Sales of previously owned homes rose for the third consecutive month in November, reaching their highest sales pace since February 2007. The 0.7 percent gain in November put home sales 15.4 percent above where they were at the same time last year. Lawrence Yun, NAR's chief economist, says the housing market has been helped by a healthy job market and the expectation that mortgage rates would rise. “The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates accurately rose from their historically low level have combined to drive sales higher in recent months,” Yun said. “Furthermore, it's no coincidence that home shoppers in the Northeast – where price growth has been tame all year – had the most success last month.” In fact, regional results show the Northeast saw an 8 percent improvement in November, while the South, Midwest, and West were relatively flat from the previous month. Also in the report, the typical home for sale last month was on the market 43 days, which is considerably faster than last year when homes stayed on the market an average of 54 days. More here.
Will Low Inventory Affect Your Home Search?
If you've followed the housing market at all this year, you've likely heard something about inventory. Inventory refers to the number of homes available for sale. This year, it's been lower than usual. And, when for-sale inventory is low and buyer demand is high – as it's been this year – prices rise and sellers hold most of the negotiating power. In many markets, that has been the story this year. However, according to a new analysis from Trulia, whether or not low inventory will affect a buyer's home search depends on where that buyer is looking and what kind of home they're looking to buy. For example, starter homes had the largest drop in inventory last year, falling 10.7 percent. On the opposite end of the spectrum, the number of high-end homes for sale only fell 3.7 percent. Naturally, that means a first-time buyer looking for an affordable home may have fewer homes to choose from than a luxury home buyer. However, it also depends on where you live. According to Trulia's analysis, markets in the Southwest and Southeast have generally been adding enough homes for sale to keep up with buyer demand. In fact, Trulia's research shows double-digit increases in the number of homes for sale in some markets, especially in states like Florida and California. That could be an indication that we'll see inventory begin to improve in more markets next year. More here.
The Number Of Fixer-Uppers For Sale Rises
The number of homes for sale that are described as “fixer-uppers” is on the rise – which is good news if you're a homeowner that hopes to sell your house “as is” or a buyer looking for a project. The analysis, done by Zillow, found that, over the past five years, there's been a 12 percent increase in the number of homes on the market that'll require some extra love from their new owners. They also found that the trend is more pronounced on the higher end of the market, with a 35 percent increase in the number of “fixer-uppers” among the top third of homes for sale compared to a 3 percent increase among more affordably priced homes. So why are more homes being listed “as is”? Simply put, the increase is due to low inventory. With fewer houses for sale, homeowners in many markets feel more comfortable listing their homes without having done every repair and renovation because buyers have fewer choices. Svenja Gudell, Zillow's chief economist, says there are also more older homes out there. “Sellers are in the driver's seat, with the freedom to list their home for sale 'as-is' without worrying about price cuts or the home sitting on the market,” Gudell said. “And without sufficient new construction, the housing stock has aged, so home buyers are finding more and more homes on the market in need of a little TLC.”
Home Buyers Say The Bigger The Better
Owning a home is a big draw for buyers. In fact, recent data from the National Association of Realtors shows 31 percent of all buyers said they were purchasing a house because they wanted to own. Among first-time buyers, that number shoots up to 67 percent. Obviously, the dream of ownership is alive and well. But the second most common reason buyers cited when asked why they were purchasing a home was because they wanted something bigger. And the number of buyers who say they need a larger home is rising. According to economist Amanda Riggs, there are a couple of reasons for this. One is the number of homeowners who have been waiting to sell as home prices rebounded from the housing crash. These homeowners may have built up enough equity over the past few years to now afford something bigger. The other part of it is the fact that the largest share of home sellers last year were between the ages of 35 and 44. “We can speculate that the sellers probably had a child in the last few years and wanted a bigger home to expand their family,” Riggs writes in a post for the NAR's Economists' Outlook Blog. Whatever the reason – whether it's boosted equity or a growing family – Americans have consistently shown that, when it comes to their homes, bigger is better. More here.
Sellers May Want To Look At Listing In Winter
There are few real-estate truisms better known than the one about spring being the best time to sell a house. The reason it's so widely known is that it is, for the most part, totally true. For a multitude of reasons, the housing market does heat up every spring. But does that automatically mean it slows down every winter, as is commonly assumed? Well, according to one study, no. In fact, an analysis found that, not only wasn't winter the slowest time of the year, it was the next best thing to selling in spring. For example, among homes listed in spring, 18.7 percent sold for more than their asking price. In winter, 17.5 percent sold above asking. Additionally, 46.2 percent of homes listed in winter sold within 30 days – just 1.8 percent fewer than did in spring. So what accounts for winter's unexpected popularity? Well, weather doesn't seem to have anything to do with it. The analysis found the statistics pretty consistent from coast to coast – whether they looked at sunny California or snow belt states like Michigan. It may just be that buyers at that time of year are more motivated to move quickly and, since there are fewer sellers listing in winter, there is less competition for their attention. Whatever the reason, it may be time to reconsider your seasonal assumptions about the real-estate market. More here.
What 1st-Time Home Buyers Need To Know Now
It's normal to feel a little bit of stress when buying a house. Whether it's financial worry or just the logistics of moving all of your belongings to a new home, there's a lot to think about and plan for. This is especially true for first-time home buyers. That's because first timers have never navigated their way through the home buying process before and may be feeling some added fear, confusion, and concern about handling the responsibilities of homeownership. So what should younger buyers be watching for if they're planning on buying a home soon? Well, according to Fannie Mae's chief economist, Doug Duncan, mortgage rates and inventory will be key to determining whether or not there are enough affordable, entry-level homes available for new buyers next year. “Demand from first-time buyers has increased with household formation and is outpacing supply, leading to significant price increases and affordability challenges for entry-level buyers,” Duncan said in Fannie Mae's most recent Economic & Housing Outlook. “Home purchase affordability will be constrained further if the recent pickup in mortgage rates persists, which would present a downside risk to our forecast of housing and mortgage activity.” In other words, if mortgage rates continue rising and inventory remains low, first-time buyers should expect higher prices and more competition in the year ahead. More here.
Buying Cheaper Than Rent In Many Markets
Because buying a home is such a major undertaking, it's easy to assume that it's more expensive than finding a place to rent. That, however, isn't necessarily true. In fact, buying remains the more affordable option in many markets across the country. A recent report from Zillow highlights some of the reasons why that is. For one, when home prices crashed, rental costs didn't. That means, rent continued to head upward while home values were making up for lost ground. So, though home prices have largely recovered from their post-crash lows, they remain below their peak in most areas. The other reason buying a house remains the more affordable option is mortgage rates. While they've been climbing recently, they are still low by historical standards. And, with historically low rates helping to alleviate some of the effects of higher prices, affordability and monthly housing costs are kept under control. Going forward, Zillow predicts rental cost growth will begin to fall in the coming year. That's good news for the real estate market, as it will provide some relief to younger renters who may struggle to save for a down payment on their first home. More here.