Tag Archives: Home Sales

New Home Sales Smash Expectations: Spike To 10 Year Highs As Average Price Tops $400k For First Time

Following the bounce in exisitng home sales (albeit lower YoY), new home sales ripped back higher in October (up 6.2% vs expectations of a 6.1% drop) following a big downward revision of last month’s manic spike. This is the highest print for new home sales since Nov 2007.

The 6.2% surge is a six standard deviation beat of expectations…

https://i0.wp.com/www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/25/20171127_home2.jpg

September’s 18.9% spike was revised notably lwoer to a 14.2% jump to 685k SAAR…

https://i0.wp.com/www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/25/20171127_home.jpg

This is the highest new home sales SAAR print since Nov 2007… but still has a long way to go back to ‘normal’…

https://i2.wp.com/www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/25/20171127_home1.jpg

And finally, we note that the average new home sales price hit a new record high, above $400K for the first time ever – $400,200.

Source: ZeroHedge

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Pending Home Sales Plunge In September To Lowest Since Jan 2015

Following September’s modest bounce in exisitng home sales, and explosion in new home sales (biggest jump in 25 years), today’s pending home sales was a huge disappointment, blowing the bounce back narrative.

Pending Home Sales tumbled 5.4% YoY…

https://i2.wp.com/www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171026_homes1.jpg

To its lowest since Jan 2015…

https://i2.wp.com/www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171026_homes2.jpg

Take your pick – is the housing ‘recovery’ good, bad, or ugly…

https://i0.wp.com/www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171026_homes_0.jpg

Source: ZeroHedge

 

Existing Home Sales Down 1.8% In June And Why It Matters

Existing Home Sales in June Dive 1.8 Percent: Same Old Problem? Second and Third Quarter Impact?

The wind down to the end of the second quarter is not going very well. Existing home sales in June fell 1.8% to a seasonally adjusted annualized rate of 5.52 million. The Econoday consensus estimate was 5.58 million.

The slip in pending home sales was no false signal as existing home sales fell 1.8 percent in June to a lower-than-expected annualized rate of 5.520 million. Year-on-year, sales are still in the plus column but not by much, at 0.7 percent which is the lowest reading since February.

Compared to sales, prices are rich with the median of $263,800 up 6.5 percent from a year ago. Another negative for sales is supply which fell 0.5 percent in the month to 1.96 million for an on-year decline of 7.1 percent. Relative to sales, supply is at 4.3 months vs 4.2 months in May.

High prices appear to be keeping first-time buyers out of the market with the group representing 32 percent of sales vs 33 percent in May and 35 percent for all of last year.

Rising prices and thin supply, not to mention low wages, are offsetting favorable mortgage rates and holding down sales. Housing data have been up and down and unable to find convincing traction so far this year. Watch for new home sales on Wednesday where general strength is the expectation.

Existing Homes Sales Month-Over-Month and Year-Over-Year

Same Old Problem?

Mortgage News Daily says Existing Home Sales Weakness Blamed on Same Old Problem.

Existing home sales slipped in June, with the blame again placed on low levels of inventory. The decline in sales, announced on Monday by the National Association of Realtors® (NAR), was anticipated, as pending home sales have decreased in each of the previous three months, ticking down 0.8 percent in May.

NAR said sales of existing single-family houses, townhouses, condos and cooperative apartments were down 1.8 percent in June, to a seasonally adjusted annual rate of 5.52 million units, the second slowest performance of the year.

Lawrence Yun, NAR chief economist, says the pullback in existing home sales in June reflected the lull in contract activity in March, April, and May. “Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that’s straining their budget,” he said. “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”

The median existing-home price for all housing types in June was $263,800, up 6.5 percent from June 2016 ($247,600). This is a new peak price, surpassing the record set in May. June marked the 64th straight month of year-over-year gains.

The median existing single-family home price was $266,200 in June and the median existing condo price was $245,900. Those prices reflected annual increases of 6.6 percent and 6.5 percent respectively.

The tight supply of homes continues to be reflected in short marketing period. Properties typically stayed on the market for 28 days in June, one day more than in May, but six days fewer than in June 2016. Short sales were on the market the longest at a median of 102 days in June, while foreclosures sold in 57 days and non-distressed homes took 27 days. Fifty-four percent of homes sold in June were on the market for less than a month.

“Prospective buyers who postponed their home search this spring because of limited inventory may have better luck as the summer winds down,” said NAR President William E. Brown. “The pool of buyers this time of year typically begins to shrink as households with children have likely closed on a home before school starts. Inventory remains extremely tight, but patience may pay off in coming months for those looking to buy.”

First-time buyers accounted for 32 percent of existing home sales in June, down from 33 percent the previous month and a year earlier, while individual investors purchased 13 percent, unchanged from a year ago.

Convoluted Logic

Supposedly buyers may have better luck because the pool of buyers is shrinking as summer winds down. Really? By that logic, if there was only one person looking there would be a 100% success rate.

Yun says “The demand for buying a home is as strong as it has been since before the Great Recession.”

Really? By what measure?

Attitudes and Price

This is not a case of inventory or strong unmet demand. Here are the real factors.

  1. The Fed re-blew the housing bubble and wages did not keep up. People cannot afford the going prices. Thus, the number of first-time buyers keeps shrinking.
  2. Millenials do not have the same attitudes towards debt, housing, and family formations as their parents.
  3. Millenials are unwilling to spend money they do not have, for a place that will keep them tied down. They would rather be mobile.

Second and Third Quarter Impact

The decline in existing home purchases portends weakness in consumer spending.

There will be fewer people painting, buying furniture, updating appliances, remodeling kitchens, adding landscaping etc. The pass through effect will be greatest in the third quarter unless there is a rebound.

By Mike “Mish” Shedlock

Pending Home Sales Drop In March – Stagnant For 2 Years

(ZeroHedge), contracts to buy previously owned U.S. homes declined in March after rising a month earlier by the most since 2010, as perhaps the seasonal exuberance gives way to affordability constraints. Despite NAR’s comments that “home shoppers are coming out in droves this spring,” it is evident from the chart below that pending home sales have been stagnant for almost two years.

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https://i0.wp.com/www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170426_sales_0.jpg

Regionally, only The South saw a sales increase:

  • The PHSI in the Northeast decreased 2.9 percent to 99.1 in March, but is still 1.8 percent above a year ago.
  • In the Midwest the index declined 1.2 percent to 109.6 in March, and is now 2.4 percent lower than March 2016.
  • Pending home sales in the South rose 1.2 percent to an index of 129.4 in March and are now 3.9 percent above last March.
  • The index in the West fell 2.9 percent in March to 94.5, and is now 2.7 percent below a year ago.

Lawrence Yun, NAR chief economist, says sparse inventory levels caused a pullback in pending sales in March, but activity was still strong enough to be the third best in the past year.

“Home shoppers are coming out in droves this spring and competing with each other for the meager amount of listings in the affordable price range,” he said.

“In most areas, the lower the price of a home for sale, the more competition there is for it. That’s the reason why first-time buyers have yet to make up a larger share of the market this year, despite there being more sales overall.

Yun worries that the painfully low supply levels this spring could heighten price growth — at 6.8 percent last month — even more in the months ahead. Homes in March came off the market at a near-record pace 1, and indicating an increase in the likelihood of listings receiving multiple offers, 42 percent of homes sold at or above list price (the second highest amount since NAR began tracking in December 2012).

“Take my money!!”

Wild Swings in New Home Sales: Median Price Down, Average Price Up

New home sales shot up 6.1% in February aided by 39% jump in the mid-west but a 21.4% decline in the Northeast.

Sales came in just a bit below the top Econoday estimate.

New home sales shot 6.1 percent higher in February to a 592,000 annualized rate that easily beats the Econoday consensus for 565,000 and is near the top estimate of 600,000. Sales appeared to have gotten a boost from builder concessions as the median price fell a monthly 3.9 percent to $296,200 for a year-on-year rate that’s suddenly in the negative column at minus 4.9 percent.

Strength is centered in the Midwest where the sales rate surged 21,000 to 89,000 and easily surpassing 11,000 gains for the both the West, at 157,000, and the South at 313,000. Sales in the Northeast fell sharply in yesterday’s existing home sales report and are down 9,000 to a very low 33,000 annualized rate in today’s report.

Supply of new homes did rise slightly in the month, up 4,000 to 266,000 currently on the market, but relative to sales supply fell to 5.4 months from 5.6 months. Supply has been thin all cycle for new homes and was at 5.5 months in February last year.

Most of the news is good in this report underscored by the average price which, reflecting high-end properties, jumped 9.9 percent in the month for a yearly 11.7 percent gain at $390,400 and a new record. Today’s report helps offset weakness in existing home sales and keeps the housing sector on a moderately climbing slope.

New Home Sales Jump Second Month

Mortgage News Daily reports New Home Sales Build on January Strength.

New home sales posted a much better February than did existing home sales and, in fact, better than most analysts had expected.

It was the second consecutive month of strength for the indicator which had see-sawed between positive and negative results in the waning months of 2016.

On a non-seasonally adjusted basis, there were 49,000 new homes sold in February compared to 41,000 in January. Thirty-six-thousand of the homes sold were in the $200,000 to 299,000 price tier.

The median price of a new home sold in February was 296,200 compared to $311,300 a year earlier. The average price was $390,400 compared to $349,400.

There were strong geographic differences in the rate of sales. In the Northeast, sales were down 21.4 percent for the month while remaining 13.8 percent higher than the previous February. In contrast, the Midwest posted a 30.9 percent month-over-month improvement and the annual change was 50.8 percent.

Sales in the South rose 3.6 percent from January and 7.9 percent from February 2016 and sales in the West were up 7.5 percent and 6.8 percent from the two earlier periods.

At the end of February, there were an estimated 261,000 homes available for sale on a non-seasonally adjusted basis. This is an estimated 5.4-month supply at the current rate of sale. Sixty-three-thousand of the available homes are completed, construction had not started on 51,000.

Median vs Average Sale

It’s interesting to see the median price dropping with the average price soaring. It’s a tale of two economies and who is and isn’t gaining.

That said, these swings are so wild, I smell revisions.

For now, this should boost GDP estimates.

By Mike Shedlock | mishtalk.com

Used Home Sales Fall From 10-Year Yigh

U.S. home resales fell more than expected in February amid a persistent shortage of houses on the market that is pushing up prices and sidelining potential buyers.

The National Association of Realtors said on Wednesday existing home sales declined 3.7 percent to a seasonally adjusted annual rate of 5.48 million units last month.

January’s sales pace was un-revised at 5.69 million units, which was the highest level since February 2007. Economists polled by Reuters had forecast sales decreasing 2.0 percent to a pace of 5.57 million units last month.

“Realtors are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that’s pushing up price growth and pressuring the budgets of prospective buyers,” said Lawrence Yun, the NAR’s chief economist.

Sales were up 5.4 percent from February 2016, underscoring the sustainability of the housing market recovery despite rising mortgage rates. In February, houses typically stayed on the market for 45 days, down from 50 days in January.

U.S. financial markets were little moved by the data as investors increasingly worried whether President Donald Trump would be able to push ahead with his pro-growth policies. The dollar fell against a basket of currencies and U.S. stocks were trading mostly lower. Prices for U.S. government bonds fell.

The 30-year fixed mortgage rate is hovering at 4.30 percent.

Home loans could cost more after the Federal Reserve last week raised its benchmark overnight interest rate by 25 basis points to a range of 0.75 percent to 1.00 percent. The U.S. central bank has forecast two more rate hikes for 2017.

BUOYANT LABOR MARKET

Demand for housing is being buoyed by a labor market that is near full employment. But home sales remain constrained by the dearth of properties available for sale, which is keeping prices elevated.

While the number of homes on the market increased 4.2 percent to 1.75 million units last month, housing inventory remained close to the all-time low of 1.65 million units hit in December. Supply was down 6.4 percent from a year ago.

Housing inventory has dropped for 21 straight months on a year-on-year basis. With supply remaining tight, the median house price surged 7.7 percent from a year ago to $228,400 in February. That marked the 60th consecutive month of year-on-year price gains.

Builders have been unable to fill the housing inventory gap, citing rising prices for materials, higher borrowing costs, and shortages of lots and labor.

Lennar Corp, the second-largest U.S. homebuilder, reported on Tuesday a drop in quarterly gross margin as the company struggled with higher land and construction costs.

The Florida-based builder, however, sold 5,453 homes in the first quarter ended Feb. 28, up from 4,832 homes in the year-earlier period, and reported a 12 percent jump in orders.

The NAR estimates housing starts and completions should be in a range of 1.5 million to 1.6 million units to alleviate the chronic shortage. Housing starts are running above a rate of 1.2 million units and completions around a pace of 1 million units.

At February’s sales pace, it would take 3.8 months to clear the stock of houses on the market, up from 3.5 months in January. A six-month supply is viewed as a healthy balance between supply and demand. Though higher prices are increasing equity for homeowners and might encourage some to put their homes on the market, they could be sidelining first-time buyers from the market. First-time buyers accounted for 32 percent of transactionslast month, well below the 40 percent share that economists and realtors say is needed for a robust housing market.

That was down from 33 percent in January but up from 30 percent a year ago.

Source: Crusader Journal

Pending Home Sales Unexpectedly Dive In November

The Pending Home Sales Index declined 2.5% in November.

Economists, who are generally surprised by everything, were caught off guard once again.

Despite the fact that mortgage rates have been climbing for months, the economists’ consensus expectation was for pending home sales to rise 0.5%. Not a single economist predicted a decline this month. The range of estimates was 0.3% to 2.0%.

Dispirited Buyers

Mortgage News Daily reports Pending Home Sales Reflect “Dispirited” Buyers.

Pending sales, which were widely expected to make a good showing in November, pulled back sharply instead. The National Association of Realtors® (NAR) said its Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts for existing home purchases, declined 2.5 percent to 107.3 in November from 110.0 in October. NAR said “the brisk upswing in mortgage rates and not enough inventory dispirited some would-be buyers.” The decrease brought the PHSI to its lowest level since January of this year and it is now 0.4 percent below the index last November which stood at 107.7.

Analysts polled by Econoday had been upbeat about the November outlook. The consensus was for an increase of 0.5 percent with some analysts predicting as much as a 2.0 percent gain.

Lawrence Yun, NAR chief economist said, “The budget of many prospective buyers last month was dealt an abrupt hit by the quick ascension of rates immediately after the election. Already faced with climbing home prices and minimal listings in the affordable price range, fewer home shoppers in most of the country were successfully able to sign a contract.”

Only one of the four regions displayed any strength in November. Pending sales in the Northeast were up 0.6 percent to 97.5 and are 5.7 percent higher than in November 2015.

The Midwest saw contract signings decline 2.5 percent to 103.5, falling behind the previous November by 2.4 percent. Sales in the South were down 1.2 percent to an index of 118.7, this is 1.3 percent behind the level a year earlier. The West posted the largest loss, 6.7 percent, and a year-over-year drop of 1.0 percent.

Yun says higher borrowing costs somewhat cloud the outlook for the housing market in 2017. NAR’s most recent HOME survey, found that renters have less confidence about the present being a good time to buy than they had at the beginning of the year. On the other hand, Yun says that the impact of higher rates will be partly neutralized by stronger wage growth because of the 2 million net new job additions expected next year.

The Pending Home Sales Index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. 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. Pending sales are generally expected to close within two months of contract signing.

The notion that strong wage growth and jobs will partially neutralize rising interest rates is silly. But Yun has a mission: Always be as positive as possible about housing.

Economists had a second reason to expect sales would decline: On December 16, I reported Housing Starts Dive 18.7 Percent: Mortgage Rates Soar.

by Mike “Mish” Shedlock