Mortgage News in the Carolinas
Posts tagged Pending Home Sales
Pending Home Sales Point To Seller’s Market This Summer
0284 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
0315 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.
New Home Sales Reach 8-Month High
0375 days
by Geoff Brown
in New Home Sales
Sales of new homes rose sharply in December, posting a 17.5 percent gain from the month prior.
According to the Department of Housing and Urban Development, New Home Sales climbed to 329,000 in December, besting November by close to 50,000 units on a seasonally-adjusted annual basis.
Last month’s reading is an 8-month high for New Home Sales, and the latest in a series of signals that housing is improving in Charlotte and around the country.
Note that December’s Existing Homes Sales and Building Permits reports also showed marked gains last month, climbing 12 percent and 6 percent, respectively.
Furthermore, an interesting pattern is emerging in the price points of home sales. The highest levels of relative growth are occurring within the “move-up buyer” segments. Entry-level price points are lagging the market, as a whole.
December’s New Home Sales data breaks down by price point as follows:
- Homes under $200,000 : 36% of the market (-9% from November)
- Homes between $200,000-$299,999 : 32% of the market (+7% from November)
- Homes between $300,000-$499,999 : 27% of the market (+7% from November)
Luxury homes accounted for less than 5% of the newly-built home market, suggesting that Carolinas homeowners are either not “buying new” as frequently, or are choosing to renovate their existing properties instead.
The 2010 housing market finished on a tear, and that momentum is carrying forward into 2011. Expect the spring season to show strongly, putting pressure on home prices to rise.
Coupled with rising mortgage rates, the long-term cost of homeownership is unlikely to be as low as it is today.
Pending Home Sales Slip In September, Suggesting A Buyer’s Market Until January
0455 days
After 3 straight months of improvement, the Pending Home Sales Index slid lower in September. As compared to August, September’s reading fell 2 percent.
A “pending home sale” is a home under contract to sell, but not yet closed. The data is drawn from a combination of local real estate associations and national brokers, and represents 20 percent of all purchase transactions in a given month.
Because of the large sample set, and because 80 percent of homes under contract close within 60 days, the Pending Home Sales Index is a terrific future indicator for the housing market. A high correlation exists between the Pending Home Sales Index and the NAR’s monthly Existing Home Sales report issued two months hence.
Expect home sales to idle into the New Year, therefore.
For home buyers in Charlotte , this is good news. Over the last two months, housing markets have overwhelmingly favored home sellers.
Consider than, since June, the volume of both new home sales and existing home sales has increased, causing the available home inventory to fall by months. Meanwhile, helped by low interest rates, demand from buyers has remained relatively stable.
As with everything in economics, falling supply with constant demand leads to higher prices.
Therefore, the Pending Home Sales Index’s fading September figures suggest a more balanced supply-and-demand curve in the months ahead, a move that should suppress rising home prices and shift negotiation leverage back to the buy-side.
So long as mortgage rates remain rock bottom, the autumn season is looking like a terrific time to buy.
