U.S. Existing-Home Sales Enter 14th Straight Month Of Declines
Decline suggests continued weakness in housing market despite strong economy. U.S. Existing-Home Sales Enter 14th Straight Month Of Declines (#GotBitcoin?)
The U.S. housing market continued to soften in April, with the spring selling season so far proving a disappointment despite falling mortgage rates and a strong economy.
Existing-home sales fell 0.4% in April from the previous month to a seasonally adjusted annual rate of 5.19 million, the National Association of Realtors said Tuesday. Compared with a year earlier, sales in April declined 4.4%, the 14th straight month of annual declines.
The housing market is “underperforming in relation to economic performance, with job creation and [lower] mortgage rates,” said Lawrence Yun, the trade group’s chief economist.
The housing market has struggled for more than a year as rising prices, higher mortgage rates and a shortage of inventory have led would-be home buyers to tap on the brakes.
Those factors seemed to be shifting in favor of buyers this spring, raising hopes for a sales rebound. Average mortgage rates have fallen nearly a percentage point since November, the number of homes for sale has grown and home-price growth has moderated.
So far, that hasn’t been enough to buoy sales. “The big headwinds that are keeping things down are still there,” said Cheryl Young, a senior economist at Trulia.
The report for April continued to show that the market is shifting in favor of buyers. The median sale price for an existing home in April was $267,300, up 3.6% from a year earlier. Home price appreciation has slowed significantly from a year ago, when price growth was running over 5%.
There was a 4.2-month supply of homes on the market at the end of April, based on the current sales pace, up from 4 months last April and the highest level this year, according to the Realtors.
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“Buyers have more time to make decisions on properties now. Last spring things were going really quick,” said Ashley Lauren Farnschlader, a real-estate agent in Philadelphia.
But the signs of a slowdown could be scaring off some buyers fearful of acquiring a house they may have difficulty selling in the event of another market downtown, reminiscent of the crash a decade ago.
“There are real risks there for the younger generation to get a little bit gun-shy at the first sign of things moderating,” said Ralph McLaughlin, deputy chief economist at CoreLogic Inc.
Nonetheless, economists cautioned against reading too much into the lackluster data for April. Pending home sales, which typically predict closed sales the following month, were up nearly 4% in March to an eight-month high. Economists said that closings may have been delayed by a backlog in mortgage applications.
“It’s possible for a month or so the process just got clogged, that lenders just weren’t expecting a surge of mortgage applications,” said David Berson, chief economist at Nationwide Insurance.
Purchases of previously owned homes account for most of U.S. homebuying, although the new-home market recently has been showing some signs of a rebound. Home-building in the U.S. increased 5.7% in April from the prior month, driven by an uptick in single-family construction across much of the country. A gauge of home-builder confidence, meanwhile, rose to the highest level since last fall.
“Our forecast is that any lull we’re seeing in the market now is temporary,” Mr. McLaughlin said.
U.S. Existing-Home Sales Declined 2.2% in September
Sales fell to a seasonally adjusted annual rate of 5.38 million.
Sales of previously owned U.S. homes declined in September, a sign that high prices and slim inventory continue to weigh on the housing sector despite low interest rates, strong employment and firmer wage growth.
Existing-home sales fell 2.2% in September from the previous month to a seasonally adjusted annual rate of 5.38 million, the National Association of Realtors said Tuesday. Economists surveyed by The Wall Street Journal expected sales declined 0.7% last month.
“The housing market is in an unbalanced situation” with soaring prices and persistent low inventory, said Lawrence Yun, the trade group’s chief economist.
Compared with a year earlier, sales in September rose 3.9%. Purchases of previously owned homes account for the bulk of U.S. home-buying. August’s sales were revised up slightly to a 5.50 million pace from an earlier estimate of a 5.49 annual pace.
The housing market’s weakness has come despite many favorable conditions for potential buyers. Mortgage rates have been dropping steadily in recent months. The average interest rate on a 30-year fixed-rate mortgage at the end of September was 3.64%, down from about 4% six months earlier, according to Freddie Mac.
Still, a shortage of homes for sale in some areas means home prices remain high. The median sale price for an existing home in September was $272,100, up 5.9% from a year earlier. That marked 91 straight months of year-over-year price gains and the strongest pace of appreciation since January 2018. There was a 4.1 month-supply of homes on the market at the end of September, based on the current sales pace.
U.S. Existing Home Sales Fell 1.7% in November
Tight supply of homes, especially on the cheaper end of the market, continues to be a limiting factor.
U.S. home sales are picking up in the second half of the year, a sign that low mortgage rates and a solid economy are helping to heat up the once-sluggish housing market going into next year.
Existing-home sales were up 2.7% in November from a year earlier, the fifth straight month of year-over-year gains, the National Association of Realtors said Thursday.
While home sales were down 1.7% compared with October at a seasonally adjusted annual rate of 5.35 million, economists said there are fresh signs that buyers are becoming more confident after a lethargic first half of the year. Sales sputtered through most of the spring selling season, when activity is normally high, falling annually every month until the summer.
Now, historically low mortgage interest rates and an increase in millennials looking to buy their first home are luring more buyers into the market. Millennials account for nearly half of home-purchase mortgage originations, according to data from Realtor.com. ( News Corp, parent of The Wall Street Journal, operates Realtor.com under license from the National Association of Realtors.)
The U.S. unemployment rate fell back to 3.5% in November, a 50-year low, and wage growth also has picked up modestly. The National Association of Home Builders added to the upbeat mood on Monday when it reported its housing market index, which measures industry confidence, rose in December to its highest level since June 1999.
Joseph LaVorgna, Natixis chief economist for the Americas, wrote in a note to clients Tuesday that the improvement in home-builder sentiment is a positive sign for the broader economy heading into 2020.
“Residential construction activity should be a meaningful, positive, contributor to real [gross domestic product] growth next year,” he wrote.
Still, others noted significant headwinds remain. The number of homes available remains low, economists say. That is especially true at the cheaper end of the housing market, as median home prices continue to rise in most parts of the country.
At the current sales pace, there was a 3.7-month supply of homes on the market at the end of November, below 4.0 months at the same time last year. Limited housing stock has contributed to higher home prices this year, with the median sales price for an existing home in November up 5.4% on year at $271,300.
“If we were building more homes under $300,000, these [sales] numbers would be through the roof right now,” said Robert Frick, an economist at Navy Federal Credit Union.
The number of homes sold in that price range continued to shrink, according to NAR’s data. Sales of homes priced at $250,000 and below declined in November from a year ago, while sales of those in the $500,000-to-$750,000 range posted the strongest gains, rising 8.0%.
“The new-home construction seems to be coming to the market, but we are still not seeing the amount of construction needed to solve the housing shortage,” Lawrence Yun, NAR’s chief economist, said in a news release.
Meanwhile, the average interest rate on a 30-year ﬁxed mortgage was 3.73% as of Dec. 12, according to Freddie Mac, up slightly from September’s lows but below year-earlier levels.
Low interest rates were one of the reasons that David Grant decided to buy a home this fall after a monthslong search in San Diego. Mr. Grant, a retail manager and writer, wanted to swap his rising rent with a mortgage payment on for a home priced around $500,000. But he was continually thwarted by higher bids.
“We were going almost every day to look at houses,” Mr. Grant said, recalling one tour that included squatters living in tents inside the home. “You make an offer, you get to the inspection, and there’s an issue”
He and his fiancée eventually settled on a three-bedroom home with a basement apartment they could rent to Mr. Grant’s brother. To make the mortgage, they obtained an FHA loan, requiring just 3.5% down.
Jodie Lee, a Redfin real-estate agent in San Diego, said more clients are looking for homes with adjacent apartments to rent out and help offset housing costs.
But the supply coming to market is dwindling, she said, as many homeowners are reluctant to sell on concerns they wouldn’t be able come by a new, suitable home.
“They can’t find something that checks all their boxes,” she said.
Some see a reason for optimism in new-home construction, however, which could provide opportunities for first-time buyers as well those looking to “move-up,” making more existing homes available for sale. In November, single-family housing starts rose to a rate of 918,000 units, the highest such number since July 2007.
U.S. Existing-Home Sales Unexpectedly Rise To Highest Since 2005
Sales of previously owned U.S. homes unexpectedly rose in October to the highest level in almost 15 years, extending a housing market boom fueled by record-low mortgage rates and buyers’ desire for properties in the suburbs.
Contract closings increased 4.3% from the prior month to an annualized 6.85 million, the strongest pace since November 2005, according to National Association of Realtors data released Thursday. The October rate exceeded all economists’ forecasts in a Bloomberg survey, which had a median estimate of 6.47 million.
The median selling price jumped 15.5% from a year earlier on an unadjusted basis to a record-high of $313,000, reflecting more sales of upper-end properties.
The report offers offers more evidence that the housing sector is providing a bigger push for an economic recovery at risk of a bigger slowdown as coronavirus cases surge and lawmakers remain at a stalemate over additional fiscal stimulus. However, housing momentum, driven in part by preferences for larger homes that double as office space during the pandemic, has led to a lack of available properties and higher prices.
“It’s quite amazing, and certainly surprising,” Lawrence Yun, NAR’s chief economist, said on a call with reporters. “It’s quite remarkable given that we’re still in the midst of the pandemic and the high unemployment rate.”
The association anticipates that the housing boom will be sustained next year. Yun forecasts existing-home sales to climb 10% to 6 million in 2021.
Combined with lean new-housing inventory, selling prices of existing homes grew in the third quarter at the fastest pace in seven years, restraining affordability, a separate report by the NAR showed last week.
Available inventory declined 19.8% in October from a year earlier to 1.42 million units. The inventory of houses would last a record-low 2.5 months at the current sales pace. Realtors see anything below five months of supply as a sign of a tight market.
Properties remained on the market for an average of 21 days in October, compared with 36 days a year ago, the NAR said. Some 72% of homes sold were on the market for less than a month.
Sales of previously owned one-family homes climbed 4.1% to a 6.12 million pace, while purchases of condominiums increased 5.8%.
The NAR’s report showed purchases of existing homes increased in all four U.S. regions. Sales in the South, the biggest region, and the Midwest increased to their strongest paces on record, while purchases in the West were the firmest since 2006.
For their part, builders are stepping up construction amid elevated backlogs. Starts of one-family homes in October hit the fastest pace since April 2007, and a measure of homebuilder sentiment is at a record high.
Previously owned home sales account for roughly 90% of U.S. transactions and are calculated when a contract closes.
U.S. Home Sales Rose To 14-Year High In October
Sales of previously owned homes climb 4.3%, fueled by low interest rates, desire for pricier houses.
U.S. home sales rose to a 14-year high last month, a rare bright spot for the economy as ultra low borrowing costs and the sudden shift in living preferences during the pandemic power the market.
October’s gains marked the fifth straight monthly increase and one of the best stretches for the housing market in several years. While home sales showed some signs of life before the coronavirus outbreak, they are running much hotter now.
“In the pandemic, nothing has been more surprising—positively surprising—than single-family housing,” said Mark Zandi, chief economist at Moody’s Analytics. As more Americans are working remotely, he said, “this is a fundamental shift in underlying housing preferences.”
Some families are leaving large cities or other crowded living circumstances in response to Covid-19. They have been willing to splurge on single-family homes despite a troubled job market and soaring home prices. Buyers have been aided by mortgage rates now at their lowest level since Freddie Mac began tracking them in 1971, the agency said on Thursday, which could drive sales momentum into next year.
A severe shortage of homes for sale is boosting demand for newly built housing, which could spur more hiring and spending by home builders. Increased home sales can also lead to consumer spending on appliances, furniture and other home goods.
The S&P Homebuilders Select Industry index is up 24.2% this year, compared with a 10.8% rise for the S&P 500, while shares of big builders such as Lennar Corp and D.R. Horton Inc. have more than doubled since late March. Demand for single-family homes has also extended to the rental market, where rents on single-family homes are rising at the fastest rate since last decade’s foreclosure crisis.
The market activity could cool off next year, economists say, when policies that allow homeowners to temporarily suspend mortgage payments expire. That could prompt more distressed sales. But robust demand is expected to persist, as a large generation of millennials continues to age into their prime homebuying years.
Existing-home sales rose 4.3% in October from September to a seasonally adjusted annual rate of 6.85 million, the highest level since February 2006, the National Association of Realtors said Thursday. The October sales marked a 26.6% increase from a year earlier.
Home prices have climbed in recent months, especially for expensive homes, while the supply of homes on the market remains constrained. The median existing-home price rose 15.5% from a year earlier to $313,000, a record high nominally and adjusted for inflation, NAR said.
“Home sales are just booming in the current environment,” said Lawrence Yun, NAR’s chief economist. “The upper-end market is really flying.”
As home prices continue to rise, economists say affordability is a growing concern. Record-low interest rates have offset much of the effect of higher prices for consumers this year. But the shortage of homes for sale is leading to bidding wars, making it harder for first-time home buyers to enter the market.
While some markets have been hotter than others this year, prices nearly everywhere have moved up of late. The median price for existing homes in each of the 181 metro areas tracked by NAR was higher in the third quarter from a year earlier.
Erica Robinson said she and her husband, James Robinson, viewed dozens of homes and put in more than 10 offers before buying a four-bedroom home in Hemet, Calif., in October. They widened the geographic area they were searching in to find bigger houses within their budget.
“We had to decide, what are we going to sacrifice?” Ms. Robinson said. “I personally wanted to throw in the towel more than once.”
Real-estate agents say demand remains high from shoppers looking for more space to accommodate working from home. Homes priced at over $1 million more than doubled in October compared with a year earlier, according to NAR.
Kristen Whitaker bought a three-bedroom townhouse with a small backyard in Philadelphia in October. “It truly was the low interest rates. I was like, ‘Now is the time,’” she said. She and her boyfriend had been living in a two-bedroom apartment, and they wanted to move out of their busy multifamily building during the pandemic, she said.
There were 1.42 million homes for sale at the end of October, down 2.7% from September and down 19.8% from October 2019, according to NAR. At the current sales pace, there was a 2.5-month supply of homes on the market at the end of October, a record low.
The supply shortage could worsen in the coming months as the number of newly reported Covid-19 cases rises because some would-be sellers are unwilling to put homes on the market, said Doug Duncan, chief economist at Fannie Mae. Many potential home sellers are older, he said. “It might be the time of their life they would like to downsize, but they’re not going to downsize at a risk to their health,” he said.
U.S. Existing-Home Sales Decline For First Time In Six Months
Sales of previously owned U.S. homes fell in November for the first time in six months, suggesting that surging prices and a record-low supply are constraining red-hot demand.
Contract closings decreased 2.5% from the prior month’s almost 15-year high to an annualized 6.69 million rate, according to National Association of Realtors data released Tuesday. That was up 25.8% from a year earlier and compared with economists’ forecasts for 6.7 million.
The median selling price jumped 14.6% from a year earlier on an unadjusted basis to $310,800, the fourth straight month of double-digit increases.
The decline signals that strong demand is running up against constraints, with few available properties and weaker affordability likely keeping some buyers out of the market. Still, home sales remain brisk, well above pre-pandemic levels and near the highest since 2005, with demand skewed toward more-expensive houses.
The new fiscal stimulus package, approved by Congress on Monday, could prop up household incomes and keep the purchasing spree going into the first quarter of next year.
“Housing affordability, which had greatly benefitted from falling mortgage rates, are now being challenged due to record-high home prices,” Lawrence Yun, NAR’s chief economist, said in a statement. “That could place strain on some potential consumers, particularly first-time buyers.”
Several data points illustrated how historically tight the market is.
Available inventory declined 22% from a year earlier to 1.28 million units, the lowest in data back to 1982, the NAR said. Properties remained on the market for 21 days in November, unchanged from the prior month and matching a record low. It would take 2.3 months to sell all the homes on the market at the current pace, the lowest on record.
The NAR’s report showed purchases of existing homes fell in three of four regions; they were unchanged in the West.
Existing home sales account for about 90% of U.S. housing and are calculated when a contract closes. A separate report last week showed strength in new home construction, which increased to a nine-month high.
U.S. Home Sales Edged Higher In January Amid Tight Inventory
Lack of homes for sale help push prices up 14.1% from a year earlier.
Sales of previously owned homes rose in January, as the market stayed hot during the usually slower winter period and a shortage of homes for sale kept pushing home prices higher.
Existing-home sales rose 0.6% in January from December to a seasonally adjusted annual rate of 6.69 million, the National Association of Realtors said Friday. The January sales marked a 23.7% increase from a year earlier.
Economists surveyed by The Wall Street Journal expected a 2.4% monthly decline in sales of previously owned homes, which make up most of the housing market.
Home sales surged in 2020 to the highest level since 2006, as historically-low interest rates spurred demand and buyers looked for more space. While winter is usually a slower period for home sales, economists say the pandemic disrupted the normal seasonal patterns by pushing home purchases that would have occurred last spring and summer to the fall and winter.
“The housing market continues to remain very strong,” said Lawrence Yun, NAR’s chief economist. “Sales could be even higher, but the inventory is simply not there.”
House prices have climbed rapidly in recent months as buyers competed for a limited number of homes on the market. The median existing-home price rose 14.1% in January from a year earlier to $303,900, NAR said.
Heidi Finkelstein and Matthew Sherman bought a four-bedroom home in Plantation, Fla., in January. The new home has more outdoor space than their current house in the same city, and “it made sense for us to do this because the mortgage rates are so low,” said Dr. Finkelstein, a dentist.
They are renovating the new house and plan to sell their current home in the summer. “I don’t see the market in our neighborhood going down anytime soon,” as people continue to move to Florida from other states, Dr. Finkelstein said.
Existing-home sales rose the most month-over-month in the South, at 3.2%, and in the Midwest, at 1.9%. January sales were down from December in the Northeast and the West.
Home sales were especially strong at the high end of the market, with the number of sales of homes priced at over $1 million up 77% in January compared with a year earlier, according to NAR.
Homes typically go under contract a month or two before the contract closes, so the January figures largely reflect purchase decisions made in December or November.
Homes for sale frequently receive multiple offers and sell quickly, real-estate agents say. There were 1.04 million homes for sale at the end of January, the lowest on records back to 1982. The level was down 1.9% from December and down 26% from January 2020, according to NAR. At the current sales pace, there was a 1.9-month supply of homes on the market at the end of January.
Demand is also strong for newly built homes, and many home builders are intentionally limiting sales in some communities due to constraints of materials, labor or land. In some metro areas, buyers are signing up for wait lists or even camping out to buy new homes as they become available, said Ali Wolf, chief economist at Zonda, a housing-market research firm.
“The question today is not how many homes can you sell, it’s how many homes can you build,” she said.
A measure of U.S. home-builder confidence rose in February after two months of declines, the National Association of Home Builders said this week. Housing starts, a measure of U.S. home-building, fell 6% in January from December, the Commerce Department said Thursday. Residential permits, which can be a bellwether for future home construction, rose 10.4%.
News Corp, owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.
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