Kelli Grant Group

Berkshire Hathaway HomeServices AZ

Existing Home Sales Leap To 2-Year High

Existing Home Sales By Price Tier, August 2012

The home resale market put forth another strong data set last week. Home sales prices are higher nationwide and sales volume has moved to a 2-year high.

According to the National Association of REALTORS®, 4.82 million “existing homes” sold on a seasonally-adjusted, annualized basis in August, representing a near 8 percent improvement from the month prior and a nine percent jump from August 2011.

An existing home is a home which has been previously occupied.

Home sales were unevenly split across price tiers, with more than half of all homes selling for less than $250,000. This suggests that the first-time home buyers and real estate investors continue to be active in today’s market as a foundation for growth is built.

According to the Existing Home Sales data :

  • First-time buyers accounted for 31% of all home sales
  • Real estate investors accounted for 18% of all home sales
  • Other, repeat buyers accounted for 51% of all home sales

Also noteworthy is that “distressed homes” accounted for the smallest percentage of overall home sales since the real estate trade group starting tracking such data.

In August, homes in various stages of foreclosures accounted for 12% of all sales and sold at an average discount of 19 percent below market value. Short sale homes accounted for 10% of all sales and sold at an average discount of 13 percent below market value.

Of all the data in the August Existing Home Sales report, though, perhaps most relevant to today’s buyers is the shrinking national housing supply.

At August’s end, there were 2.47 million homes listed for sale nationwide, a three percent increase from the month prior. However, because the pool of available home buyers is increasing more rapidly than the number of homes for sale, housing supplies fell 0.3 months to 6.1 months.

This means that at the current pace of sales, the entire housing supply would be sold by March 2013.

For today’s home buyers, home affordability appears poised to worsen. Mortgage rates and home prices remain low today, but market conditions like these rarely last long. Talk to your real estate agent about what options you have ahead of you. 2012 is coming to a close.

By 2013, the housing recovery may be fully underway. 

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September 25, 2012 Posted by | Housing Analysis | , , | Leave a comment

What’s Ahead For Mortgage Rates This Week : September 17, 2012

Fed Funds Rate 2006-2012Mortgage markets improved last week as the Federal Reserve introduced new economic stimulus. The move trumped bond-harming action from the Eurozone, and a series better-than-expected U.S. economic data.

The 30-year fixed rate mortgage rate dropped last week for most loan types, including for conforming, FHA and VA loans. 15-year fixed rate mortgage rates improved, as well.

Mortgage rates are back near their lowest levels of all-time.

Last week’s main event was the Federal Open Market Committee’s sixth scheduled meeting of 2012. Wall Street expected the Fed to launch a third round of quantitative easing (QE3) after its meeting and the nation’s central banker did not disappoint.

It launched QE3 and did so with such scale that even Wall Street was shocked.

The Federal Reserve announced a plan to purchase $40 billion monthly of mortgage-backed bonds indefinitely, a move aimed at lowering U.S. mortgage rates in order to stimulate the housing market which can create more jobs in construction and other related industries.

The Fed will continue to buy mortgage bonds until it deems such purchases no longer necessary. The Fed also announced a commitment to holding the Fed Funds Rate in its current target range of 0.000-0.250% until mid-2015, at least.

Mortgage rates responded favorably to the stimulus, falling to their lowest levels of the week. It masked a rise in rates from earlier in the week tied to the German court’s clearing of the European Stability Mechanism — the Eurozone “bailout fund”.

The action clears the way for debt-burdened nations including Spain and Greece to get the support necessary to remain solvent.

Mortgage rates were also pressured higher by a strong consumer confidence report. When consumers are more confident in the economy, they may be more likely to spend and consumer spending accounts for more than two-thirds of the U.S. economy.

This week, mortgage rates throughout Arizona face competing pressures. The Fed’s bond-buy has started and that will lead rates lower, but with Housing Starts and Existing Home Sales data set for release, data could pull rates up.

September 17, 2012 Posted by | mortgage-rates-whats-ahead-september-17-2012 | , , | Leave a comment

Existing Home Sales Rise To 4.47 Million

Existing Home SalesHome resales climbed 2% last month as the housing market continues its measured, steady recovery.

According to the National Association of REALTORS®, Existing Home Sales rose to 4.47 million units in July on a seasonally-adjusted, annualized basis.

An “existing home” is a home that cannot be classified as new construction and, despite a reduction in the national homes inventory, the number of previously-occupied homes sold in July was higher by 10% as compared to one year ago.

The Existing Home Sales also reported the folliowing :

  • First-time buyers accounted for 34% of all purchasers, down from 34% in June
  • Real estate investors accounted for 16% of all purchasers, down from 19% in June
  • Cash buyers accounted for 27% of all purchasers, down from 29% in June

In addition, the real estate trafde group reports that distressed sales accounted for a smaller percentage of the overall home resale market in July. Just 24% of home resales were for homes in various forms of foreclosure or short sale.

This is down one percent from June, and five percent from July 2011.

It also marks the smallest percentage of homes sold in “distressed” status since the trade group began to track such data 4 years ago.

Lastly, nationwide, the supply of homes for sale dropped to 6.5 months. At the current pace of sales, therefore, the complete U.S. home resale inventory would be sold by the end of Q1 2013.

There are now 2.40 million homes for sale — a 24% reduction from July 2011.

For today’s Phoenix home buyers, the July Existing Home Sales report reinforces the notion that housing is in recovery and what the nation’s home builders have been saying since late-2011 — the next six months for housing will likely be strong. Growth may not be linear, but it figures to be consistent.

With home inventory low and mortgage rates the same, the home resale market looks ripe for good deals.

August 23, 2012 Posted by | Housing Analysis | , , | Leave a comment

Existing Home Supply Ticks Higher To 6.6 Months Nationwide

Existing Home Supply

Home resales slipped more than 5 percent last month, putting a damper recent housing market enthusiasm.

According to the National Association of REALTORS®, Existing Home Sales fell to 4.37 million units in June 2012 on a seasonally-adjusted, annualized basis. This is 250,000 fewer home sales per year as compared May’s figures which NAR has revised 2 percentage points higher.

The pace at which homes are selling has slowed, too. As compared to May, the Existing Home Supply rose 0.2 months. At the current pace of sales nationwide, the national home supply would now be exhausted in 6.6 months.

A home supply of 6.0 months is believed to mark a market in balance. There are currently 2.39 million homes for sale nationwide — the lowest total in 3 months and more than 24% below than the listed inventory at this point last year.

Other noteworthy statistics from the Existing Home Sales report include :

  • First-time buyers accounted for 32% of all purchasers in June, down from 34% in May
  • Real estate investors accounted for 19% of all purchasersin June, up from 17% in May
  • Cash buyers accounted for 29% of all purchasers in June, up from 28% in May

In addition, distressed sales as a percentage of all sales was unchanged in June as foreclosures sold for an average discount of 18 percent below market value. Short sales nationwide sold at an average 15 percent discount.

More on “distressed sales” : In June, distressed homes accounted for 25% of all home resales, the smallest percentage of homes sold with such status since the real estate trade group began tracking the data in 2008.

Despite falling home sales and rising home supplies, however, home resales are expected to return to growth in July. Last month’s Pending Home Sales Index spiked to a 2-year high, and 80% of homes under contract close within 60 days. This portends well for July’s Existing Home Sales data, due in 4 weeks.

Low mortgage rates and rising rents in Scottsdale and in many U.S. cities continue to fuel the U.S. housing market. Home buyers should expect higher home prices ahead.

July 20, 2012 Posted by | Housing Analysis | , , | Leave a comment

Existing Home Sales Slip 2% In May

Existing Home SalesHome resales slipped last month; a slight setback for the nation’s housing market’s recovery.

According to the National Association of REALTORS®, Existing Home Sales fell to 4.55 million units in May 2012 on a seasonally-adjusted annualized basis, representing a 2 percent drop from April.

An “existing home” is a home that’s been previously owned or occupied, and cannot be categorized as new construction.

Despite May’s retreat, however, as compared to last year at this time, Existing Home Sales by units are higher by 10 percent. In other words, like everything else in housing, the long-term statistical trend has been a positive one.

The housing market has seen its bottom and is finding balance.

Other data from the Existing Home Sales report includes :

  • First-time buyers accounted for 34% of all purchasers, down from 35% in April
  • Real estate investors accounted for 17% of all purchasers, down from 20% in April
  • Cash buyers accounted for 28% of all purchasers, down from 29% in April

In addition, distressed sales accounted for 25% of all sales in May, down from 28% in April.

“Distressed sales” include the sale of homes in various stages of foreclosure, and of short sales. This is the smallest percentage of homes sold in a “distressed” status since the real estate trade group began tracking the data in 2008. 

And, lastly, home supplies rose by 0.1 months to 6.6 months nationwide in May. This means that, at the current pace of sales, the complete U.S. home resale inventory would be sold out before the end of 2012.  A 6-month supply is widely believed to represent a market in balance between buyers and sellers.

There are now 2.49 million homes for sale — a 20% reduction from May 2011.

Home resales may have slipped last months but volume remains brisk nationwide. All-time low mortgage rates and high home affordability are keeping buyers in the market. Home prices are rising in many U.S. cities as the housing market continues its slow, steady recovery. 

June 26, 2012 Posted by | Housing Analysis | , , | Leave a comment

Existing Home Sales Climb 3.4 Percent In April

Existing Home Supply

Low mortgage rates are helping to make homes more affordable. It appears home buyers have taken notice.

According to the National Association of REALTORS®, Existing Home Sales rose 3.4% in April from the month prior, registering 4.62 million homes sold on a seasonally-adjusted, annualized basis.

An “existing home” is a home that’s been previously occupied. April’s sales volume represents a 10 percent jump from April of last year.

For buyers and sellers in Scottsdale , the April Existing Home Sales report supports the notion that the housing market may be improving; that the “bottom” occurred sometime in late-2011. Home values have been rising in many U.S. markets and home builders now report the highest levels of foot traffic through models since 2007.

Demand for U.S. housing is growing.

It also helps that home affordability is at an all-time high. Not in recorded history have this many homes for sale been affordable to buyers earning a moderate household income, on a percentage basis. Additionally, there is now a larger stock of homes from which buyers can choose.  

In April, the number of homes for sale nationwide jumped 9.5 percent to 2.54 million — the largest home resale inventory of the year.

At the current pace of sales, it would take 6.6 months for the complete home inventory to sell. Analysts consider a 6.0-month supply to be a market in balance. Anything less than a 6-month supply suggests a “buyer’s market”.

Home values peaked nationwide in April 2007. Since then, it’s been an uneven recovery. Some markets came back quickly, while others did not. On a neighborhood-by-neighborhood basis, even, there’s signifcant variance in how home values have fared.

In other words, although the April Existing Home Sales report indicates housing strength nationally, it’s the local data that matters most to today’s buyers and sellers. To get real-time real estate data for a particular street or area, talk with a local real estate agent.

May 23, 2012 Posted by | Housing Analysis | , , | Leave a comment

Pending Home Sales Index Crosses The 100 Barrier

Pending Home Sales 2010-2012

After a series of worse-than-expected data last month, the housing market appears to be back on track.

The Pending Home Sales Index posted 101.4 in March, a four percent gain from the month prior and the index’s highest reading since April 2010 — the last month of that year’s federal home buyer tax credit.

A “pending home” is a home under contract to sell, but not yet closed. The Pending Home Sales Index is tracked and published by the National Association of REALTORS® monthly.

The March report marks the index’s first 100-plus reading in nearly two years.

To home buyers and sellers throughout Arizona , this is statistically significant because the Pending Home Sales Index is normalized to 100, a value corresponding to the average home contract activity in 2001, the index’s first year of existence. 2001 was an historically-strong year for the housing market.

The March 2012 Pending Home Sales Index, therefore, puts current market activity on par with market activity from 2001.

You wouldn’t know it from reading this week’s papers, though. There have been stories about how the Case-Shiller Index put home values at new loans; and how the Existing Home Sales figures unexpectedly dropped off; and how the New Home Sales report was a laggard.

But this is why the Pending Home Sales Index can be so important.

What makes the Pending Home Sales Index different from those other data points is that the Pending Home Sales Index is a “forward-looking” housing market indicator.

Unlike most data which aims to tell us how the housing market performed at some point in the past, the Pending Home Sales Index attempts to tell us how the housing market will perform at some point in the future. 

80% of homes under contract close within 2 months. Many more close within months 3-4. Therefore, on the strength of the March Pending Home Sales Index, we should expect a strong April and May nationwide

If you’re shopping for homes right now, consider taking advantage while the market remains somewhat soft. Mortgage rates are low and home prices are, too. It can make for a good home-buying conditions.

April 27, 2012 Posted by | Housing Analysis | , , | Leave a comment

Existing Home Sales Slip In March

Existing Home Sales In March, for the second straight month, home resales slipped nationwide.

According to the National Association of REALTORS®, March 2012 Existing Home Sales fell to 4.48 million units on a seasonally-adjusted annualized basis — a 3 percent drop from February.

An “existing home” is a home that’s been previously occupied or owned.

The weaker-than-expected Existing Home Sales data is the third such housing report this month to suggest a lull in the spring housing market. Earlier this week, homebuilder confidence slipped for the first time in three months and March Single-Family Housing Starts fell, too.

The news wasn’t entirely bad for home resales, however. Although total home units sold decreased, so did the number of homes available for sale. There were just 2.37 million homes for sale nationwide in March, a 2 percent drop from the month prior.

At the current pace of sales, therefore, the entire nation’s home resale stock would “sell out” in 6.3 months. This is the second-fastest pace since the housing market’s April 2007 peak.  

A 6-month supply is widely believed to represent a market in balance between buyers and sellers.

The March Existing Home Sales data shows that — despite record-low mortgage rates nationwide — buyer activity in Scottsdale is slowing, and seller activity may be slowing, too.

So long as the two forces remain in balance, home prices should do the same. This is the law of Supply and Demand at work. 

However, if home sales continue to slide and home inventory builds, buyers may find themselves with an edge in negotiations. 

If you’re planning to buy a home in 2012, the long-term housing trend is still toward recovery. This season may be a good time to look at your options. Talk to your real estate agent to see what’s available. Low mortgage rates may persist, but low home prices may not.

April 20, 2012 Posted by | Housing Analysis | , , | Leave a comment

Existing Home Sales Stay Strong; Spring Season Underway

Existing Home Sales

The market for home resales stays strong.

Despite sparse home inventory, the National Association of REALTORS® reports that 4.59 million existing homes were sold in February on a seasonally-adjusted, annualized basis. An “existing home” is a home that cannot be classified as new construction.

Last month’s sales data represents a 9 percent improvement from the year prior.

There are now just 2.43 million homes for sale nationwide — a 19% reduction versus a year ago. The complete home inventory would “sell out” in 6.4 months at the current sales pace.

Some analysts believe that a 6-month home supply indicates a housing market in balance.

The real estate trade group’s report contained other noteworthy statistics, too :

  1. 32 percent of home sales were made to first-time buyers
  2. 33 percent of home sales were made with cash (i.e. no mortgage)
  3. 34 percent of home sales were of foreclosed homes or homes in short sale

In addition, nearly one-third of all home sales “failed” last month, the result of homes not appraising at the purchase price; or, the buyer’s inability to secure mortgage financing; or, insurmountable home inspection issues.

Even accounting for last month’s high contract failure rate,though,  the Existing Home Sales report still posted its second-highest reading since May 2010. For today’s Scottsdale home buyer, the data may be a “buy signal”.

As compared to last fall, home supplies are down and home sales are up. Basic economics tell us that home prices should start to rise shortly — if they haven’t already. After all, the Existing Home Sales data is 30 days old, reporting on February. It’s nearly April today.

The good news is that homes remain affordable. With conforming and FHA mortgage rates in the low-4 percent range, home affordability is at its highest in history. Home prices may rise this spring, but at least your mortgage payment should remain low.

March 22, 2012 Posted by | Housing Analysis | , , | Leave a comment