Pending home sales at a 10-year high

May 27, 2016

WASHINGTON – May 26, 2016 – Pending home sales rose for the third consecutive month in April and reached their highest level in over a decade, according to the National Association of Realtors® (NAR).

All major regions saw gains in contract activity last month except for the Midwest, which saw a meager decline.

The Pending Home Sales Index – a forward-looking indicator based on contract signings for homes that have not yet sold – hiked 5.1 percent higher to 116.3 in April from an upwardly revised 110.7 in March. Year-to-year, it’s 4.6 percent above April 2015 (111.2).

After last month’s gain, the index has now increased year-over-year for 20 consecutive months. Vast gains in the South and West propelled April’s pending sales in April to its highest level since February 2006 (117.4), says Lawrence Yun, NAR chief economist.

“The ability to sign a contract on a home is slightly exceeding expectations this spring, even with the affordability stresses and inventory squeezes affecting buyers in a number of markets,” Yun says. “The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market.”

Mortgage rates have remained below 4 percent in 16 of the past 17 months, but Yun says it remains to be seen how long they will stay this low. Along with rent growth, rising gas prices – and the fading effects of last year’s cheap oil on consumer prices – could edge up inflation and push rates higher. For now, Yun foresees mortgage rates continuing to hover around 4 percent in coming months, but inflation could potentially surprise the market and cause rates to increase suddenly.

“Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search,” adds. Yun.

Following the housing market’s best first quarter of existing-sales since 2007 (5.66 million) and a decent increase (1.7 percent) in April, Yun expects sales this year to climb above earlier estimates and be around 5.41 million – a 3.0 percent boost from 2015. After accelerating to 6.8 percent a year ago, national median existing-home price growth is forecast to slightly moderate to between 4 and 5 percent.

Pending sales in the Northeast climbed 1.2 percent to 98.2 in April, and are now 10.1 percent above a year ago. In the Midwest, the index declined slightly (0.6 percent) to 112.9 in April, but it’s still 2.0 percent above April 2015.

Pending home sales in the South jumped 6.8 percent to an index of 133.9 in April – 5.1 percent higher than last April. The index in the West soared 11.4 percent in April to 106.2, and it’s now 2.8 percent above a year ago.

© 2016 Florida Realtors®


Pending Home Sales Tick Up in December

February 19, 2016

WASHINGTON (January 28, 2016) — Pending home sales were mostly unchanged in December, but inched forward slightly, fueled by a large increase in the Northeast that outpaced declines in the other three major regions, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, crawled 0.1 percent to 106.8 in December from a downwardly revised 106.7 in November and is now 4.2 percent above December 2014 (102.5). The index has increased year-over-year for 16 consecutive months.

Lawrence Yun, NAR chief economist, says contract activity closed out the year on stable footing but lost some momentum, except for in the Northeast. “Warmer than average weather and more favorable inventory conditions compared to other parts of the country encouraged more households in the Northeast to make the decision to buy last month,” he said. “Overall, while sustained job creation is spurring more activity compared to a year ago, the ability to find available homes in affordable price ranges is difficult for buyers in many job creating areas. With homebuilding still grossly inadequate, steady price appreciation and tight supply conditions aren’t going away any time soon.”

According to Yun, although healthy labor market conditions will persuade more households to buy, it’s possible overall demand could be somewhat curtailed in coming months. The stock market’s sizeable losses since the start of the year and the effect slowing manufacturing activity is having in some areas — especially in the energy sector — could cause some to hold off on buying.

“The silver lining from the market turmoil in recent weeks is the fact that mortgage rates have slightly declined,” says Yun. “Buyers looking to close on a home before the spring buying season begins may be rewarded with a mortgage rate at or below 4 percent.”

Existing-homes sales this year are forecast to be around 5.34 million, an increase of 1.5 percent from 2015. The national median existing-home price for all of this year is expected to increase between 4 and 5 percent. In 2015, existing-home sales increased 6.5 percent and prices rose 6.8 percent.

Rents — which have far outpaced wages in recent years — are expected to slightly slow to 3.3 percent growth in 2016 from 3.6 percent a year ago. Multifamily housing starts are expected to reach 420,000 units this year, the highest level since 1987.

The PHSI in the Northeast increased 6.1 percent to 97.8 in December, and is now 15.3 percent above a year ago. In the Midwest the index decreased 1.1 percent to 103.6 in December, but is still 3.6 percent above December 2014.

Pending home sales in the South declined 0.5 percent to an index of 119.3 in December but are 1.0 percent higher than last December. The index in the West decreased 2.1 percent in December to 97.5, but remains 3.4 percent above a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

NOTE: Fourth quarter of 2015 metropolitan area home prices will be released February 10, Existing-Home Sales for January will be reported February 23, and the next Pending Home Sales Index will be February 29; release times are 10:00 a.m. ET.


Forbes lists top investment cities – 7 are in Fla.

February 5, 2016

NEW YORK – Feb. 3, 2016 – Where should real estate investors put their money in 2016? Forbes teamed up with North Carolina-based data company Local Market Monitor to produce its list of 2016 Best Buy Cities – the top 20 housing markets to invest in this year – and Florida dominates the list.

According to Forbes, Florida offers good values “where investors get the best bang for their housing buck, and where aspiring homeowners have the best prospects of making an economically sound purchase.”

Orlando took second place and was followed by six other Sunshine State cities. Among them, average home prices are highest in West Palm Beach (No. 19) at $285,000 and lowest in Tampa (No. 14) at $193,000. The averages, though, have been accelerating at a rate of 9 percent to 14 percent in all the Florida cities.

Florida’s domination of the list makes a lot of sense in light of the national economic recovery, says Ingo Winzer, founder and president of Local Market Monitor. “Since the national economy has stabilized and is growing again, the factors that prompt people to go to Florida have recovered,” he reasons.

“Best-buy” markets for 2016 housing

1. Grand Rapids

2. Orlando, Florida

3. San Antonio, Texas

4. Charlotte, North Carolina

5. Salt Lake City

6. Dallas

7. Austin, Texas

8. Fort Lauderdale, Florida

9. Seattle

10. Cape Coral, Florida

11. Indianapolis

12. North Port, Florida

13. Nashville, Tennessee

14. Tampa, Florida

15. Charleston, South Carolina

16. Denver, Colorado

17. Madison, Wisconsin

18. Jacksonville, Florida

19. West Palm Beach, Florida

20. Boise, Idaho

Forbes’ full list is also posted online.

Source: Forbes (01/27/16) Carlyle, Erin

© Copyright 2016 INFORMATION, INC. Bethesda, MD


Mortgage rates defy predictions: A good time to buy?

January 14, 2016

WASHINGTON – Jan. 13, 2016 – When the Federal Reserve raised interest rates in December, people who had been flirting with buying a home worried they might have waited too long.

But worries about rising mortgage rates have been unwarranted. Since the Fed’s rate increase, rates on 30-year mortgages have dropped below 4 percent, and many mortgage experts expect them to stay below 4.25 percent this year.

The recent drop in rates “surprised a lot of people,” said James Bianco, president of Bianco Research. “People expected rates to be up, not down” after the Federal Reserve raised the federal funds rate. Instead, economic data on a slowing global economy has crimped expectations on the U.S. economy and interest rates.

“Nobody thinks inflation is a risk,” and rising inflation would prompt interest rates, like mortgages, to rise, Bianco said. Instead, the growing view is that instead of responding to a surge in the economy, the Federal Reserve was simply tweaking rates upward because they’d been ultra-low since the 2008 recession, Bianco said.

“I think the Fed wants to get out of the market manipulation game,” he said.

While that takes the pressure off potential homebuyers to make a quick move, PNC Bank economist Stuart Hoffman said people with adjustable-rate mortgages might find it worthwhile to convert to fixed-rate mortgages if their existing mortgages will start getting adjustments this year. A May adjustment could be up a half or three-quarters of a percent, he said.

Copyright © 2016 the Chicago Tribune, Gail Marks Jarvis. Distributed by Tribune Content Agency, LLC


Fast Internet Access Drives Up Home Values

July 11, 2015

Did you know?

More home buyers are choosing where to live based on the availability of high-speed networks.

A nationwide study released recently by researchers at the University of Colorado and Carnegie Mellon University finds fiber-optic connections, the fastest type of high-speed interned available, can add $5,437 to the price of a $175,000 home.