Lawrence Yun Archives

Home Buyers Get An Early Start On Spring

A home sale isn’t official until the closing process has been completed and all the paperwork has been signed. However, that usually doesn’t happen until about a month after the buyer’s offer is accepted. In the meantime, the sale is considered pending. In other words, the home is under contract but not officially sold. But, though it hasn’t been made official, more often than not these pending sales end up being completed sales. For this reason, the National Association of Realtors’ Pending Home Sales Index is a good indicator of future home sales and current buyer activity. In February, the index registered a 5.5 percent increase and reached its second highest reading since May 2006. In other words, buyer demand has been strong in the weeks leading up to the start of the spring sales season. Lawrence Yun, NAR’s chief economist, says the results prove buyers are eager to get the season started. “Buyers came back in force last month as a modest, seasonal uptick in listings was enough to fuel an increase in contract signings across the country,” Yun said. In fact, sales rose in all four regions, with the strongest increases seen in the Northeast and Midwest – where unseasonably warm weather may have led to an earlier than usual start to the buying season. More here.

Contract Signings Inch Forward In October

The National Association Of Realtors’ Pending Home Sales Index measures the number of contracts to buy homes that are signed each month. Because it tracks contracts, and not closings, it is a good indicator of future sales of previously owned homes. In October, the index saw a 0.1 percent gain over the month before and is now 1.8 percent higher than the same time last year. Lawrence Yun, NAR’s chief economist, says pending sales are at their highest level since July. “Most of the country last month saw at least a small increase in contract singings and more notably, activity in all four major regions is up from a year ago,” Yun said. “Despite limited listings and steadfast price growth that’s now carried into the fall, buyer demand has remained strong because of the consistently reliable job creation in a majority of metro areas.” But Yun believes affordability conditions will begin to suffer in the months ahead if there isn’t an increase in the number of homes available for sale. With mortgage rates rising and inventory low, buyers could begin to feel the effects, especially in markets where prices have already largely recovered. More here.

Home Sales Hit Highest Pace In A Decade

Autumn may typically be the time of year when home sales start to slow down but new numbers show sales of previously owned homes up for the second straight month and at their highest annual pace since February 2007. The data, from the National Association of Realtors, shows October sales up 2 percent over the month before and 5.9 percent above last year’s estimate. Lawrence Yun, NAR’s chief economist, says the past two months have been an autumn revival for the housing market. “October’s strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand that held back many would-be buyers over the summer because of tight supply,” Yun said. “The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion. These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall.” Sales were up in all regions, with the largest gains in the South, where home sales rose 2.8 percent. Also in the report, the typical home stayed on the market for 41 days in October, though 43 percent of homes sold in less than a month. More here.

Today’s Homeowner Stays In One Place Longer

There are a lot of things to consider when deciding whether or not to sell your house and move. Home values, your mortgage rate, school district, plans for the future, and proximity to friends and family all play a role. In other words, after buying a house, homeowners generally stay there for a handful of years – if only to avoid uprooting their life. These days, however, Americans are staying in their homes almost 60 percent longer than they did before the housing crash. Traditionally, homeowners moved every six years or so. Now it’s closer to 10 years. Lawrence Yun, the National Association of Realtors’ chief economist, recently told a meeting of real estate agents in Florida that sellers are staying in their homes for longer periods of time and, it may be holding the housing market back. But why would Americans be less likely to move now than they were a decade ago? For one, historically low mortgage rates. Homeowners that were able to refinance over the past few years, may be reluctant to risk losing their low rate. In other instances, people whose homes lost value during the last recession may have stayed in their current homes in hopes of selling once prices rebounded. All in all, it’s expected that there will be an increasing number of Americans looking to sell their home in the near future and, when that happens, the influx of for-sale inventory will help moderate prices and give buyers more choices when looking for a house to call home. More here.

Who Buys Vacation Homes And Where They Buy

Everyone, at one time or another, has dreamed of buying a vacation home. Whether it was just a temporary fantasy brought on by a particularly perfect trip or it was something more real, it’s hard not to think about the joys of owning a place in your favorite town or getaway spot. But who’s actually buying vacation homes and where are the most popular locations to have a house? Well, the National Association of Realtors collects that info each year as part of their Investment and Vacation Home Buyers Survey. This year’s results show that, among vacation home buyers, the South is the most popular area to buy. In fact, a full 47 percent of vacation homes bought last year were purchased in the South. The West came in second with 25 percent. Also, beach houses outpace all others, with sales more than doubling the number of homes purchased in the mountains, at a lake, or in the country. And who’s most likely to buy a vacation home? Not surprisingly, Lawrence Yun, NAR’s chief economist, says older buyers. “Baby boomers at or near retirement continue to propel the demand for second homes, although headwinds softened the overall volume of vacation sales last year,” Yun said. In 2015, the median household income of a vacation home buyer was $103,700 and the property they purchased was a median distance of 200 miles away from their primary home. More here.

Home Buyers Stay Active Into Fall

Conventional wisdom has it that after the spring and summer sales season, the real estate market cools off. Home sellers wait until next year and buyers are too busy with the school year, holidays, and winter weather to bother shopping for a home. There is an argument to be made, however, that fall is a great time to shop for a home and, according to new numbers from the National Association of Realtors, many Americans agree. In fact, the NAR’s Pending Home Sales Index – which measures the number of contracts to buy homes signed during the month – was up 1.5 percent in September and is now 2.4 percent higher than last year. Lawrence Yun, NAR’s chief economist, says demand was strong, particularly in the West and South. “Buyer demand is holding up impressively well this fall with Realtors reporting much stronger foot traffic compared to a year ago,” Yun said. “Although depressed inventory levels are keeping home prices elevated in most of the country, steady job gains and growing evidence that wages are finally starting to tick up are encouraging more households to consider buying a home.” The Pending Home Sales Index is considered a good indicator of future home sales because it measures contracts to buy, rather than closings. More here.

First-Time Buyers Spur Home Sales Gain

September sales of previously owned homes rose 3.2 percent from the month before, according to new numbers released by the National Association of Realtors. The gains were a welcome change after a two-month slide. Lawrence Yun, NAR’s chief economist, said the improvement was due to a boost in the number of first-time home buyers active near the end of summer. “The home search over the past several months for a lot of prospective buyers, and especially for first-time buyers, took longer than usual because of competition for the minimal amount of homes for sale,” Yun said. “Most families and move-up buyers look to close before the new school year starts. Their diminishing presence from the market towards the end of summer created more opportunities for aspiring first-time homeowners to buy last month.” In fact, the share of first-time buyers rose to 34 percent in September. That’s the highest it’s been since July 2012. Historically, new home buyers represent closer to 40 percent of all home sales. Because there have been fewer first timers active in the market recently, an increasing number is seen as good news and vital to housing’s health. Also encouraging, the number of homes available for sale rose in September. At the end of the month, inventory was 1.5 percent higher than the month before. More here.

Contract Signings Hit Late Summer Slowdown

In August, the number of signed contracts to buy existing homes dropped 2.4 percent from the month before. The numbers, released by the National Association of Realtors, indicate a few things important to prospective buyers and home sellers. First, because contract signings precede closings, a decreasing number of pending sales is a good indicator of where home sales are headed. That means, a drop in August may show up as an upcoming decline in the number of recorded sales of previously owned homes. But why are sales slowing? Some of it is due to the natural ebb-and-flow of the market. As the summer season comes to a close, sales typically slow down. The other reason is inventory. Currently much of the country has a lower-than-usual number of homes for sale. That means, fewer choices for buyers and more upward pressure on prices. Lawrence Yun, NAR’s chief economist, says this is causing the housing market’s momentum to slow. “Contract activity slackened throughout the country in August except for in the Northeast, where higher inventory totals are giving home shoppers greater options and better success signing a contract,” Yun said. In fact, the Northeast saw a 1.3 percent increase in contract signings, while the Midwest, South, and West all saw declines. More here.

Are Down Payment Misconceptions Holding Buyers Back?

New research shows many potential home buyers have misconceptions about how much they

example

need to have saved for a down payment. The most often cited amount is 20 percent of the price of the house. But, depending on the type of loan, it could be much less and large numbers of eligible buyers don’t know that. In fact, according to the National Association of Realtors’ quarterly HOME survey, awareness of low-down payment mortgage options was low across all age groups but particularly among Americans over 65 and under 35. In fact, almost 40 percent of young adults believe they’ll need more than 20 percent saved before they can buy a house. Lawrence Yun, NAR’s chief economist, says this misconception could be scaring off many would-be, first-time home buyers. “It’s possible some of the hesitation about buying right now among young adults is from them not realizing there are mortgage financing options available that do not require a 20 percent down payment, which would be north of $100,000 in some expensive areas in the country,” Yun said. “In fact, most first-time buyers put down much less. In the 35-year history of NAR’s Profile of Home Buyers and Sellers – the longest-running survey series of national housing data – the average median down payment has been 5 percent for first-time buyers.” More here.

Typical Home In August Sold In 36 Days

In August, the typical home for sale sold in just 36 days, according to new data from the National Association of Realtors. That’s 11 days quicker than last year. Additionally, nearly half of all homes sold were off the market in less than a month. Homes are selling faster and part of the reason is that, in many markets, there are fewer homes available for sale. With fewer homes on the market and buyer demand high, the homes that are for sale are likely to be swept up quickly. Unfortunately, too few homes for sale may also be responsible for overall sales slowing as the summer season draws to a close. August numbers show sales of previously owned homes down 0.9 percent from the month before. Lawrence Yun, NAR’s chief economist, says short supply is behind many of the housing market’s current issues. “There’s no question that after peaking in June, sales in a majority of the country have inched backwards because inventory isn’t picking up to tame price growth and replace what’s being quickly sold,” Yun said. Still, regional results show sales up slightly from one year ago everywhere but the Northeast, where they are unchanged from last year but up 6.1 percent month-over-month. More here.