Month: July 2019
- July 31, 2019
- July 28, 2019
- July 27, 2019
- July 26, 2019
- July 20, 2019
U.S. Existing-Home Sales Rose in May
By Laura Kusisto | Jun 21, 2019
WASHINGTON—Sales of previously owned homes rose in May, a sign that falling mortgage rates could be nudging the housing market toward a modest spring performance after a sluggish start to this prime selling season.
Sales rose 2.5% in May from the prior month to a seasonally adjusted annual rate of 5.34 million, the National Association of Realtors said Friday.
The spring is crucial to the housing market because roughly 40% of the year’s sales take place in March through June. May was the first month this spring when sales rose from the prior month, but compared with a year earlier sales in May still declined 1.1% The housing market struggled late last year even as the rest of the economy boomed, in part because higher mortgage rates priced some buyers out of the market.
Now, analysts said the housing market may be benefiting from growing economic uncertainty.
“We are really seeing some headwinds in the broader economy right now, with the trade war and in the technology sector and also in manufacturing and agriculture,” said Tian Liu, chief economist at Genworth Mortgage Insurance. “The housing market is actually less exposed to those headwinds right now.”
Mortgage rates are now below 4% for the first time since January of last year, according to Freddie Mac. That is down from nearly 5% in the fall, a saving of roughly $200 a month for the typical home buyer.
The Federal Reserve indicated Wednesday that it could cut interest rates in the months ahead if an economic outlook clouded by uncertainty over trade policy doesn’t improve, raising the prospect that mortgage rates may drift even lower.
Ashley Lauren Farnschlader, a Realtor in Philadelphia, said she had one client reach out to her because she had read that mortgage rates were low and had decided to start looking for a home again. Still, Ms. Farnschlader added, “I don’t think it’s been the big push that everybody wants it to be.”
Indeed, economists say the housing market’s performance is surprisingly tepid given the sharp fall in mortgage rates. Some analysts said that suggests the market is moderating after years of rapid price growth and sales will struggle to reach previous highs of the current housing cycle in 2017.
“Certainly with existing sales, I think we’ve seen the peak,” said David Berson, chief economist at Nationwide Insurance.
He added he expects most metropolitan areas to continue to see modest price and sales growth but that some, such as San Jose, Calif., are more vulnerable to a downturn because prices have risen so steeply.
Existing home sales have now fallen on an annual basis for 15 straight months. New home sales have grown strongly in recent months, but the construction sector has struggled. Housing starts fell 0.9% in May from the prior month to a seasonally adjusted annual rate of 1.269 million, the Commerce Department said Tuesday. U.S. home-builder confidence also dropped in June, as builders reported concerns over rising construction costs and trade issues.
Prices are continuing to rise faster than incomes, which may be offsetting some of the additional buying power that consumers are getting from lower rates. The national median sale price for a previously owned home last month was $277,700, up 4.8% from a year earlier and the strongest monthly pace of growth since August 2018, the National Association of Realtors said Friday. It marked the 87th straight month of year-over-year gains.
News Corp., owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.
Inventory of homes for sale is continuing to increase. The NAR said there were 1.92 million existing homes available for sale at the end of May, up 2.7% from a year earlier and a 4.3-month supply at the current sales pace.
The market has been starved for inventory for years, but in this case economists said inventory levels are increasing primarily because homes are taking longer to sell so the growing choices aren’t necessarily appealing ones.
The city of Boston has seen roughly a 30% increase in inventory compared with the same time last year, according to Larry Rideout, chairman of Boston-based Gibson Sotheby’s International Realty.
“Everything is always behind the curve,” he said. “Everyone has decided it’s the chance to [put their home on the market] and unfortunately they’ve missed that window.”
—Harriet Torry contributed to this article.
- July 16, 2019
Home Buyer Statistics
First-Time vs. Repeat Buyers:
First-time buyers: 33%
Median age of first-time buyers: 32
Median age of repeat buyers: 55
Median household income of first-time buyers: $75,000
Median household income of repeat buyers: $100,000
The typical home purchased was 1,900 square feet in size, was built in 1991, and had three bedrooms and two bathrooms.
Among those who financed their home purchase, buyers typically financed 90% of the home price.
87% of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69 percent in 2001.
Buyers who would use their agent again or recommend their agent to others: 74%
Home Seller Statistics
The typical home seller in 2017 was 55 years of age, had a median household income of $98,800, and lived in their home for 9 years.
91% of sellers were assisted by a real estate agent when selling their home.
Recent sellers typically sold their homes for 99% of the listing price, and 23% reported reducing the asking price at least once.
The typical home sold was on the market for 3 weeks.
39% of sellers who used a real estate agent found their agents through a referral by friends or family, and 24% used the agent they previously worked with to buy or sell a home.
Sellers who definitely would use same agent again: 69%
Source: 2018 National Association of REALTORS® Profile of Home Buyers and Sellers
For Sale By Owner (FSBO) Statistics
FSBOs accounted for 7% of home sales in 2017. The typical FSBO home sold for $200,000 compared to $265,500 for agent-assisted home sales.
FSBO methods used to market home:
Yard sign: 22%
Friends, relatives, or neighbors: 18%
Online classified advertisements: 6%
Open house: 10%
For-sale-by-owner websites: 5%
Social networking websites (e.g. Facebook, Twitter, etc.): 12%
Multiple Listing Service (MLS) website: 4%
Print newspaper advertisement: 2%
Direct mail (flyers, postcards, etc.): 2%
None: Did not actively market home: 49%
Most difficult tasks for FSBO sellers:
Getting the right price: 17%
Understanding and performing paperwork: 12%
Selling within the planned length of time: 5%
Preparing/fixing up home for sale: 8%
Having enough time to devote to all aspects of the sale: 3%