Archive for 'Existing Home Sales'
Existing Home Supply Down 40% In Last 6 Months
February 24th, 2011. Published under Existing Home Sales. No Comments.
Home resales rose another 2.7 percent last month, according to the National Association of REALTORS® monthly Existing Home Sales report.
An “existing home” is a home that’s been previously occupied and is not considered new construction.
The number of existing homes sold on a rolling 12-month basis is now at its highest point since May 2010, the month before the federal homebuyer tax credit ended. It’s also up some 40% since July 2010, the month after the tax credit ended.
But that’s not the biggest story in the Existing Home Sales report. The precipitous decline in home inventory deserves more attention.
At the current pace of sales, the complete, national home resale inventory will be sold in 7.6 months. This is close to 5 months faster as compared to last year’s peak, and well below the 2-year home supply average of 9.0 months. There more buyers in the market, it seems, and fewer homes from which they can choose.
Total home resale inventory is down to just 3.38 million homes nationwide — the fewest in 12 months.
There were other interesting statistics in the official Existing Home Sales report, including a break-down of purchases by buyer-type.
- First-time buyers accounted for 29% of purchases, down from 33% in January
- Repeat homebuyers accounted for 48% of purchases, up from 47% in January
- Investors accounted for 23% of of purchases, up from 20% in January
In addition, distressed sales — foreclosures and short sales — made up 37 percent of the market.
Over the next few days, more housing data will hit the wires and it’s expected to show similar strength to January’s Existing Home Sales report. With falling supplies and a growing base of move-up buyers, home prices are expected to rise in the coming months ahead.
Home Supplies Plummet, Putting Pressure On Prices To Rise
January 21st, 2011. Published under Existing Home Sales. No Comments.
Existing Home Sales surged 12 percent last month, closing 2010′s housing market with strength. An “existing home” is a home that cannot be categorized as new construction; a resale.
According to the National Association of REALTORS®, seasonally-adjusted, annualized Existing Home Sales figures climbed by more than a half-million units in December as compared to November. It’s the 3rd straight month of home resale improvement nationwide.
Sales volume is now as high as it’s been since May 2010 — just after the federal home buyer tax credit’s expiration.
In addition, the number of months needed to sell the complete, current home inventory at the current pace of sales fell by 1.4 months, tying December for the biggest one-month home supply improvement in 2 years.
It’s yet another signal that the housing market is in recovery. Not that this data should surprise anyone. November’s Pending Home Sales report told us to expect it two weeks ago.
Broken down by buyer-type, home sales split as follows:
- First-time home buyers : 33% of all sales
- Repeat buyers : 47% of all sales
- Real estate investors : 20% of all sales
Cash buyers represented 29 percent of all transaction, down 2 ticks from November. This may suggest that mortgage guidelines are loosening — another sign of economic improvement.
So, take note, home buyers. This spring, along with mortgage rates, home values should rise, too. Expect less “bang for your buck” as the housing recovery takes hold across the nation.
The best deals of the year may be the ones made this month.
Home Inventory Dwindles Into The New Year
December 23rd, 2010. Published under Existing Home Sales. 1 Comment.
Existing Home Sales jumped another 6 percent in November, the report’s third month of improvement since bottoming in July.
According to the National Association of REALTORS®, a quarter-million more existing homes were sold during the annual period ending in November as compared to October. An “existing home” is a home that cannot be considered new construction.
Additionally, the national housing supply dropped by a full month. At the current pace of existing home sales, the complete stock of homes for sale will be exhausted in 9.5 months.
November’s strong housing data is yet another signal to buyers that the housing market’s foundation has been rebuilt, and that a rebound is imminent. It’s helped that there are great “deals” on which for buyers to pounce.
In November, short sales and foreclosures accounted for one-third of all existing homes sold, and carried an average price discount of 10 percent and 15 percent, respectively, as compared to non-distressed sales.
Repeat buyers continue to power the market, too, representing more than half of all home buyers.
- First-time buyers : 32% of all buyers
- Investors : 19% of all buyers
- Repeat buyers : 51% of all buyers
This breakdown suggests that housing has regained its footing. First-time buyers can’t support a market long-term like repeat buyers can and, as compared to 12 months ago, the percentage of repeat buyers is now up 14 points.
Home buyers take note. Raw sales volume is rising and available inventory is dropping. Basic supply-and-demand tells us that this will lead home prices higher. Furthermore, mortgage rates are rising quickly, increasing the cost of homeownership.
If buying a home is a part of your plan for 2011, consider accelerating your purchase time frame. Existing homes account for more than 80% of homes sold nationwide. If the market keeps improving like this, your home affordability will worsen.
Existing Home Sales Plummet In July; Home Buyers Gain Leverage
August 25th, 2010. Published under Existing Home Sales. No Comments.
The number of home resales plunged by 1.4 million units in July, according to the National Association of Realtors®’ Existing Home Sales report.
It’s a drop of 27 percent from June; single-family home resales are at the report’s lowest levels since May 1999.
Furthermore, because of the sharp drop in sales volume, home inventories are spiking.
Homes for sale nationwide fell just short of 4 million units in July and, at the current sales paces, it would take 12.5 months for the existing inventory to be absorbed.
Home supply was just 8.9 months in June.
For home sellers , the Existing Home Sales report is a bit of bad news. Fewer sales and larger inventories put negotiation leverage in the hands of the buyers which, in turn, creates downward pressure on home prices. It may also increase time-on-market.
For home buyers, however, the data is decidedly welcome. After a stimulus-driven spring buying season that favored sellers, the summer and early-fall market seem to favor buyers. More choices and more leverage is a positive.
It helps that home affordability is up, too.
Although there’s reports that home values are rising, their modest gains are more than countered by the ongoing rally in mortgage rates. Freddie Mac says that 30-year fixed rate mortgage rates are at their lowest levels in history and, at today’s rates, every one-eighth drop in mortgage rates roughly offsets a 1.5% increase to home price.
Mortgage rates are down 0.75 percent since mid-April.
Existing Home Sales Drop In June But Hint At Higher Price Tier Support
July 23rd, 2010. Published under Existing Home Sales. No Comments.
Consistent with most post-home buyer tax credit housing news, the National Association of Realtors® says Existing Home Sales eased lower last month.
An “existing home” is a home that cannot be considered new construction.
The 5 percent drop in sales from May to June was expected, but a closer look at the month’s data reveals some interesting trends.
First, repeat buyers accounted for 44 percent of home resales in June, up from 40 percent in May. That’s a healthy increase for just 4 weeks’ time and the tax credit is a likely catalyst. First-timer buyers bought starter homes owned by former first-timers, who were then free to “move up” to larger, more expensive property.
Housing markets can be trickle-up and, not coincidentally, the jumbo/luxury housing market is now in the midst of rebound.
Second, June’s “distressed sales” accounted for 32 percent of all home resales, up from 31 percent in May.
A figure like this hints at the large role foreclosures continue to play in a home buyer’s home search strategy. And why not? The National Association of Realtors® suggests that distressed homes are sold at a 15 percent discount.
Lastly, take note that home inventories are rising. June’s 8.9 months of supply is the highest in 10 months. Excess supply leads home prices lower, all things equal.
Overall, the Existing Home Sales data from June is a mixed bag. There’s support for the middle- and upper-price tiers, but a growing overhang of supply. The market looks favorable for buyers given low mortgage rates and strong negotiation leverage.
May 2010 Existing Home Sales Is Better Than The Headline Data Suggests
June 23rd, 2010. Published under Existing Home Sales. No Comments.
Existing Home Sales dropped in May for the first time in 3 months but still managed to post its second-highest since November 2009, buoyed by the expiring federal tax credit program.
An “existing home” is a home that cannot be considered new construction; a resale of an existing home. Existing Home Sales fell 2.2 percent in May.
The press is calling the drop in sales “unexpected” and disappointing, but a deeper look at the data shows the news isn’t as bad as it first appears.
First, on a regional basis, sales were mostly solid. Only the Northeast region posted a loss. The West even managed a gain.
- Northeast : -18.3 percent
- Midwest : 0.0 percent
- South : +0.5 percent
- West : +4.9 percent
Second, the supply of homes for sale dropped to 8.3 in May and, because home prices are based on supply and demand, this is a positive for pricing.
By comparison, in 2008, the average existing home inventory was 10.4 months.
And, lastly, in May, first-time home buyers represented 46 percent of all buyers. The number was likely buoyed by the tax credit program but that doesn’t damper the fact that first-time buyers provide a support floor for the housing market.
First-time buyers enable “existing owners” to move-up to bigger homes, which, in turn, trickles up to the mid-size and jumbo markets.
Analysts expected more from May’s numbers and that may explain why the reaction to the data is generally negative. However, in many cities, home resales did just fine.
