Tag Archives: Government oversight

Jessica Lautz, Survey Research Manager

Jessica Lautz is the Survey Research Manager. Jessica analyzes data and writes annual studies such as the Member Profile, the Profile of Home Buyers and Sellers, and the Commercial Member Profile.

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Jessica Lautz, Survey Research Manager

Jessica Lautz is the Survey Research Manager. Jessica analyzes data and writes annual studies such as the Member Profile, the Profile of Home Buyers and Sellers, and the Commercial Member Profile.

Article source: http://feedproxy.google.com/~r/EconomistsOutlook/~3/OxT_OtiHmsQ/

Jessica Lautz, Survey Research Manager

Jessica Lautz is the Survey Research Manager. Jessica analyzes data and writes annual studies such as the Member Profile, the Profile of Home Buyers and Sellers, and the Commercial Member Profile.

Article source: http://feedproxy.google.com/~r/EconomistsOutlook/~3/OxT_OtiHmsQ/

At the national level, housing affordability is still very high thanks to lower mortgage rates in spite of higher home prices. What is affordability like in your market?

• In spite of reduced affordability from last month and last year’s near-record levels, the median income U.S. family earns almost double what is needed to purchase the median priced home, so affordability remains high.
• Housing affordability is down for the month of March in the U.S. as rising incomes were not enough to completely offset higher mortgage rates and home prices from February to March.
• From one year ago, affordability is down as lower mortgage rates and higher incomes have not completely offset home price gains.
• By region, affordability is down from one month ago in all regions except the Midwest, where there was no change. From one year ago, affordability is higher in the Northeast and Midwest and lower in the South and West as huge home price gains overwhelmed slightly lower mortgage rates.
• Check out the full data release here.
• The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principle and interest payment to income). See further details on the methodology and assumptions behind the calculation here.

Michael Hyman, Research Assistant

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Jed Smith, Managing Director, Quantitative Research

Jed Smith is Managing Director, Quantitative Research with the National Association of Realtors®. He has worked on real estate issues for the past 20 years, providing input on a variety of housing, commercial real estate, tax, and planning issues. Recently he has been involved in several international studies.

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With strong buyer demand and tight inventory, REALTORS® were generally upbeat about price trends in the coming months. Approximately 94 percent of REALTORS® who responded to the March REALTORS® Confidence Index (RCI) Survey expected constant or increasing prices in the next 12 months.

The graph below shows by state the median expected price changes within the next 12 months based on responses to the March 2013 Survey. Price expectations are most upbeat in the West region where inventory is very low, in Texas, Florida, and Georgia where prices are recovering, and in strong growth states such as Virginia.

What Does This Mean for REALTORS®?
After a relatively long period of declining housing markets we now see markets expected to expand—in both price and sales. Assuming that the economy continues its recovery, one can expect further price improvements this year.

Scholastica (Gay) Cororaton, Research Economist

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Jed Smith, Managing Director, Quantitative Research

Jed Smith is Managing Director, Quantitative Research with the National Association of Realtors®. He has worked on real estate issues for the past 20 years, providing input on a variety of housing, commercial real estate, tax, and planning issues. Recently he has been involved in several international studies.

Article source: http://feedproxy.google.com/~r/EconomistsOutlook/~3/_2JeshuTNaM/

Home buyers have emerged and home sales have been pushed higher. Existing home sales rose by 9 percent in 2012 and are higher still by another 9 percent in 2013 year-to-date. New home sales – always the more cyclical figure – increased 20 percent in 2012 and are up 5 percent in 2013 year-to-date. Many REALTORS® have indicated that sales transactions would be even higher if there were a greater inventory of homes.

While buying activity remains solidly higher, the nation’s homeownership rate continues to trend down. The latest homeownership rate of 65.0 percent in the first quarter of this year is the lowest since 1995. More home sales yet falling homeownership rate: what’s going on? Could it be the investors are eating up everything in sight?

The data clearly shows investor activity picking up since 2011, after having fallen big time from 2005 to 2010. Another reason for rising home sales yet falling homeownership rate is the legacy impact of foreclosures. When a first-time homebuyer buys a distressed property, there is no net increase in the number of homeowners, though a home sale has occurred. Currently, there are 1.6 million distressed homeowners still in the foreclosure process and nearly all will switch into being renters.

All the while the U.S. population is growing and households are being formed. Some of the new households will be renters while others will be first-time home buyers. Renters immediately show up in statistics as renters. The new homeowners however are getting neutralized by foreclosed homeowners. But there will likely be a bursting out of household formation over the next five years. That is almost a given because household formation growth had been deeply suppressed at half the normal rate when young adults moved in with their parents over the prior 5 years. It’s time for 20- and 30-somethings to move out of their parent’s basement. Steady job additions to the economy will facilitate that move.

What then is the outlook for home sales and homeownership? Home sales will continue to march forward. Single-digit gains this and next year. (REALTOR® net business revenue will rise in double-digit gains of 10 to 15 percent because of solid price gains.) The number of homeowners looks to rise somewhat by year end compared to the current level – my best guess at 300,000 net new homeowners. But the number of renters will rise faster – my best guess at 700,000 net new renters. Therefore, the homeownership rate will fall further to 64.7 percent sometime this year.

Lawrence Yun, Chief Economist

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

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In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s second update discusses productivity.

• Today’s data on worker productivity showed that we are off to a slow start in 2013. The data rose by only 0.7 percent in the first quarter, well short of historical average gains of around 2.0 percent. In fact, productivity gains have been extremely sluggish in the prior two years as well, with less than one percent gains.
• REALTOR® productivity, though not part of the government survey, is rising from the simple fact that more homes are selling with fewer REALTORS® in the business. Recall there were 1.4 million REALTOR® members at the peak of the bubble year. Now there are at roughly 1 million members today.
• Productivity is very important economic data to gauge the long-term standard of living of a country. Rapid productivity gains translate directly into big income gains and a rising standard of living. China, for example, is undergoing strong productivity gains. Interestingly, 65 percent of the Chinese agree that capitalism works well and should be promoted. By contrast, 55 percent of Americans have the same view. Only about 30 percent of the French have the similar view.
• Within 5 to 10 years an increasing number of economists believe Mexico could experience a productivity renaissance like that occurring in China, provided private property rights are well protected. If Mexico takes off economically then the number of Mexican immigrants coming into the U.S. will greatly taper off or even reverse with more people of Mexican heritage returns to Mexico.
• If U.S. productivity does not increase back up to the historical 2 percent growth rate then the current younger generation will only be mildly better off than their parents in term of economic purchasing power. If productivity halts to zero, which no one is forecasting, but just as a scenario, then the younger generation will experience a lower standard of living then their parents.

Lawrence Yun, Chief Economist

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

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