Tag Archives: NAR

Real Estate

Existing-Home Sales up 4.9%

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Existing-home sales rose strongly in May, with all four regions of the country experiencing sales gains on the previous month, according to the National Association of REALTORS®. The association also noted that inventory gains continued to help moderate price growth.

Total existing-home sales (comprised of completed transactions on single-family homes, townhomes, condominiums and co-ops) rose 4.9 percent to a seasonally adjusted annual rate of 4.89 million in May from an upwardly-revised 4.66 million in April. This was the highest monthly rise since August 2011, but existing home sales remain 5 percent below year-ago levels.

Lawrence Yun, NAR chief economist, said current sales activity is rebounding after the lackluster first quarter. “Home buyers are benefiting from slower price growth due to the much-needed, rising inventory levels seen since the beginning of the year,” he said. “Moreover, sales were helped by the improving job market and the temporary but slight decline in mortgage rates.”

Inventory and average sales price also increased in May. Inventory climbed 2.2 percent, and the median existing-home price for all housing types in May was 5.1 percent higher than year-ago levels, at $213,400.

“Rising inventory bodes well for slower price growth and greater affordability, but the amount of homes for sale is still modestly below a balanced market. Therefore, new home construction is still needed to keep prices and housing supply healthy in the long run,” Yun said.

Earlier this month, NAR reported new home construction activity is currently insufficient in most of the U.S., and some states could face persistent housing shortages and affordability issues unless housing starts increase to match up with local job creation.

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Real Estate

Housing Bubbles?

 

Photo credit: http://www.desicolours.com/
Photo credit: http://www.desicolours.com/

DAILY REAL ESTATE NEWS | THURSDAY, SEPTEMBER 12, 2013

The National Association of REALTORS®‘ home price affordability index dropped below a long-term trend line, once again igniting fears of a housing bubble. But some experts say the worries are being blown out of proportion.

The latest reading of the index, which reflects July data, marked the lowest level of home affordability since July 2009 and the fourth month that the index has come in below trend. The index measures the household income needed to qualify for a traditional mortgage for a median-priced single-family home.

Higher mortgage rates and home prices are causing affordability to drop. Home prices have surged 13.4 percent compared to a year ago, and mortgage rates are at their highest averages since February 2012. Wages are rising — but not as fast as home prices.

The West has posted some of the biggest drops in affordability, as home prices have climbed 18.4 percent in the region in the last year.

NAR’s affordability index peaked in January at 210.7, and it has been falling ever since. It now stands at 157.8. An index reading above 100 indicates that median income is higher than needed to qualify for a mortgage. “A score of 157.8 officially indicates that a household earning the median income has 57.8 percent more income than needed to get a mortgage on a median-priced home,” CNBC reports.

But a recent paper by three economists from Robert Morris University in Pennsylvania suggests that when the index falls below trend for at least three months, it may be an indication of the beginning of a housing bubble. The economists point to the beginning of 2004, when home affordability fell below its long-term trend. Some say that marked the beginning of the last housing bubble. Housing affordability stayed below the long-term trend until December 2008, the economists note.

Housing affordability this year dropped below the long-term trend in April and has stayed there through July, CNBC reports. But even signs of a housing bubble don’t mean home prices are doomed to crash, analysts say.

NAR experts write at the Economists’ Outlook blog that housing affordability likely could strengthen in the coming months “as prices have decreased from a month ago and most likely reached their seasonal peak for the year. Even with rates increasing, certain metro areas have healthy inventory levels, and consumers can still look to purchase before those historically low rates are a thing of the past.”

Source:  “Latest Housing Affordability Data,” NAR’s Economists’ Outlook Blog (Sept. 6, 2013) and “Yep, it’s another housing bubble,” CNBC (Sept. 10, 2013)

 

 

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Real Estate

July Pending Home Sales Rebound

China in N.Y. 4th of July Parade, 1911 (LOC)
China in N.Y. 4th of July Parade, 1911 (LOC) (Photo credit: The Library of Congress)

 

 

 

 

 

 

 

 

 

 

Pending home sales rose in July to the highest level in over two years and remain well above year-ago levels, according to the National Association of REALTORS® (NAR).

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 2.4 percent to 101.7 in July from 99.3 in June and is 12.4 percent above July 2011 when it was 90.5. The data reflect contracts but not closings.

Lawrence Yun, NAR chief economist, said the index is at the highest level since April 2010, which was shortly before the closing deadline for the home buyer tax credit. “While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity,” Yun said.

Limited inventory is constraining market activity. “All regions saw monthly increases in home-buying activity except for the West, which is now experiencing an acute inventory shortage,” Yun added.

The PHSI in the Northeast increased 0.5 percent to 77.0 in July and is 13.4 percent higher than a year ago. In the Midwest the index grew 3.4 percent to 97.4 in July and is 20.2 percent above July 2011. Pending home sales in the South rose 5.2 percent to an index of 111.7 in July and are 15.6 percent above a year ago. In the West the index slipped 1.7 percent in July to 109.9 but is 1.3 percent higher than July 2011.

Existing-home sales are projected to rise 8 to 9 percent in 2012, followed by another 7 to 8 percent gain in 2013. Home prices are expected to increase 10 percent cumulatively over the next two years.

“Falling visible and shadow inventories point toward continuing price gains. Expected gains in housing starts of 25 to 30 percent this year, and nearly 50 percent in 2013, are insufficient to meet the growing housing demand,” Yun said.

Source: NAR

 

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Business, Real Estate

Facts On The 3.8% Health Tax

 

Tax
Tax (Photo credit: 401K)

 

 

 

 

 

 

 

 

A 3.8 percent levy on certain investment income was included in healthcare legislation two years ago, and now misinformation about the tax’s application to home sales is being passed along over the Internet and e-mail, throwing some prospective home sellers into a panic. In actuality, very few owners will be affected by the new tax taking effect in 2013.

The tax will only be on investment income of upper income taxpayers. Included in the definition of investment income is capital gains from home sales above a certain amount and for households whose income is above a certain amount.  This means individuals who make $200,000 a year or more, or married couples who earn at least $250,000 a year are affected. Additionally, the tax is only applied to home sales if the proceeds exceed $250,000 for an individual, or $500,000 for married couples. And there still are other income and tax particulars that are considered before the 3.8 percent tax is triggered.

The National Association of REALTORS® recommends that members become familiar with the tax, but avoid coaching their clients on the policy because the amount of tax will vary from individual to individual as the elements that comprise adjusted gross income differ from taxpayer to taxpayer. NAR has published a brochure on how the tax works, which is now available online.

Download the 3.8% tax brochure (PDF).

Source:NAR and “Realtors Say Despite Efforts, Tax Rumor Keeps Spreading,” Glens Falls Post-Star (NY) (03/10/12)

 

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Real Estate

Home Sales Slow in September Due to Foreclosure Moratoriums

U.S. pending home sales slipped for the first time in three months in September as foreclosure moratoriums  slowed sales.

The National Association of Realtors’ index for pending sales of existing homes fell 1.8% to 80.9, the industry group said Friday. Economists surveyed by Dow Jones Newswires had expected pending home sales would increase by 3% in September.

Year over year, the pending-home-sales index is 24.9% below its level of 107.8 in September 2009. The NAR on Friday also revised its August index upward slightly to 82.4 from the previously estimated 82.3.

The NAR index is based on pending sales of existing homes, including single-family homes and condominiums. A home sale is pending when the contract has been signed but the transaction hasn’t closed. Pending sales typically close within one or two months of signing.

Pending home sales plummeted in May after the expiration of a government tax credit program but had been on the rise in July and August as rock-bottom mortgage rates and distressed property sales enticed buyers.

Source: Wall Street Journal