Half Of U.S. Homes Now Selling In 40 Days Or Fewer, Says National Association …

National Association of REALTORS® (NAR) shows homes selling in 40 days, on average.

Home Sales Hit 22-Month Best

Home sales volume continues to impress nationwide.

According to the National Association of REALTORS®, 5.35 million homes sold in May 2015 on a seasonally-adjusted, annualized basis, continuing this year’s strong start for the housing market.

Current mortgage rates, which have been low since October of last year, are helping to boost sales.

The typical prime mortgage borrower now gets access to rates near four percent; with lower rates available to borrowers using FHA loan and VA loans.

Furthermore, with an abundance of low- and no-downpayment mortgage programs available to first-time and repeat home buyers, the pool of potential buyers is as big as its been all decade. 32% of last month’s buyers were first-timers.

It’s all combining to help homes sell faster.

The median Days on Market for U.S. homes reached 40 days in May, which marks a 42% reduction from the start of the year. 

With 30-year mortgage rates below their year-ago levels, it’s a terrific time to be a home buyer. Mortgage rates are low and housing payments are as affordable as they’ve been during any time in the last two years. 

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Existing Home Sales: 5.35 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 May 2015 report showed 5.35 million homes sold on a seasonally-adjusted annualized basis, a five percent increase from the month prior and a 9% jump from one year ago.

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 May, Median Days on Market for an MLS-listed home was 40 days. This means that half of all homes sold were listed for forty days or fewer, which is the second-highest percentage in nearly two years.

Furthermore, 45% of homes sold in May sold within one month and many more were sold before ever getting listed at all, a sale-type known within real estate circles as “pocket listings”.

Multiple-offer situations are common and home prices are climbing, as a result.

There are a number of reasons why today’s homes may be selling more quickly.

One reason is seasonal. There are often more homes sold between March and September each year as compared to other months, and, after a particular frigid winter, pent-up demand may have spiked last month’s data.  

Median Days on Market showed a similar drop last spring; and the spring before that. 

Another reason why homes may be selling more quickly is because today’s mortgage rates continue to troll near four percent even as rents are rising in many U.S. markets.

Low mortgage rates have boosted buyer purchasing power approximately 10% from the start of last year. If you could afford a home for $300,000 last year, you can purchase a home for $330,000 this year with the same monthly payment.

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45% Of Homes Sold Within A Month

The May 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 40 days or fewer as demand outpaces supply in many U.S. markets.

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.

Days on Market can drop for a number of reasons. One reason is a general improvement in the U.S. economy. When the economy is performing well, consumers are more likely to take risks, which including moving to buy a home.

Another catalyst for a reduction in Days on Market is when mortgage rates remain low during period of rising rents; the answer to the question “Should I buy or should I rent” can change quickly as market conditions move.

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, 49% of consumers think now “is a good time to sell” a home — a 9-tick increase from February and 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”.

Strangely, though, NAR’s Existing Home Sales reports suggests that sellers may be misguiding; that the market is particularly strong. There is just a 5.1-month housing supply and supplies of less than six month are said to favor sellers over buyers in negotiations.

Home supply hasn’t been below six months going on three years. The market favors today’s sellers, but sellers aren’t necessarily believing it.

Get Today’s 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.

Compare today’s mortgage rates now. Complimentary rate quotes are available online with no social security number required to get started and no obligation to proceed whatsoever.

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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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