34 days — less than half the time.
Median Days On Market is not a perfect housing market metric, but it can highlight the relative ease with which a seller can sell a home as well as the relative difficulty a buyer may face in purchasing one.
When the economy is performing well, consumers are more likely to take risks, which including moving to buy a home. This can affect the Days on Market metric.
So can rising rents during a period of low mortgage rates. During times like this, the answer to ”Should I buy or should I rent” changes with the market.
However, a third, less obvious reason why Days on Market may drop is that home sellers may be feeling less confident in their ability to find a buyer.
According to a Fannie Mae consumer attitudes survey, 52% of consumers think now “is a good time to sell” a home — the highest recorded measure since Fannie Mae began tracking such data.
When sellers start believing that “it’s a good time to sell”, it’s because they believe housing is reaching a peak, or falling from one.
Falling confidence suggests that sellers are concerned about their future ability to get top-dollar which can result in home getting listed for cheaper prices. Homes are inclined to sell more quickly when sellers get nervous; and, may go under contract at the “the first reasonable offer”.
The Existing Home Sales report suggests that sellers may be misguided, though — the market is quite strong.
There is just a 5.0-month housing supply and home supply of less than six month is said to favor sellers over buyers in negotiations, and home supply has been less than six months going on three years now.
Today’s housing market favors sellers, but the sellers aren’t necessarily behaving that way .
Want To See Today’s Live Mortgage Rates?
With mortgage rates low, home sales are soaring and competition for homes remains fierce. The best deals you find in housing may be the ones you get today.
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The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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Sales of previously owned U.S. homes climbed to an eight-year high in June as momentum in the residential real estate market accelerated.
Closings on existing homes, which usually occur a month or two after a contract is signed, climbed 3.2 percent to a 5.49 million annualized rate, the most since February 2007, the National Association of Realtors said Wednesday. Prices rose to a record amid tight supply.
The housing market has picked up in recent months as more jobs, historically low mortgage rates and greater household formation boost demand. Faster wage growth will be needed to help housing continue its recovery and become a bigger contributor to growth this year.
“The housing market is on fire,” said Thomas Costerg, a senior economist at Standard Chartered Bank in New York, who projected sales would rise to a 5.48 million pace. “The strength in housing could offset some of the weakness we are seeing elsewhere.”
Stocks trimmed earlier losses after the report. The Standard Poor’s 500 Index declined 0.1 percent to 2,117.69 at 10:18 a.m. in New York, led by a slump in technology shares on disappointing results from Apple Inc., Microsoft Corp. and Yahoo! Inc. The SP Supercomposite Homebuilding Sub Index rose 2.3 percent.
The median forecast for the pace of existing-home sales in the Bloomberg survey of 76 economists projected a gain to a 5.4 million pace in June. Estimates ranged from 5.2 million to 5.52 million. The Realtors’ group revised May’s rate to 5.32 million from a previously reported 5.35 million.
Compared with a year earlier, purchases increased 9.6 percent in June on an adjusted basis.
The median price of an existing home rose 6.5 percent from June 2014 to $236,400, the highest on record before adjusting for inflation.
The number of existing properties on the market rose to 2.3 million in June compared with 2.28 million at the end of May. At the current pace, it would take 5 months to sell those houses compared with 5.1 months at the end of May.
The median time a home was on the market was 34 days, the fewest in records going back four years.
“The market is tighter compared to last year,” Lawrence Yun, NAR chief economist, said in a news conference Wednesday as the figures were released. “Home values are rising too fast and we need more supply to bring the price growth down, consistent with income growth.”
Forecast for 2015
The real-estate agents’ groups projects sales will total 5.26 million this year, the most since 2007.
Purchases of existing homes increased in all four regions, led by a 4.7 percent gain in the Midwest.
Investors are leaving the market and the share of first-time buyers is holding around 30 percent, which means transactions are being driven by existing homeowners looking to relocate, said Yun.
The housing market has strengthened as of late, bolstered by a job market that’s added almost 3 million workers to payrolls over the past year. At 5.3 percent, the unemployment rate is bumping up against the level that Federal Reserve policy makers consider full employment.
Fed officials are monitoring progress in the economy as they consider when to raise their benchmark interest rate for the first time since 2006. In Congressional testimony last week, Chair Janet Yellen said “homebuilding has picked up somewhat lately, although the demand for housing is still being restrained by limited availability of mortgage loans to many potential homebuyers.”
That makes it harder for them to take advantage of mortgage rates that remain at historically low levels. The average rate for a 30-year fixed mortgage was 4.09 percent in the week ended July 16, according to data from Freddie Mac in McLean, Virginia. While that’s the highest since October, it compares with the 6.06 percent average in the five years before the last recession began.
Homebuilders are optimistic about their industry’s prospects. The National Association of Home Builders/Wells Fargo sentiment gauge held in July at the highest level since November 2005, as the sales outlook climbed to the highest in a decade.
Such attitudes may be prompting them to boost construction, which would help alleviate a dearth of new and existing available properties. Housing starts rose 9.8 percent to a 1.17 million annualized rate, the second-highest level since November 2007, as ground-breaking on multifamily dwellings jumped 29.4 percent.
WASHINGTON — The U.S. housing market has sizzled this summer, lifting expectations that home sales will finally help drive an economic expansion now in its seventh year.
Or will it?
Signs are emerging that housing’s momentum may be destined to falter in coming months. Analysts note that some of the key foundations needed to sustain a brisk pace of home-buying in the long run appear to be missing.
The U.S. economy had only just begun to derive strength from housing for the first time since the Great Recession began in 2007. If home sales flag, that strength would fizzle.
The main problem is also the simplest: There just aren’t enough homes available. Robust demand has failed to draw many sellers into the market. And few in the industry foresee a flurry of home listings arriving soon.
Other pressures will also likely slow sales. Steadily rising home prices can put ownership out of reach for some. What’s more, builders are increasingly focused on apartment construction rather than single-family homes.
And then there are mortgage rates, which have crept up from recent lows and made it incrementally harder for some would-be buyers already struggling to afford a purchase. Some buyers are rushing to finalize deals for fear that rates will keep rising — a trend that could depress demand later this year.
“What we fear is next is if interest rates rise and prices rise,” said Deborah Heffernan, a Boston-area broker. “That combination will definitely eliminate people from the market.”
Early this spring, buyers leapt back into the market. Mortgage rates were just slightly above their 2012 lows, and nearly two years of solid job growth had generated millions of new paychecks.
Sales of existing homes have surged 9.6 percent in the past 12 months, according to the National Association of Realtors. In June, they hit an annual rate of 5.49 million, a pace last achieved before the recession began. And sales of new homes have jumped 21 percent through the first half of 2015, the government reported Friday.
But an unusual trend has taken hold: Stronger home sales have yet to motivate many people to put their homes on the market. Listings for existing homes have barely edged up in the past year. And the pace of home building remains subpar compared with previous economic expansions.
With buyer demand outstripping supply, the national median sales price for homes last month reached $236,400, the highest ever recorded, the Realtors said.
For many would-be buyers, those higher prices are manageable if mortgage rates remain ultra-low. In June, the average 30-year fixed mortgage was 3.8 percent. The average has since topped 4 percent as the Federal Reserve has moved toward raising a key interest rate from its near-zero level. When the Fed last prepared to curtail its stimulus efforts in 2013, rates spiked and home sales sank.
Though only modestly up, the higher mortgage rates are having a dampening effect, according an index of buyer demand released Thursday by the national real estate brokerage Redfin. It expects a slowdown in the growth of sales and prices as buyers pursue less expensive homes.
“Interest rates are having an effect,” said Nela Richardson, chief economist at Redfin. “It’s making buyers a bit more conservative.”
In some key markets, prices have begun to stagnate as buyers seem to be retreating. A majority of homes in Chicago, Phoenix, Los Angeles, New York and Washington, D.C., either lost value or basically flat-lined during May, according to a study by Weiss Residential Research.
Weiss’ analysis points to a contributing factor for the shortage of available homes: Many homeowners can’t find affordable homes themselves and so can’t list their own properties for sale.
“The reason why demand is high relative to supply is that homeowners are having a hard time moving up,” said Allan Weiss, founder of Weiss Residential Research. “There is gridlock.”
In addition, many Americans remain squeezed by sluggish pay raises and have chosen to continue to rent. And some who do want to buy are unmoved by the limited selection and have decided to wait, said Tony Smith, a real estate broker in Charlotte, North Carolina.
“Buyers are leaving the market because they don’t have anything to buy,” Smith said. “Some of them get frustrated and sign another lease.”
Indeed, home ownership is declining, and renting has surged. Fewer than 64 percent of Americans own homes, the lowest level since 1989, according to the Census Bureau. The share of people under age 35 who own has dropped to around 35 percent from a high of 44 percent in 2004.
Marina Rodriguez, a 26 year-old dental hygienist, recently signed a lease on a one-bedroom apartment in suburban Chicago.
“The idea of buying is a little scary — it’s a huge financial obligation,” she said. “I would rather rent and travel and be year-to-year then be locked down.”
Builders are tapping into the rental market. Nearly all the 7.4 percent increase in June building permits came from apartment complexes, the government said last week. The three-story townhomes that Chicago-based REVA Development Partners once sold to first-timers and empty-nesters are now being rented.
“There has been a fundamental shift in people’s attitudes toward home ownership,” said the Matt Nix, the firm’s principal.
There’s also evidence that construction is topping out, a potential blow to overall economic growth. The American Institute of Architects said its index that tracks billings for houses and apartments has reached a four-year low. There’s often a nine- to 12-month lag between drawing up blueprints and a groundbreaking, a sign that builders view the current demand as short-lived.
“What we’re seeing now is going to hit construction in 2016,” said Kermit Baker, the institute’s chief economist. “It does look like that market is getting close to peaking.”
– The Associated Press
By Vicki Needham – 07/24/15 02:55 PM EDT