Lawrence Yun Archives

Sales Of Existing Homes Up In April

Sales of previously owned homes rose for the second-consecutive month, according to new numbers released by the National Association of Realtors. In April, existing-home sales – which includes single-family homes, townhomes, condominiums, and co-ops – increased 1.7 percent, beating economists’ expectations and pushing sales 6 percent above last year’s level. Lawrence Yun, NAR’s chief economist, said April’s increase is a sign that the housing market is slowly building momentum. “Primarily driven by a convincing jump in the Midwest, where home prices are most affordable, sales activity overall was at a healthy pace last month as very low mortgage rates and modest seasonal inventory gains encouraged more households to search for and close on a home,” Yun said. “Except for in the West – where supply shortages and stark price growth are hampering buyers the most – sales are meaningfully higher than a year ago in much of the country.” A look at regional results shows the South and West both down slightly from the month before, while the Northeast posted a 2.8 percent improvement and the Midwest surged 12.1 percent. Also in the report, the number of homes available for sale rose 9.2 percent. More here.

Home Sales See Best 1st Quarter Since 2007

So far this year, there has been a lot of talk about higher home prices, declining affordability, and a lack of available homes for sale. But, according to the National Association of Realtors, demand remains strong and sales of previously owned homes just had their best first quarter since 2007. Lawrence Yun, NAR’s chief economist, says the housing market continues to make gains despite the challenges facing home buyers this spring. “The housing market continues to expand at a moderate pace in spite of the fact that home prices are rising too fast in some areas because of insufficient supply fueled by the grossly inadequate number of new single-family homes being constructed,” Yun said. “The good news is that pending sales in recent months have remained stable and should support a modest gain in home sales heading into the summer.” Yun is forecasting home sales to finish the year at their strongest pace in a decade. With mortgage rates still historically low and an improved job market, home buyers are showing that they aren’t deterred by higher prices. However, Yun cautions that there needs to be an increase in the number of homes for sale in order to meet the level of demand from buyers and keep prices affordable. More here.

Pending Home Sales Signal Strong Spring

For the second straight month, pending home sales increased from the month before, according to new numbers released by the National Association of Realtors. The Pending Home Sales Index – which measures contract signings not closed sales – was up 1.4 percent from the previous month and reached its highest reading in almost a year. Lawrence Yun, NAR’s chief economist, says March’s increase is a sign that the spring buying season is off to a solid start. “Despite supply deficiencies in plenty of areas, contract activity was fairly strong in a majority of markets in March,” Yun said. “This spring’s surprisingly low mortgage rates are easing some of the affordability pressures potential buyers are experiencing and are taking away some of the sting from home prices that are still rising too fast above wage growth.” Though affordability concerns persist, there is still strong demand from buyers – which is being sustained both by low borrowing costs and an improved job market. Regionally, only the West saw a decline in March, falling 1.8 percent from the month before. The Northeast and South were both up approximately 3 percent, while the Midwest was mostly flat. More here.

Home Sales Jump To Start Spring

After a disappointing February, sales of previously owned homes bounced back in March, according to new numbers from the National Association of Realtors. In fact, existing-home sales – which include single-family homes, townhomes, condominiums, and co-ops – rose 5.1 percent and were up in all four regions of the country. Lawrence Yun, NAR’s chief economist, says the sales rebound was driven by particularly large increases in the Midwest and Northeast. “Closings came back in force last month as a greater number of buyers – mostly in the Northeast and Midwest – overcame depressed inventory levels and steady price growth to close on a home,” Yun said. “Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well. However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures.” Supply and affordability have been keeping some buyers at bay, especially first-time home buyers. The report found that new buyers represented just 30 percent of all home sales in March, which is unchanged from last month and also the year before. Typically, first-time home buyers represent closer to 40 percent of sales. More here.

Most Renters Want A Single Family Home

A new survey of consumer preferences found that an overwhelming majority of current renters say, if they were to move, that they’d prefer to buy a single-family home. In fact, a full 75 percent of renters who responded to the National Association of Realtors quarterly Housing Opportunities and Market Experience survey said they’d like to own a home and just 21 percent of them said they’d prefer to buy in an urban area. Lawrence Yun, NAR’s chief economist, said the fact that most Americans prefer a larger home outside of the city isn’t exactly news. “The American Dream for most consumers is not a cramped, 500-square-foot condo in the middle of the city, but instead a larger home within close proximity to the jobs and entertainment an urban area provides,” Yun said. “While this is not a new discovery, supply and demand imbalances and unhealthy levels of price growth in several metro areas have made buying an affordable home an onerous task for far too many first-time buyers and middle-class families.” But while a majority of renters and younger buyers said they’d prefer a larger home in the suburbs, respondents over the age of 65 were the most likely to consider buying a condo and almost as likely as respondents under the age of 35 to say they’d consider buying in an urban area. More here.

Pending Home Sales Improve In February

Pending sales refer to the number of contracts to buy homes signed during the month. Because they track signings – and not closings – they are considered a good indicator of future existing home sales. In other words, any increase in pending sales will likely be reflected in upcoming home sales numbers, as those buyers complete the closing process. For this reason, the National Association of Realtors’ Pending Home Sales Index is closely watched by analysts and industry experts. In February, the index rose 3.5 percent and hit a seven-month high. According to Lawrence Yun, NAR’s chief economist, the results are a good indication that the real estate market is beginning to heat up. “After some volatility this winter, the latest data is encouraging in that a decent number of buyers signed contracts last month, lured by mortgage rates dipping to their lowest levels in nearly a year and a modest, seasonal uptick in inventory,” Yun said. “Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers. Without adequate supply, sales will likely plateau.” A look at regional results shows February’s improvement was driven primarily by an 11.4 percent gain in the Midwest. However, contract signings also rose in the South and West. The Northeast, on the other hand, was relatively flat, falling just 0.2 percent. More here.

Existing Home Sales Fall In February

In January, sales of previously owned homes hit their highest level since 2007. Then, according to new numbers from the National Association of Realtors, February sales fell 7.1 percent. The drop was more than economists expected and a disappointment after a strong start to the year. Lawrence Yun, NAR’s chief economist, called it a step back. “Sales took a considerable step back in most of the country last month, and especially in the Northeast and Midwest,” Yun said. “The lull in contract signings in January from the large East Coast blizzard, along with the slump in the stock market, may have played a role in February’s lack of closings. However, the main issue continues to be a supply and affordability problem. Finding the right property at an affordable price is burdening many potential buyers.” A closer look at the data does reveal a regional difference in sales performance. For example, the Northeast saw a 17.1 percent drop in home sales, while the South only fell 1.8 percent. But, though winter weather may have played a significant role in hampering home sales, a lack of available homes to buy remains the issue to watch as buyers head into the spring and summer sales season. More here.

Pending Sales See 17th Straight Annual Gain

Though sales estimates can be volatile from month-to-month, the numbers can be a bit more clear when looked at year-over-year. For example, the National Association of Realtors’ Pending Home Sales Index – which measures the number of contracts to buy homes signed during the month – fell 2.5 percent in January from December’s estimate. But, despite the decline, contract signings were up over year-before levels for the 17thconsecutive month – an indication that sales continue to strengthen. Because of this, January’s slowdown isn’t likely cause for concern. Lawrence Yun, NAR’s chief economist, says there were many reasons for the dip. “While January’s blizzard possibly caused some of the pullback in the Northeast, the recent acceleration in home prices and minimal inventory throughout the country appears to be the primary obstacle holding back would-be buyers,” Yun said. “Additionally, some buyers could be waiting for a hike in listings come springtime.” But, though spring is traditionally the time homeowners put their homes up for sale, Yun says low inventory will not improve until home builders begin building more new homes at lower price points. More here.

Existing Home Sales Rise 11% Over Last Year

Sales of previously owned homes were relatively flat in January, according to new estimates from the National Association of Realtors. In fact, sales rose just 0.4 percent from December. But despite being virtually unchanged from the month before, home sales were at their strongest pace in six months and are now 11 percent higher than at the same time last year. Lawrence Yun, NAR’s chief economist, says sales started the year on solid footing. “The housing market has shown promising resilience in recent months, but home prices are still rising too fast because of ongoing supply constraints,” Yun said. “Despite the global economic slowdown, the housing sector continues to recover and will likely help the U.S. economy avoid a recession.” And, though flat overall, a closer look at January’s sales data shows that regional results were varied. For example, sales were up 4 percent in the Midwest and 2.7 percent in the Northeast. At the same time, sales of previously owned homes were unchanged in the South and dropped 4.1 percent in the West. More here.

Contract Signings Unchanged In December

When a prospective home buyer signs a contract to buy a home, the closing process begins. At that point, the home sale is listed as pending. Each month, the National Association of Realtors tracks the number of contract signings because, among other things, it provides a good indicator of what future sales of existing homes might look like. In December, the Pending Home Sales Index was virtually flat, increasing just 0.1 percent. Lawrence Yun, NAR’s chief economist, says contract activity lost some momentum at the end of the year, though an increase in the Northeast helped stabilize December’s results. “Warmer than average weather and more favorable inventory conditions compared to other parts of the country encouraged more households in the Northeast to make the decision to buy last month,” Yun said. “Overall, while sustained job creation is spurring more activity compared to a year ago, the ability to find available homes in affordable price ranges is difficult for buyers in many job creating areas.” Despite those challenges, however, pending sales ended the year 4.2 percent above year-before levels. More here.