Feb. pending home sales up 3.5%

March 29, 2016

WASHINGTON – March 28, 2016 – Pending home sales rose solidly in February to its highest level in seven months, according to the National Association of Realtors® (NAR). Led by a sizeable increase in the Midwest, all major regions except for the Northeast saw an increase in February contract activity.

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 3.5 percent to 109.1 in February from a downwardly revised 105.4 in January and it’s 0.7 percent higher year-to-year. The index has now increased year-over-year for 18 consecutive months, though last month’s annual gain was the smallest.

“After some volatility this winter, the latest data is encouraging in that a decent number of buyers signed contracts last month, lured by mortgage rates dipping to their lowest levels in nearly a year and a modest, seasonal uptick in inventory,” says Lawrence Yun, NAR chief economist.

“Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers,” Yun adds. “Without adequate supply, sales will likely plateau.”

According to Yun, last month’s noticeable slump in existing-home sales had one silver lining: Price appreciation lessened to 4.4 percent, which is still above wage growth but more favorable than the 8.1 percent annual increase in January.

“Any further moderation in prices would be a welcome development this spring, particularly in the West, where it appears a segment of would-be buyers are becoming wary of high asking prices and stiff competition,” adds Yun.

Existing-homes sales this year are forecast to be around 5.38 million, an increase of 2.4 percent from 2015. The national median existing-home price for all 2016 is expected to increase between 4 and 5 percent. In 2015, existing-home sales increased 6.3 percent and prices rose 6.8 percent.

The PHSI in the Northeast declined 0.2 percent to 94.0 in February, but it’s still 12.6 percent above a year ago. In the Midwest, the index shot up 11.4 percent to 112.6 in February, and it’s now 2.5 percent above February 2015.

Pending home sales in the South increased 2.1 percent to an index of 122.4 in February but it’s 0.4 percent lower than last February. The index in the West climbed 0.7 percent in February to 96.4, but it’s now 6.2 percent below a year ago.

© 2016 Florida Realtors®


The annual hot home buying season starts April 1

March 16, 2016

TAMPA, Fla. – March 14, 2016 – Sellers, start your pressure washers. Buyers, hold off on purchasing new furniture for your future abode.

April 1 marks the beginning of sellers’ season for residential real estate, a four-month span during which more than 37 percent of homes for sale in the Tampa Bay region will get new owners.

Right now, it’s a sellers’ market, but that doesn’t mean those putting their homes on the market don’t have to spruce up and make repairs before sticking that sign out front.

“You have buyers coming out of the woodwork after the winter and looking to purchase,” said Daren Blomquist, chief economist for real estate research firm RealtyTrac. And a lot more houses will go on to the market, so there will be competition.

“Homes tend to sell faster in the spring because of the demand,” Blomquist said. Once school starts winding down, people are ready to look for their new locations.

“The first thing sellers need to do is look at their house with a critical eye,” said Barbara Jordan, immediate past president of the Greater Tampa Association of Realtors. “They really need to look at curb appeal, number one. Pressure wash the driveway, make it bright, get rid of the mold from last summer’s humidity and rain.”

Weed out the flower beds and throw down some new mulch, Jordan said. And pressure wash the front door – first impressions matter.

It is also really important to make sure all major systems in the house are functioning, including electrical, plumbing and air conditioning.

“If you have been living with leaking fixtures for months, fix them,” Jordan said.

A roof can be a real show-stopper, she said. “In order to get insurance, a roof must have three years of life left on it. The typical lifetime for a roof is 15 to 17 years. If you are coming up on 12 years, you need to take a critical look at it.”

Realtor.com suggests all homeowners do their own walk-throughs. Look for leaks under sinks and around toilets, water stains on ceilings or near doors and windows, wood rot around outside doorframes or window ledges.

Cracks in walls and floors or doors that don’t shut correctly can be red flags to buyers, Realtor.com warns. Inspect for these things inside and outside the house.

In between all that, get rid of the clutter, Jordan said. “Too much stuff and boxes in corners need to go.

Patio areas, especially in Florida, can sell homes, she said. “Make sure the patio is pressure washed, get rid of the weeds between the pavers and put out some flowers.”

And here’s a critical tip, she said. Get wide-angle professional photos of the house that can be posted on the Internet. That’s where buyers will first find a house they are interested in purchasing.


Average rate on 30-year mortgage falls to 3.62%

February 26, 2016

WASHINGTON (AP) – Feb. 25, 2016 – Average long-term U.S. mortgage rates fell this week as anxiety over the global economy persisted. Long-term rates resumed their decline after being unchanged last week following six straight weeks of easing.

Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year, fixed-rate mortgage slipped to 3.62 percent from 3.65 percent last week. That puts it well below the 3.80 percent it marked a year ago.

The average rate on 15-year fixed-rate mortgages declined to 2.93 percent from 2.95 percent last week.


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.