Tag: New York City Real Estate

In July, 51 percent of homes were on the market less than a month before selling, according to new numbers from the National Association of Realtors. The data provides more evidence that, even as the summer season wears down, there is still a high level of buyer demand in most markets. Lawrence Yun, NAR’s chief economist, says it was the fourth month in a row homes sold in 30 days or less. “July was the fourth consecutive month that the typical listing went under contract in under one month,†Yun said. “This speaks to the significant pent-up demand for buying rather than any perceived loss of interest.†According to Yun, a lack of new home construction is keeping inventory levels low and competition high. That means, home buyers should be prepared to act fast if they find a home they like. Overall, the number of existing homes that sold in July was 1.3 percent fewer than the previous month but still 2.1 percent higher than last year. Regionally, sales were up in the South and West, but fell in the Northeast and Midwest. More here.

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly flat last week, remaining at their lowest level in months. However, despite favorable rates, demand for loans to buy homes hasn’t moved much. In fact, last week purchase application demand was down 2 percent from the week before, though it remains 9 percent higher than at the same time last year. So why aren’t buyers more enthusiastic about low rates? Well, one reason is inventory. There is more demand for affordable, entry-level homes but fewer homes for sale in that price range. Which means, though buyers are interested, they may be having trouble finding a suitable house to buy. Sales on the high-end of the market, however, are doing fine. Joel Kan, an MBA economist, says demand for jumbo loans is high. “A strong appetite for jumbo loans and a highly competitive jumbo market has led to increased availability and lower pricing of jumbo loans over the past few years,†Kan told CNBC. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Most people don’t buy their house with cash. In fact, historically cash sales account for just 10 percent of all home sales. But, according to Freddie Mac’s most recent monthly outlook, the fact that the number of homes for sale remains lower than normal has caused a higher than normal number of cash sales. “Usually, not many people like to invest a lot of cash into real estate, which is illiquid and has high transaction costs,†Freddie Mac’s chief economist, Sean Becketti, says. “However, in the current, highly competitive housing market, a cash offer is an effective way to gain an advantage over other bidders.†Still, cash sales are well below their peak of 35 percent, with a share closer to 18 percent according to the most recent data. Overall, Freddie Mac expects mortgage rates to remain low through the end of the year and home sales to surpass last year’s numbers. However, low inventory remains an issue. The outlook says home sales would have been much higher if not for the fact that many markets have fewer homes for sale than is typical. More here.

The number of new homes that are built and sold has an effect on everyone who buys or sells a house. Mostly, this is true because of prices. Regardless of whether you’re interested in buying a new house, the number of new homes on the market helps determine prices for all houses. That’s because, new homes add to the number of homes available for sale, which helps alleviate upward pressure on prices. In short, good news for builders is good news for buyers. That’s why the most recent Housing Market Index from the National Association of Builders is encouraging. According to their most recent release, builder confidence rose in August. In fact, the index increased four points to 68, on a scale where any number above 50 indicates more builders view conditions as good than poor. Granger MacDonald, NAHB’s chairman, says demand is rising. “Our members are encouraged by rising demand in the new-home market,†MacDonald said. “This is due to ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence.†More here.

These days, many markets are suffering from a lack of homes for sale. And where there are fewer homes to buy, there are higher prices and more competition among buyers. But what’s behind the shortage? Well, a new survey reveals the real reason homeowners have decided to stay put and it’s probably not what you’d expect. The survey found simple demographics may be the biggest factor. A closer look at the numbers reveals that younger homeowners have plans to sell in the near future but the vast majority of baby boomers don’t. In fact, 85 percent of older homeowners said they had no plans to sell in the next year. This, however, isn’t that odd. Older Americans have always been less likely to move. The difference these days is that the overall population has grown older. The share of Americans between the ages of 55 and 74 has risen 30 percent in the past 30 years. That means, there are more older homeowners who aren’t that likely to put their homes up for sale. The good news, though, is that 60 percent of owners who said they were hoping to sell within the next year are millennials, which means there could soon be more affordable homes on the market for interested first-time buyers. More here.