US home sales rise in October

WASHINGTON (AP) — Americans bought homes in October at the briskest pace this year, a sign that the sluggish housing market is turning around.

Sales of existing homes rose 1.5 percent to a seasonally adjusted annual rate of 5.26 million last month, the National Association of Realtors said Thursday. That’s up from a revised pace of 5.18 million in September. October marked the first month in 2014 when sales increased compared to a year ago, registering a 2.5 percent gain.

Still, the Realtors project that 2014 sales will fall below 2013 levels.

“Continued gains in existing home sales are going to be difficult,” said Ted Wieseman, an analyst at Morgan Stanley.

Home sales slumped through much of 2014 after a three-year rally in the wake of the recession and the implosion of the housing market. Harsh winter weather crippled sales at the beginning of 2014, just as tight credit, rising home prices and essentially flat incomes increasingly limited the number of buyers who could afford a home.

At the same time, investors are backing off properties to either rent out or renovate and resell.

Over the past 12 months, the share of homes being bought by investors has slipped to 15 percent from 19 percent, according to the Realtors. As the real estate market has mended from the recession, the opportunity has eroded for investors to profit from buying homes at steep discounts.

Just 4 percent of the single-family houses sold in the third-quarter were flipped by investors, who frequently bought distressed properties on the cheap, fixed them up and put them back on the market, according to a report released Thursday by housing data firm RealtyTrac.

Flipping accounted for 5.6 percent of sales during the same period in 2013. Its share nearly reached 10 percent in 2012.

Not counting renovation costs and other expenses, investors made on average a 36 percent return_$75,900_on each home they flipped. That profit margin fell from 37 percent last year. But unlike recent years when flippers bought at a discount and sold the homes at a discount compared with the broader market, sales are now at a 6 percent premium, suggesting that their repairs are more extensive than in the past.

“The flippers aren’t just slapping on a fresh coat of paint and rolling out new carpets,” said Daren Blomquist, vice president at RealtyTrac.

Median home prices rose 5.5 percent over the past 12 months to $208,300, according to the October sales report.

First-time buyers have yet to return to the market, representing just 29 percent of sales last month. This group historically accounts for 40 percent of sales.

The time on the market is also steadily increasing. It took 63 days on average to sell a home last month versus 44 days in June during the height of the summer buying season.

The Realtors estimate that 4.94 million existing homes will be sold this year, down 3 percent from 5.09 million in 2013. Analysts say sales of roughly 5.5 million existing homes are common in a healthy real estate market.

October sales improved in the Northeast, Midwest and South compared to the previous month, but purchases declined in the West.

The uptick in activity caused the inventory of homes on the market to slip to 5.1 months. When the supply of homes for sale falls beneath 5 months, it usually signals accelerating price growth.

Home prices have been increasing at a much faster clip than incomes, hurting affordability and causing sales to drag. Prices increased 5.6 percent in September compared with a year ago, real estate data provider CoreLogic reported. While the pace of appreciation has slowed this year, it still is almost three times greater than the approximately two percent increase in average wages tracked by the Labor Department.

Lower mortgage rates in recent weeks have improved affordability, though sales have yet to rise substantially. Average 30-year mortgage rates have been hovering around 4 percent, down nearly half a percentage point since January.

Still, other reports suggest that home sales could improve in 2015.

The National Association of Home Builders/Wells Fargo index rose to 58 this month, up from 54 in October, a sign that sales of newly-built homes should continue to improve over the next six months. Readings above 50 indicate more builders view sales conditions as good rather than poor.

Separately, the Commerce Department reported Wednesday that applications for building permits rose 4.8 percent in October to 1.08 million, evidence that construction activity could increase next year.

NAR’s got plenty of free ‘.realtor’ domains left to give away

The National Association of Realtors is ready to give away 500,000 free “.realtor” domains to members, and realtor.com will host agents’ profile pages for them at no charge. But nearly a month after NAR opened up the .realtor domain rush, only about 5 percent of the trade group’s 1 million  members have claimed their own free, custom URL.

NAR opened up “priority registrations” for members to stake claims to .realtor domains a year ago, and started issuing them on Oct. 23. Members can sign up for more than one .realtor domain, but must pay a domain fee for the extras, which is $39.95 per year per domain.

All told, almost 50,000 Realtors have claimed a free domain, and more than 85,000 .realtor sites have been registered, according to NAR spokeswoman Sara Wiskerchen.

While NAR still has 450,000 free domains to give away, .realtor is already the fourth most popular new “generic top-level” domain approved by the Internet Corporation for Assigned Names and Numbers, according to Domain Name Wire.

Those who obtain .realtor domains must follow business rules set out by NAR, which, among other requirements, dictate that members’ first, last or full names must be part of the domain.

Those restrictions — and the lack of appeal of a website address tied to an agent’s name, rather than a .com address attached to a geographic location — prompted St. Paul, Minnesota, broker and Inman columnist Teresa Boardman to pass.

“I think I’ll just stick with my .com domains,” Boardman wrote last month. “I can have domain names like StPaulRealEstateBlog.com and StPaulCondolife.com and StPaulPhotos.com and several others that don’t include my name, or the words sell or sold. The domain names are more about real estate, not about me.”

But Bryn Kaufman, principal broker and creator of OahuRE.com, thinks that if enough Realtors create agent profile pages with .realtor domains, that could turn Google into a powerful tool for consumers to track down local agents.

“Most likely, the [agents] with the most closed sales, the most reviews, and that have been around the longest will come up on Page 1″ of Google search results, Kaufman wrote on the GeekEstate blog.

Until recently, top-level domains had been restricted to a handful of familiar domains like “.com,” “.net” and “.org.” But since ICANN began allowing firms to apply to manage new domains, .realtor is one of hundreds that are coming online.

As NAR made clear in applying to ICANN to create and manage the new domain, registration of .realtor domains will be restricted to members of NAR and the Canadian Real Estate Association.

NAR is making .realtor domains free for one year for the first 500,000 of its more than 1 million members who sign up. CREA is offering .realtor domains free for a year to the first 10,000 members who claim their domain.

 

Profile

GIF of a new realtor.com agent profile page, which is tied to a .realtor domain.

Those who get a .realtor domain can attach it to any site, but NAR makes it easy for members to direct it to their realtor.com profile pages, which are free.

During the .realtor claim process, NAR prompts its members to select one of three options for each domain they register, Wiskerchen said. They can choose to attach the domain to their free realtor.com profile website, to redirect the domain to an existing Web address or to use the .realtor domain as the primary Web address for a hosted site.

“If they (choose the realtor.com profile), they’ll receive an email with instructions to activate their profile site and direct their .realtor domain there,” Wiskerchen said. Members can change up how their domain works at any time by logging back into the system on NAR, she said.

Once members tie their .realtor domain to the realtor.com profile page, content from their blogs and social media will begin automatically showing up on the profiles, according to a video on NAR’s site describing the .realtor claim process. The profiles will also showcase the Realtors’ realtor.com listings, showings and closed transactions as well as client recommendations.

Realtor.com teased the new version of its agent profiles back in May, but has yet to formally announce the new profiles. An agent’s listing data would only show up on the profile with the agent’s permission, realtor.com’s senior director of product management, Ernie Graham, told Inman at the time.

NAR member Cinthia Ane chose to tie her .realtor domain to her realtor.com profile. See it here.

In conjunction with the rollout of the .realtor domain, NAR partnered with website developer Placester to give members with a .realtor domain six months of free hosting and a free website design, Wiskerchen said.

Currently, just brokers and agents can sign up for .realtor accounts, but beginning in 2015 NAR will begin allowing Realtor organizations such as state and local Realtor associations, association multiple listing services, affiliated institutes, societies and councils, and NAR strategic business partners to register a .realtor domain.

MLSs and associations that help promote the .realtor domain to their members will be eligible to receive a free .realtor domain for up to five years. An application form for MLSs and associations, available now, details marketing requirements.

In October, NAR won the right to manage the .realestate top-level domain. Details and pricing of the new domain are expected in the second quarter of 2015.

The domain .homes has been assigned to DERHomes LLC, a wholly owned subsidiary of Dominion Enterprises, which owns Homes.com and ForRent.com, among many other brands.

Existing home sales for October pick up to an unexpected one-year high

The US housing market got a few pieces of good news this week. The latest? The pace of Americans buying pre-owned homes hit a one-year high last month.

Existing home sales picked up 1.5 percent to a 5.26 million annualized pace in October, according to data released Thursday by the National Association of Realtors (NAR). Analysts had been expecting sales to fall to a 5.16 million pace, from a revised 5.18 million in September. It was the fastest rate for existing home sales since September 2013, representing a 2.5 percent gain from October of last year.

“The October result was above what was suggested by the September pending existing home sales, which had indicated little change in actual sales relative to their September pace,” Joshua Shapiro, an economist with MFR, Inc., writes via e-mailed analysis.

Buyers “continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,” NAR’s chief economist says in the organization’s release of the October data. “Furthermore, the job market has shown continued strength in the past six months. This bodes well for solid demand to close out the year and the likelihood of additional months of year-over-year sales increases.” 

The report comes on the heels of two hopeful signs for the housing market earlier this week. Home-builder confidence has seen a healthy increase this month, thanks to continued low interest rates and a boost in buyer traffic, according to data released Tuesday by the National Association of Home Builders (NAHB).  And housing starts, a strong indicator of future home purchases, fell 2.8 percent in October from September. However, the dip was due to a plunge in the volatile multifamily home sector. Starts on single family homes, which make up two thirds of the overall market, increased 4.2 percent to reach their highest pace since  November of last year.

“Single-family building permits are the figures to watch here, and they did not disappoint in October,” IHS Global Insight economists Patrick Newport and Stephanie Karol wrote Wednesday in an e-mailed report. “However, only one region of the country (the South) seems to be digging itself out of the rut that all regions have been stuck in since the end of 2012. All other regions continue to move sideways – a worrying trend.”

There were concerns on the existing sales front as well. The percentage of first-time buyers went unchanged at 29 percent, while the share of all-cash buyers and investors increased to 27 percent and 5 percent, respectively. A strong market has a small share of such buyers and a more robust market for families and first-time buyers.

Still, analysts are hopeful that sales gains will continue in the near term. “Our virtuous cycle spins on for single-family homes,” Mr. Newport and Ms. Karol wrote in a Thursday report. “Yearly price growth looks stable and positive. Current market conditions are unlocking a strong demand for existing single-family homes; the affordability index rose 4.5 percent month-on-month in September (i.e. homes were more affordable), granting buyers the additional purchasing power they need to keep bidding prices up…. Mortgage rates have fallen since the end of September, which has helped to spur an uptick in purchase applications over the past three weeks. This should translate into increased sales over the course of the next two months, since home sales are recorded when the transaction has finalized. We therefore expect that sales rates should continue to advance as the year draws to a close.”

Previously Owned U.S. Home Sales Increase to One-Year High

The U.S. economic expansion, now in its sixth year, shows no sign of flagging as home sales climb, factories pump out more goods and the labor market strengthens.

Existing homes sold at a 5.26 million annual pace in October, the most since September 2013, the National Association of Realtors reported today in Washington. Manufacturing in the Philadelphia region surged this month, fewer Americans filed claims for jobless benefits last week and a gauge of the outlook for the next six months beat forecasts, other data showed.

“It’s all encouraging,” said Kathleen Bostjancic, a financial-market economist at Oxford Economics in New York. “All the data are lining up on the strong side, indicating the economy is accelerating.”

Retailers such as Best Buy Co. (BBY) are getting a lift as an improving job market and the cheapest gasoline prices in four years boost consumer confidence heading into the holiday-shopping season. The reports bear out forecasts from Federal Reserve policy makers, who last month predicted that the global slowdown would have a “quite limited” effect on the U.S.

The Standard Poor’s 500 Index rose, paced by rallies among retailers and energy companies. The SP 500 climbed 0.1 percent to 2,050.8 at 12:56 p.m. in New York.

The U.S. data helped reverse a drop in equity futures earlier in the day after reports showed economies abroad were weakening. A purchasing managers’ index for factories and services in the euro area unexpectedly dropped in November to the lowest level in 16 months, according to London-based Markit Economics. In China, a factory gauge fell this month to a six-month low.

Fed Minutes

Minutes of the Fed’s Oct. 28-29 meeting issued yesterday showed officials discussed global economic developments, which ultimately didn’t figure in their post-meeting statement. While policy makers “pointed to a somewhat weaker economic outlook and increased downside risks in Europe, China, and Japan,” they judged that the impact on the U.S. economy is “likely to be quite limited.”

Purchases of previously owned U.S. homes last month climbed 1.5 percent from a revised 5.18 million pace in September, the real-estate agents’ group said. It was the fifth consecutive month that the sales pace topped 5 million. Prices also climbed, the group said.

Employment growth and mortgage rates near historic lows are helping stir buying interest that will probably continue to underpin the economy.

‘Healthier’ Market

“This is much healthier than we’ve seen over the last year or so,” said Scott Brown, chief economist at Raymond James Associates in St. Petersburg, Florida, who projected a 5.25 million pace of sales. “We’re still a long way from recovery, but we’re on our way.”

The median forecast in a Bloomberg survey of 78 economists called for a 5.15 million pace of resales, with estimates ranging from 5.05 million to 5.27 million. September’s figure was revised from a previously reported 5.17 million.

The Federal Reserve Bank of Philadelphia’s factory index jumped to 40.8 in November, the highest since 1993, the branch of the central bank reported. Readings greater than zero signal growth. The orders gauge surged to the highest level since 1988.

Other manufacturing data today was less ebullient. The Markit Economics preliminary index for this month decreased to a 10-month low of 54.7. A reading greater than 50 indicates expansion. The slowdown was paced by a drop in exports that probably reflects weakening economies elsewhere.

Fewer Claims

Today’s news on the labor-market front was more upbeat. Jobless claims fell by 2,000 to 291,000 in the week ended Nov. 15 from an upwardly revised 293,000 in the prior period, according to the Labor Department. It was the 10th straight week the number of applications for unemployment benefits has been lower than 300,000, which hasn’t happened since 2000.

The drop in claims “bodes well in terms of payroll growth,” said Gregory Daco, lead U.S. economist at Oxford Economics. “We’re seeing good prospects and a strong trend.”

The recent drop in claims was among reasons the index of leading economic indicators rose last month. The Conference Board’s gauge of the outlook for the next three to six months climbed 0.9 percent in October, the most since July, the New York-based group said today.

The trend in the index “points to continued economic growth through the holiday season and into early 2015,” Ken Goldstein, an economist at the Conference Board, said in a statement. “This is consistent with our outlook for relatively good, but not great, consumer demand over the near term.”

Increasing Sales

Richfield, Minnesota-based Best Buy, the world’s largest electronics chain, posted a surprise sales gain last quarter amid demand for high-definition televisions.

Even after its biggest increase in same-store sales in more than four years, Best Buy said revenue this quarter will be little changed. Chief Financial Officer Sharon McCollam cited hurdles such as heavy discounting this holiday season and a potential shipping disruption from labor negotiations at West Coast ports.

“The promotional environment is already intense, a little bit more intense than last year,” Chief Executive Officer Hubert Joly said on a conference call.

American consumers are getting a lift from falling fuel costs. The average price of a gallon of regular unleaded gas was $2.85 as of Nov. 19, its lowest level since November 2010, according to AAA, the largest U.S. auto club.

Sentiment Firms

Consumer sentiment advanced last week to the highest level since January 2008 as Americans grew more optimistic about their financial well-being and the buying climate, according to another report today. The Bloomberg Consumer Comfort Index (COMFCOMF) climbed to 38.5 in the period ended Nov. 16 from 38.2 the week before.

“The biggest point for consumers is it’s going to be a little bit easier with those gasoline prices coming down,” said Anika Khan, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “I’m optimistic.”

The drop in energy prices kept the U.S. cost of living little changed last month, according to Labor Department data also issued today. No change in the consumer-price index followed a 0.1 percent increase in September. Core costs, which strip out food and fuel, rose 0.2 percent in October, the biggest gain in five months.

Rising costs for rents, airline fares, hotel rooms and furniture show the slowing in overseas growth that is helping restrain fuel prices and overall inflation isn’t rippling through the economy. Some Fed policy makers have been among those predicting that cooling price pressures will prove temporary as the U.S. economy strengthens.

To contact the reporters on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net; Victoria Stilwell in Washington at vstilwell1@bloomberg.net

To contact the editor responsible for this story: Carlos Torres at ctorres2@bloomberg.net Vince Golle

PulteGroup (PHM) Stock Gaining Today on Strong October Home Sales

NEW YORK (TheStreet) –PulteGroup
(PHM) shares are up 1.4% to $21.24 in trading on Thursday as the U.S. home builder benefits from high October existing home sales numbers.

The National Association of Realtors (NAR) reported a 1.5% rise in existing homes sales to a seasonally adjusted rate of 5.26 million in October, the first month this year where the number was higher than the same period last year.

“Sales activity in October reached its highest annual pace of the year as buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,” said the NAR. 

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TheStreet Ratings team rates PULTEGROUP INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

“We rate PULTEGROUP INC (PHM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company’s strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.”

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • PHM’s revenue growth has slightly outpaced the industry average of 7.1%. Since the same quarter one year prior, revenues slightly increased by 0.8%. This growth in revenue does not appear to have trickled down to the company’s bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the SP 500 over the same period, despite the company’s weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • PULTEGROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PULTEGROUP INC increased its bottom line by earning $6.74 versus $0.53 in the prior year. For the next year, the market is expecting a contraction of 84.0% in earnings ($1.08 versus $6.74).
  • The gross profit margin for PULTEGROUP INC is rather low; currently it is at 23.73%. Regardless of PHM’s low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PHM’s net profit margin of 8.81% compares favorably to the industry average.
  • You can view the full analysis from the report here: PHM Ratings Report

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NAR can’t give away new ‘.realtor’ domains

The National Association of Realtors is ready to give away 500,000 free “.realtor” domains to members, and realtor.com will host agent’s profile pages for them at no charge. But nearly a month after NAR opened up the .realtor domain rush, only about 50,000 members have claimed their own free, custom URL.

NAR members started staking claims to .realtor domains on Oct. 23. Members can sign up for more than one .realtor domain, but must pay a domain fee for the extras, which is $39.95 per year per domain. All told, more 85,000 .realtor sites have been registered so far, according to NAR spokeswoman Sara Wiskerchen.

That makes .realtor the fourth-most popular new “generic top-level” domains approved by the Internet Corporation for Assigned Names and Numbers, according to Domain Name Wire.

Those who obtain .realtor domains must follow business rules set out by NAR, which, among other requirements, dictate that members’ first, last or full names must be part of the domain.

Those restrictions — and the lack of appeal of a website address tied to an agent’s name, rather than a .com address attached to a geographic location — prompted St. Paul, Minnesota broker and Inman columnist Teresa Boardman to pass.

“I think I’ll just stick with my .com domains,” Boardman wrote last month. “I can have domain names like StPaulRealEstateBlog.com and StPaulCondolife.com and StPaulPhotos.com and several others that don’t include my name, or the words sell or sold. The domain names are more about real estate, not about me.”

But Bryn Kaufman, principal broker and creator of OahuRE.com, thinks that if enough Realtors create agent profile pages with .realtor domains, that could turn Google into a powerful tool for consumers to track down local agents.

“Most likely, the [agents] with the most closed sales, the most reviews, and that have been around the longest will come up on page 1″ of Google search results, Kaufman wrote on the GeekEstate blog.

Until recently, top-level domains had been restricted to a handful of familiar domains like “.com,” “.net” and “.org.” But since ICANN began allowing firms to apply to manage new domains, .realtor is one of hundreds that are coming online.

As NAR made clear in applying to ICANN to create and manage the new domain, registration of .realtor domains will be restricted to members of NAR and the Canadian Real Estate Association.

NAR is making .realtor domains free for one year for the first 500,000 of its more than 1 million members who sign up. CREA is offering .realtor domains free for a year to the first 10,000 members who claim their domain.

 

Profile

GIF of a new realtor.com agent profile page, which is tied to a .realtor domain.

Those who get a .realtor domain can attach it to any site, but NAR makes it easy for members to direct it to their realtor.com profile pages, which are free.

During the .realtor claim process NAR prompts its members to select one of three options for each domain they register, Wiskerchen said. They can choose to attach the domain to their free realtor.com profile website, to redirect the domain to an existing Web address or to use the .realtor domain as the primary Web address for a hosted site.

“If they (choose the realtor.com profile), they’ll receive an email with instructions to activate their profile site and direct their .realtor domain there,” Wiskerchen said. Members can change up how their domain works at any time by logging back into the system on NAR, she said.

Once members tie their .realtor domain to the realtor.com profile page, content from their blogs and social media will begin automatically showing up on the profiles, according to a video on NAR’s site describing the .realtor claim process. The profiles will also showcase the Realtors’ realtor.com listings, showings and closed transactions as well as client recommendations.

Realtor.com teased the new version of its agent profiles back in May, but has yet to formally announce the new profiles. An agent’s listing data would only show up on the profile with the agent’s permission, realtor.com’s senior director of product management Ernie Graham told Inman at the time.

NAR member Cinthia Ane chose to tie her .realtor domain to her realtor.com profile. See it here.

In conjunction with the rollout of the .realtor domain, NAR partnered with website developer Placester to give members with a .realtor domain six months of free hosting and a free website design, Wiskerchen said.

Currently, just brokers and agents can sign up for .realtor accounts, but beginning in 2015 NAR will begin allowing Realtor organizations such as state and local Realtor associations, association multiple listing services, affiliated institutes, societies and councils and NAR strategic business partners to register a .realtor domain.

MLSs and associations that help promote the .realtor domain to their members will be eligible to receive a free .realtor domain for up to five years. An application form for MLSs and associations, available now, details marketing requirements.

In October, NAR won the right to manage the .realestate top-level domain. Details and pricing of the new domain are expected in the second quarter of 2015.

The domain .homes has been assigned to DERHomes LLC, a wholly owned subsidiary of Dominion Enterprises, which owns Homes.com and ForRent.com, among many other brands.

Existing home sales continue to pick up pace



page16 house for sale

Sales of existing homes surpassed last year’s pace for the first time this year in October, according to the National Association of Realtors.









Kent Hoover
Washington Bureau Chief

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Sales of existing homes rose to an adjusted annual rate of 5.26 million in October, the highest pace since September 2013.

That’s according to the National Association of Realtors, which attributed the increase to low interest rates, more housing inventory and stable price growth.

“Furthermore, the job market has shown continued strength in the past six months,” said NAR Chief Economist Lawrence Yun. “This bodes well for solid demand to close out the year and the likelihood of additional months of year-over-year sales increases.”

The median price for an existing home in October was $208,300, 5.5 percent higher than it was a year ago.



Joseph Croce receives RCE designation from National Association of Realtors


By Contributed Report


Posted Nov. 21, 2014 @ 2:01 am


Existing Homes Sales Rise 1.5% in October

U.S. home resales jumped to their highest level in more than a year in October and outpaced the sales level a year ago for the first time in 2014, further evidence the housing market is on a recovery path.

The National Association of Realtors (NAR) on Thursday said existing home sales rose 1.5 percent to an annual rate of 5.26 million units, the highest rate since September of last year. Sales rose 2.5 percent compared to a year ago, the first time since October 2013 that nesales have risen above the prior-year levels.

Economists polled by Reuters had forecast sales falling to a 5.16 million-unit pace, from an upwardly revised rate of 5.18 million units in September.

“This is the first time in the year where we have seen a year over year annual gain, which means that existing home sales have made that successful U-turn,” Lawrence Yun, NAR’s chief economist, told reporters.

Housing is slowly regaining its footing after activity stalled in the second half of 2013 following a run-up in mortgage rates. While the sector continues to be hobbled by sluggish wage growth, a recent decline in mortgage rates should help support sales.

A separate report this week from the Mortgage Bankers Association showed applications for loans to purchase homes surged last week as low rates lured potential buyers.

(Reporting by Anna Yukhananov; Editing by Paul Simao)

Existing-Home Sales Rise in October, First Year-Over-Year Increase Since October 2013

WASHINGTON, DC–(Marketwired – Nov 20, 2014) – Existing-home sales rose in October for the second straight month and are now above year-over-year levels for the first time in a year, according to the National Association of Realtors®.

Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.5 percent to a seasonally adjusted annual rate of 5.26 million in October from an upwardly-revised 5.18 million in September. Sales are at their highest annual pace since September 2013 (also 5.26 million) and are now above year-over-year levels (2.5 percent from last October) for the first time since last October.

Lawrence Yun, NAR chief economist, says the housing market this year has been a tale of two halves. “Sales activity in October reached its highest annual pace of the year as buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,” he said. “Furthermore, the job market has shown continued strength in the past six months. This bodes well for solid demand to close out the year and the likelihood of additional months of year-over-year sales increases.”

The median existing-home price2 for all housing types in October was $208,300, which is 5.5 percent above October 2013. This marks the 32nd consecutive month of year-over-year price gains.

Total housing inventory3 at the end of October fell 2.6 percent to 2.22 million existing homes available for sale, which represents a 5.1-month supply at the current sales pace — the lowest since March (also 5.1 months). Unsold inventory is now 5.2 percent higher than a year ago, when there were 2.11 million existing homes available for sale.

“The growth in housing supply this year will likely prevent the drastic sales slowdown and coinciding spike in home prices we saw last winter due to low inventory,” says Yun. “However, more housing starts are needed to increase supply, meet current demand and keep price growth in check.”

All-cash sales were 27 percent of transactions in October, up from 24 percent in September but down from 31 percent in October of last year. Individual investors, who account for many cash sales, purchased 15 percent of homes in October, up from 14 percent last month but below October 2013 (19 percent). Sixty-five percent of investors paid cash in October.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage in October dropped to 4.03 percent, its lowest level since June 2013 (4.07 percent), and down from 4.16 percent in September.

The percent share of first-time buyers in October remained at 29 percent for the fourth consecutive month; first-time buyers have represented less than 30 percent of all buyers in 18 of the past 19 months. A separate NAR survey released earlier this month4 revealed that the annual share of first-time buyers fell to its lowest level in nearly three decades.

Distressed homes5 — foreclosures and short sales — were in the single-digits for the third month this year, decreasing to 9 percent in October from 10 percent in September; they were 14 percent a year ago. Seven percent of October sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 15 percent below market value in October (14 percent in September), while short sales were discounted 10 percent (14 percent in September). 

“Although distressed sales are trending downward, there are still areas (such as judicial states Florida, Maryland and New York) plagued by foreclosures, and homeowners faced with the awful choice between a tax bill they are unable to pay and losing their home,” says NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark. “Realtors® urge the U.S. House to schedule a vote on ‘The Mortgage Forgiveness Tax Relief Act,’ as soon as possible. This bipartisan legislation would extend an expired provision that has helped millions of distressed American families by allowing tax relief when lenders forgive a portion of the mortgage debt they owe.”

Properties typically stayed on the market in October longer (63 days) than last month (56 days) and a year ago (54 days). Short sales were on the market for a median of 150 days in October, while foreclosures sold in 68 days and non-distressed homes took 61 days. Thirty-three percent of homes sold in October were on the market for less than a month.

Single-family home sales increased 1.3 percent to a seasonally adjusted annual rate of 4.63 million in October from 4.57 million in September, and are now 2.9 percent above the 4.50 million pace a year ago. The median existing single-family home price was $208,700 in October, up 5.6 percent from October 2013.

Existing condominium and co-op sales increased 3.3 percent to a seasonally adjusted annual rate of 630,000 units in October from 610,000 in September, unchanged from the 630,000 unit pace a year ago. The median existing condo price was $205,400 in October, which is 4.5 percent higher than a year ago.

Regionally, October existing-home sales in the Northeast climbed 2.9 percent to an annual rate of 710,000, and are 4.4 percent above a year ago. The median price in the Northeast was $246,900, which is 1.2 percent above a year ago.

In the Midwest, existing-home sales jumped 5.1 percent to an annual level of 1.24 million in October, and are 2.5 percent higher than October 2013. The median price in the Midwest was $164,100, up 6.8 percent from a year ago.

Existing-home sales in the South increased 2.8 percent to an annual rate of 2.17 million in October, and are now 5.3 percent above October 2013. The median price in the South was $178,000, up 5.1 percent from a year ago.

Existing-home sales in the West declined 5.0 percent to an annual rate of 1.14 million in October, and remain 3.4 percent below a year ago. The median price in the West was $296,800, which is 5.0 percent above October 2013.

NOTE: For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample — about 40 percent of multiple listing service data each month — and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

3Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

4Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors®Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.

5Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at Realtor.org.

Realtor.com®, NAR’s listing site, posts metro area median listing price and inventory data at: www.realtor.com/data-portal/Real-Estate-Statistics.aspx.

The fourth quarter Commercial Real Estate Report/Forecast will be released November 24, the Pending Home Sales Index for October will be released November 26, and existing-home sales for November are scheduled for December 22; release times are 10:00 a.m. EDT.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the “News, Blogs and Videos” tab on the website. Statistical data in this release, as well as other tables and surveys, are posted in the “Research and Statistics” tab.