Existing-Home Sales Reach Decade High

Existing-home sales in January reached their fastest pace in nearly a decade, with all major regions except the Midwest posting gains last month, the National Association of REALTORS® reports.

Total existing-home sales—completed transactions that include single-family homes, townhomes, condos, and co-ops—rose 3.3 percent to a seasonally adjusted annual rate of 5.69 million in January. That’s 3.8 percent higher than a year ago and marks the strongest month since February 2007, according to the NAR chief economist Lawrence Yun.

The REALTORS® Affordability Distribution Curve and Score, a new measurement of homebuying activity created by NAR and realtor.com®, revealed that the combination of higher mortgage rates and home prices made active listings less affordable for households in more than half of all states last month.

Source: National Association of REALTORS®

 

Tiny Homes Are Making a Bigger Mark

Tiny houses are trending bigger nationwide. Interest in small-home living among the public has gained momentum since the recession, and made some Americans crave a simpler, less expensive way to live, according to U.S. News & World Report.

These small homes, often built on a trailer and portable, tend to be under 700 square feet. They tend to cost a fraction of a typical home, as low as $10,000 or up to $100,000, depending on the size.

TV shows are giving viewers a peek at this new type of living, especially on networks that HGTV that have shows featuring small-home living such as “Tiny House Hunters,” “Tiny House Nation,” and “Tiny House, Big Living.”

Source: “The Big Impact of Tiny Homes: How Little Houses Are Changing Real Estate,” U.S. News & World Report (Aug. 5, 2016)

Most Popular Exteriors on New Homes

Vinyl is the most widely used exterior on new single-family homes, according to the latest Census Bureau data. Vinyl (which includes vinyl-covered aluminum) was used for siding material on 27 percent of new homes nationwide in 2015, followed by stucco at 25 percent, brick or brick veneer at 22 percent, and fiber cement siding at 19 percent. Wood or wood products accounted for 5 percent.

The materials used can vary drastically from region to region. For example, stucco was the most popular siding material in the Pacific and Mountain regions, at 57 percent and 55 percent, respectively. In the East and West South Central regions, at least 55 percent of new single-family homes last year used brick or brick veneer.

View map from the National Association of Home Builders to see the most popular siding materials by region at: “Vinyl Is the Most Widely Used Exterior on New Homes,” National Association of Home Builders’ Eye on Housing blog (7/7/16)

Millennials Are Heading to Outside of Urban Areas

Millennials are leaving the city. While many millennials choose to live in urban areas as renters, when they’re ready to buy, they’re increasingly seeking single-family homes outside of urban areas, according to the 2016 National Association of REALTORS® Home Buyer and Seller study.

“The median age of a millennial home buyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family,” says Lawrence Yun, NAR’s chief economist. “Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out. Furthermore, limited inventory in millennials’ price range, minimal entry-level condo construction, and affordability pressures make buying in the city extremely difficult for most young households.”

The percentage of millennials purchasing a home in an urban or central city area fell to 17 percent in this year’s survey – down from 21 percent the year prior. 10 percent purchased a multifamily home, down from 15 percent a year ago.

Source: “Millennials More Likely to Buy in Suburban Areas,” RISMedia (March 9, 2016)

Landlords Say They’re Raising Prices Again

CEOs of the largest companies renting out single-family homes say they plan to raise rents up to 5.7 percent this year.  Investors are switching their focus from buying properties to optimizing the revenue from the thousands of properties they bought, taking advantage of the increased demand for rental homes, Bloomberg reports.

“In the 2015 rental season, we’re really seeing the ability to move rents,” David Singelyn, chief executive officer of American Homes 4 Rent—the largest publicly-traded single-family landlord, with about 35,000 homes—said at a recent conference.

“We are focusing aggressively on rent bumps,” says Stephen Schmitz, American Residential Properties CEO. “There’s a supply imbalance in some markets. The same thing that keeps occupancy high also drives rents.” Schmitz says they plan to bump up rental rates by 4 percent on renewals and up to 5.7 percent for new tenants.

Source: “U.S. Single-Family Landlords Are Raising Rents, CEOs Say,” Bloomberg (April 21, 2015)

Both Home Prices and Affordability on the Rise

The spring market will likely be a hotter one this year, as low interest rates and a healthier economy lure more home buyers to the marketplace.

“Interest rates below 4 percent, rising rents, and healthier local job markets are convincing more consumers to consider home ownership,” Chris Polychron, National Association of REALTORS® president, said in a recent news release showing fourth-quarter 2014 home prices moving up.

An increase in the national family median income (to $65,782) mixed with low interest rates slightly improved affordability in the fourth quarter compared to the previous quarter, NAR reports. Affordability improved despite the national median single-family home price moving up to $208,700 in the fourth quarter, an increase of 6 percent year-over-year.

“Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying,” says Lawrence Yun, NAR’s chief economist.   Please provide comments about your area!

Source: National Association of REALTORS®

New-Home Sales Surge Nearly 19%

After a sluggish start to 2014, new-home sales posted a strong rebound in May. Sales of newly built single-family homes soared to the highest rate since May 2008, jumping 18.6 percent last month, according to data released Tuesday by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“This increase is a welcome sign after a slow start to 2014,” says David Crowe, chief economist of the National Association of Home Builders. “As job creation continues, we can expect further release of pent-up demand and continued gradual growth in the housing recovery.”

Across the country, regions posted big gains in new-home sales, with the Northeast leading the pack. Sales of new-homes jumped 54.5 percent in the Northeast, 34 percent in the West, 14.2 percent in the South, and 1.4 percent in the Midwest.

Inventory levels mostly stayed flat, as builders continue to be cautious about overbuilding. The inventory of new homes for sale held steady at 189,000 units in May, representing a 4.5-month supply at the current sales pace.

Source: National Association of Home Builders

‘Built-to-Rent Homes’ Come Down Off Highs

The market for single-family homes that are built to be rentals is showing signs of declining from its post-recession highs, according to the National Association of Home Builders.

The market share for built-to-rent single-family homes stood at 3.3 percent in the first quarter of 2014. That remains higher than historical averages of 2.8 percent but has dropped from its 5.8 percent share a year ago, NAHB’s analysis shows.

During the recession, the share of built-to-rent homes soared while the foreclosure and financial crises forced more Americans to become renters.

But “it appears the market is returning to historical averages after recent peaks in this form of construction,” according to NAHB’s Eye on Housing blog.

About 20,000 built-to-rent homes were started nationwide in the last four quarters.

Source: “Single-Family Built for Rent Market Remains Off Recent Market Highs,” National Association of Home Builders’ Eye on Housing Blog (May 26, 2014)

Recently Released: ‘Most Popular New-Home Features’ from NAHB

Convenience, livability, and energy efficiency are top priorities in the construction of new homes this year, according to the National Association of Home Builders, which recently released the most popular features in new single-family homes in 2014. Builders nationwide were surveyed to find out what features they were most likely to include a single-family home this year.

Among the features that are most likely to be included in a typical single-family home are:

  • A walk-in closet in the master bedroom
  • “Low-e” windows
  • A laundry room
  • A great room

Also, builders report more attention to energy efficiency in the construction of new homes. For example, Energy-Star rated appliances, programmable thermostats, and Energy-Star rated windows also were among the top of the list for features most likely to be included.

“These features help make the home more comfortable and can save the home owner significant money over the long term,” according to NAHB. On a median per-square-foot basis, home owners spent 78 cents per square foot per year on electricity, while owners of new homes spent 65 cents per square foot per year, according to data from the 2009 American Housing Survey.

Source: National Association of Home Builders.

Uneven Recovery to Continue for 5 Years

The Demand Institute, a nonprofit think tank operated by The Conference Board and Nielsen, predicts an uneven recovery for the U.S. housing sector over the next five years. The study says it wont be until 2018 that the median price of single-family homes will be near the peak reached in 2006, before the housing crisis began. But some states will get there faster than others.

The study showed that among the 50 largest metros where housing prices are expected to appreciate between 2012 and 2018, the top five metros (Memphis, Tampa, Jacksonville, Milwaukee, and St. Louis) will see increases averaging 32 percent. The five cities projected to have the lowest price appreciation (Washington, D.C., Oklahoma City, Denver, Minneapolis, and Phoenix) will see gains of around 11 percent.

“The strength of the local housing market is among the most telling metrics that helps us assess community health and well-being,” says Louise Keely, chief research officer at the Demand Institute and co-author of the report. Researchers analyzed 2,200 cities and towns in the U.S. and conducted interviews with 10,000 consumers for the report.

The report notes that the double-digit price increases of the last two years were largely driven by investors buying distressed homes to meet rising rental demands. The report notes that a main driver of housing demand for the next five years will be the formation of new households, particularly as the economy strengthens and employment rises.

Source: “U.S. Housing Recovery Uneven Across Markets, Study Finds,” Reuters (Feb. 26, 2014)