Mortgage News in the Carolinas
Posts tagged Existing Home Sales
Pending Home Sales Point To Seller’s Market This Summer
0387 days
by Geoff Brown
in Housing Analysis
The National Association of REALTORS® Pending Home Sales Index rose for the third straight month last month.
A “pending home sale” is a home under contract to sell, but not yet closed.
The Pending Home Sales Index rose 5 percent in March, posting its second-highest reading since April 2010. Not coincidentally, that month marked the expiration of last year’s federal home buyer tax credit.
Home buyers and sellers in Charlotte would do well to watch the Pending Home Sales Index each month. This is because — unlike most government and private data — the Pending Home Sales Index is a “forward-looking” indicator.
Because 80% of “pending” homes close within 2 months, and a significant share of the rest close within months 3 and 4, the Pending Home Sales Index tends to correlate to future strength (or weakness) in housing.
The Pending Home Sales Index, in other words, is an excellent precursor to the Existing Home Sales report, issued monthly.
By region, the Pending Home Sales Index varied last month.
- Northeast : -3.2% from February
- Southeast : +10.3% from February
- Midwest : +3.0% from February
- West : +3.1% from February
All 4 regions were worse from a year ago.
As with everything in housing, however, we must remember that real estate is neither national, nor regional. It’s local. Sales volume may be higher in areas like the Midwest, but that doesn’t mean that all Midwest markets are experiencing similar gains, if any gains at all.
To get local real estate data , talk to a real estate agent that specializes in that area. It’s the best way to know what’s happening on the street level.
Pending Home Sales Rebound; Suggest Brighter Spring For Housing
0418 days
by Geoff Brown
in Housing Analysis
On a seasonally-adjusted basis, the Pending Home Sales Index rose 2 percent last month, according to the National Association of REALTORS®. A “pending home sale” is defined as a home under contract to sell, but not yet closed.
February’s Pending Home Sales Index rebound breaks a 2-month losing streak, and reverses the recent downward momentum in housing. Both Existing Home Sales and New Home Sales volume showed a sizable loss last month.
For buyers and sellers of real estate in Charlotte , the Pending Home Sales Index is of particular import. It’s one of the few forward-looking indicators in housing, and February’s data suggests a stronger spring season than was the winter.
Region-by-region, Pending Home Sales data varied:
- Northeast Region: -10.9%
- Midwest Region : +4.0%
- South Region : +2.7%
- West Region : +7.0%
3 of 4 regions showed marked improvement, which is good for housing. In the fourth — New England — it’s likely that inclement weather hampered results.
February was colder-than-normal and the month capped a record-breaking snowfall season for the region. Anecdotally, fewer homes are sold in the cold-and-snow of winter and it’s likely that the weather affected local housing markets.
Looking to March and April, therefore, we should expect Existing Home Sales data to rebound. This is because 80% of “pending” homes close within 60 days, and because improving weather should release pent-up demand for housing.
More sales plus higher home demand tends to lead home prices higher. If you’re in the market for a new home, consider that your best negotiation leverage comes in a weak market. As the seasons turn, your leverage looks poised to slip.
The best time to buy this year may be right now.
Existing Home Sales Unexpectedly Drop In February
0425 days
by Geoff Brown
in Housing Analysis
Existing Home Sales fell 10 percent last month, according to a report from the National Association of REALTORS®.
On an annual basis, 4.88 million homes were sold in February — the first time annualized home resales dropped below 5,000,000 since November 2010.
An “existing home” is one that’s not considered new construction.
And it’s not just sales volume that’s down. Home inventory is higher, too. At the current pace of sales, the number of months needed to sell the complete home resale inventory rose by 1.1 months, to 8.6 months nationally.
It’s the biggest one-month jump in supply since July 2010 — the month after last year’s federal home buyer tax credit program expired.
The data is somewhat unexpected, too. NAR’s Pending Home Sales report is a reliable predictor for the housing market and, based on recent findings, home sales were projected to climb in February. It’s unclear why they didn’t.
Regardless, the February sales data reveals an interesting breakdown by buyer-type. Notably, the percentage of first-time home buyers in the market grew by more than any other segment.
- First-time home buyers : 34% of all sales, +5% from January
- Repeat buyers : 47% of all sales, -1% from January
- Real estate investors : 19% of all sales, -4% from January
Cash buyers represented 33 percent of all sales, up 1 tick from the month prior.
For Charlotte home buyers, February’s Existing Home Sales data suggests more home supply and lower home prices this spring. However, rising mortgage rates could eliminate the monthly savings attributed to falling home values.
To get the most from your mortgage-buying dollar, lock while rates are low.
Pending Home Sales At The Highest Levels Since April 2010
0474 days
Another day, another strong report for housing.
The Pending Home Sales Index climbed 2 percent in December, according to the National Association of REALTORS®. A “pending home sale” is an existing home under contract to sell, but not yet closed.
Pending Home Sales are up for the fifth time in 6 months. The December reading is now its highest since the federal home buyer tax credit’s April 2010 contract deadline, and the figure is well north of the Pending Home Sales Index 3-year average.
Coupling this data with December’s strong Existing Homes Sales report (+12%) and its strong New Home Sales report (+17%), it’s clear that the housing market has past its trough and is in Recovery Mode.
Even consumer confidence is at an 8-month high.
On a regional basis, December’s Pending Home Sales Index varied as compared against November. The South region led the way, and the West region lagged.
- Northeast Region: +1.8%
- Midwest Region : +8.0%
- South Region : +11.5%
- West Region : -13.2%
Home buyers would do well to study last month’s Pending Home Sales Index. It offers clues of what to expect during the spring buying season. For example, according to the National Association of REALTORS®, 80 percent of homes under contract close within 60 days.
Therefore, we can look at the December Pending Home Sales Index and project, with a high level of confidence, that home sales will be higher throughout February and March on a units-basis.
Furthermore, because the Existing Home Sales and New Home Sales reports show that housing stock is falling nationwide, spring buyers in Charlotte will notice find more competition for the available housing stock. As the Supply-and-Demand curve shifts towards sellers, home prices rise.
In other words, there’s no rush to buy a home, but as the year progresses, home prices are expected to rise, as are mortgage rates. This one-two combination will impact home affordability negatively. And the higher that mortgage rates go, the worse the damage.
Your home-buying dollar won’t go as far in 2011′s second half as it will go right now. If you have plans to buy a home in 2011, consider moving up your time-frame.
