Pending home sales rebounded 3.5 percent in October but still down 0.6 percent year-on-year

Pending home sales rebounded 3.5 percent in October following three straight months of diminishing activity, but were still down 0.6 percent year-on-year. All major regions except for the West saw an increase in contract signings last month.

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October existing home sales rise 2.0 percent but still down 0.9 percent year-on-year

Existing-home sales increased in October by 2.0 percent to their strongest pace since earlier this summer, but continual supply shortages led to fewer closings on an annual basis for the second straight month.  After last month's increase, sales are at their strongest pace since June (5.51 million), but still remain 0.9 percent below a year ago.

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August existing home sales dipped 1.7 percent from July, up 0.2 percent year-on-year

Existing-home sales stumbled in August for the fourth time in five months as strained supply levels continue to subdue overall according to the National Association of Realtors®. Sales gains in the Northeast and Midwest were outpaced by declines in the South and West.

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Pending Home Sales Index fell again in July as inventory remained tight

The Pending Home Sales Index decreased 0.8 percent to 109.1 in July. After last month's decline, the index is now 1.3 percent below a year ago and has fallen on an annual basis in three of the past four months.

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July existing home sales slipped 1.3 percent to lowest rate of year as prices rose 6.2 percent year-on-year

Total existing-home sales slipped 1.3 percent to a seasonally adjusted annual rate of 5.44 million in July. July's sales pace is still 2.1 percent above a year ago, but is the lowest of 2017. The median existing-home price for all housing types in July was $258,300, up 6.2 percent from July 2016 ($243,200). July's price increase marks the 65th straight month of year-over-year gains.

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June existing home sales drop 1.8 percent, largely due to lack of supply

Total existing-home sales decreased 1.8 percent to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month's decline, June's sales pace is 0.7 percent above a year ago, but is the second lowest of 2017.

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April pending home sales index posts first year-over-year decline since December

The Pending Home Sales Index decreased 1.3 percent to 109.8 in April from a downwardly revised 111.3 in March. After last month's decline, the index is now 3.3 percent below a year ago, which is the first year-over-year decline since last December and the largest since June 2014 (7.1 percent).

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Pending home sales inched up 0.2 percent in June; up 1.0 percent year-on-year

Pending home sales were mostly unmoved in June, but did creep slightly higher as supply and affordability constraints prevented a bigger boost in activity from mortgage rates that lingered near all-time lows through most of the month,

The Pending Home Sales Index inched 0.2 percent to 111.0 in June from 110.8 in May and is now 1.0 percent higher than June 2015 (109.9). With last month's minor improvement, the index is now at its second highest reading over the past 12 months, but is noticeably down from this year's peak level in April (115.0).

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Pending home sales rose for third straight month in April, reaching highest level in over a decade

Pending home sales rose for the third consecutive month in April and reached their highest level in over a decade.  All major regions saw gains in contract activity last month except for the Midwest, which saw a meager decline.

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Generational Shifts in Home Buying: A 2015 NAR Report Reveals Interesting Insights

Recently, the National Association of Realtors® released their 2015 Home Buyer and Seller Generational Trends report, which analyses the differences between recent home buyers and sellers of various age groups. The report is chock full of interesting insights, such as the continued importance of partnering up with a real estate agent for younger buyers even after having done considerable research online.

Moreover, as the housing market continues to emerge from the Great Recession, one trend has been made abundantly clear:  Despite the considerable headwinds facing Generation Y as they came of age often saddled with student debts, car loans, stagnant wages and tighter mortgage standards, they have continued to persevere, and in 2015 accounted for the nearly one-third of home buyers.

At the same time, Baby Boomers accounted for almost as many sales (split among 16 percent younger Boomers and 15 percent older Boomers), while Generation Xers followed behind at 27 percent.  The Silent Generation accounted for just 10 percent of recent sales activity.

Lawrence Yun, NAR’s chief economist, believes that the survey once again underscores the still-untapped demand for owning homes among young adults, reporting that over 80 percent of both Gen X and Gen Y buyers view their home purchase as solid investment.  As opposed to renting in today’s market -- in which tenants can expect to see annual increases of three to five percent -- they’re counting on the predictable, fixed payments made available by a traditional mortgage.

Of course selling to these different generations also requires a more customized approach than we might have seen in years past, in which the same traditional sales office, model home complex, well-crafted brochure and robust Web site could market just as effectively to distinct age groups.

For example, although 65 percent of married couples buy today’s homes (with another 8 percent of unmarried couples making the plunge), single women are almost as twice as likely to buy a home than their male counterparts.  However, given that 65 percent of all buyers do not have children, forcing them to choose among resale homes in suburbs originally designed mostly for families can often be a marketing challenge.

In addition, the rising importance of multi-generational homes -- accounting for 13 percent of recent sales -- has seemingly risen in lockstep with a higher share of foreign-born buyers, especially to middle-aged heads of households born in the 1970s.  However, given that 70 percent of buyers continue to choose suburban locations, it seems that many want to leave their options open, whether that means future children, a grown child moving back into the home, or aging parents and in-laws who may need additional supervision from family members.

Today’s buyers also rely much more on the Internet to conduct their own research, ranging from about one-third for older buyers to just over half for those under age 35.  What this means is that by the time a potential buyer visits an open house or a model complex, they’re probably not looking for information they already know -- they’re seeing if the photos and marketing verbiage matches the reality of seeing it in person, as well as how knowledgeable and trustworthy the sales agent seems.

Moreover, given that more than half of both Generation X and Y buyers started their home search on smartphone devices (with about 25 percent ultimately finding that new home in the same way), it is critical for builders and agents to optimize their Web sites for mobile users.

For younger buyers under age 35, they bring their own unique wish list, such as a premium on convenience to their jobs, a desire to avoid renovation headaches (which bodes well for newer homes if they can afford it) and a need for low down payments.   Yet because of that affordability issue, it’s often those same younger buyers opting more for older homes out of necessity.

For older buyers such as Baby Boomers, when they move it’s often to a smaller home, even if they’re not ready for retirement, and if they’re looking for a freer lifestyle with less home maintenance, new homes with community amenities continue to be quite popular, especially if they plan to stay there for 15 to 20 years.

Finally -- and not surprisingly -- the older the buyer, the less they’re willing to compromise in terms of price, size and condition of the home.  And who can blame them?  After a lifetime of catering to family needs and wants, a low-maintenance home with a view seems like a pretty nice reward for a life well lived.

Existing home sales and prices rise in October

According to the NAR, existing home sales rose by 2.1% from September to October as prices rose for an eighth consecutive month to $178,600 (up 11.1% from a year ago).  From the press release:

Sales of existing homes increased in October, even with some regional impact from Hurricane Sandy, while home prices continued to rise due to lower levels of inventory supply, according to the National Association of Realtors®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 2.1 percent to a seasonally adjusted annual rate of 4.79 million in October from a downwardly revised 4.69 million in September, and are 10.9 percent above the 4.32 million-unit level in October 2011.

The national median existing-home price for all housing types was $178,600 in October, which is 11.1 percent above a year ago. This marks eight consecutive monthly year-over-year increases, which last occurred from October 2005 to May 2006.

Distressed homes - foreclosures and short sales sold at deep discounts - accounted for 24 percent of October sales (12 percent were foreclosures and 12 percent were short sales), unchanged from September; they were 28 percent in October 2011. Foreclosures sold for an average discount of 20 percent below market value in October, while short sales were discounted 14 percent.

Total housing inventory at the end of October fell 1.4 percent to 2.14 million existing homes available for sale, which represents a 5.4-month supply 4 at the current sales pace, down from 5.6 months in September, and is the lowest housing supply since February of 2006 when it was 5.2 months. Listed inventory is 21.9 percent below a year ago when there was a 7.6-month supply.

You can read the entire release here.

BuilderBytes' MetroIntelligence Economic Update for 1/23/12

Please click here to see the edition of BuilderBytes for 1/23/12 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

• Existing home sales in December show uptrend
  

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NAR revises home sales estimates for 2007 through 2010

As if the National Association of Realtors didn't need another question about its data collecting competence, it has recently admitted that it has seriously undercounted home sales for 2007 through 2010, which means the housing downturn was even worse than expected. From a story in the L.A. Times:

The National Assn. of Realtors has revised sharply downward the number of homes it calculated were sold from 2007 to 2010, revealing a much weaker housing market than it had estimated.

For 2010 alone, the trade group revised its estimate of home sales 14.6% lower than what it had previously reported — to about 4.2 million homes.Overall, sales and inventory reported by the group were reduced by 14.3% for 2007 through 2010, the association said Wednesday. The group gave several reasons for the revisions, including some sales that had been counted multiple times. Roughly half the revisions, the group said, resulted from a decrease in people selling their own homes; these people turned to real estate agents to sell those properties for them as the housing market turned bleak in 2007.

Homes sold by owners are typically not counted by the local listing services tracked by the national real estate group, Lawrence Yun, chief economist for the group, said in a statement...

The revisions underscored a lack of data on the housing market. There is no government tally of home sales nationally. Instead, officials rely on private real estate groups to provide sales numbers. The government does publish an estimate of new-home sales and starts...

Realtors suggest how to fix housing market

Realtors have an idea that they think will jump-start the ailing housing market. No, it's not a new multi-media campaign with the tag line "Now's a great time to buy a home." It's for the federal government to purchase loan points for new borrowers so interest rates would be 1% lower, thereby propping up housing values. Of course there are also detractors. From a Time magazine story (hat tip: Brian McDonald):

The National Association of Realtors is lobbying for the government to artificially lower mortgage rates by purchasing loan points for homebuyers. They say the program would cost $100 billion, and could raise home prices by as much as 4% nationwide. Anyone buying a house for primary residence would be eligible for the mortgage-rate buydown, which would lower a purchaser's loan rate by 1% for the life of the loan. They say the incentive should be made available for the next 12 months...

But some housing market economists question the wisdom of the move. They say helping people who may buy houses in the future is not where the government should be providing assistance.

Click here for full story.