Category Archives: Real Estate

Pending Home Sales Lift Off in April to Over 10-Year High

WASHINGTON (May 26, 2016) — Pending home sales rose for the third consecutive month in April and reached their highest level in over a decade, according to the National Association of Realtors®. All major regions saw gains in contract activity last month except for the Midwest, which saw a meager decline.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, hiked up 5.1 percent to 116.3 in April from an upwardly revised 110.7 in March and is now 4.6 percent above April 2015 (111.2). After last month’s gain, the index has now increased year-over-year for 20 consecutive months.

Lawrence Yun, NAR chief economist, says vast gains in the South and West propelled pending sales in April to their highest level since February 2006 (117.4). “The ability to sign a contract on a home is slightly exceeding expectations this spring even with the affordability stresses and inventory squeezes affecting buyers in a number of markets,” he said. “The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market.”

On the topic of mortgage rates, which have remained below 4 percent in 16 of the past 17 months1, Yun says it remains to be seen how long they will stay this low. Along with rent growth, rising gas prices — and the fading effects of last year’s cheap oil on consumer prices — could edge up inflation and push rates higher. For now, he foresees mortgage rates continuing to hover around 4 percent in coming months, but inflation could potentially surprise the market and cause rates to increase suddenly.

Adds Yun, “Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search.”

Following the housing market’s best first quarter of existing-sales since 2007 (5.66 million)2 and a decent increase (1.7 percent) in April, Yun expects sales this year to climb above earlier estimates and be around 5.41 million, a 3.0 percent boost from 2015. After accelerating to 6.8 percent a year ago, national median existing-home price growth is forecast to slightly moderate to between 4 and 5 percent.

The PHSI in the Northeast climbed 1.2 percent to 98.2 in April, and is now 10.1 percent above a year ago. In the Midwest the index declined slightly (0.6 percent) to 112.9 in April, but is still 2.0 percent above April 2015.

Pending home sales in the South jumped 6.8 percent to an index of 133.9 in April and are 5.1 percent higher than last April. The index in the West soared 11.4 percent in April to 106.2, and is now 2.8 percent above a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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1 According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage has remained below 4 percent every month since December 2014 except for in July 2015 (4.05 percent).

2 Total existing-home sales, including single family and condo, were at a seasonally adjusted annual rate of 5.30 million during the first quarter of 2016.

* The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

NOTE: Existing-Home Sales for May will be reported June 22, and the next Pending Home Sales Index will be June 29. NAR’s second quarter Housing Opportunities and Market Experience (HOME) survey — originally scheduled for June 15 — will now be released on July 13; all release times are 10:00 a.m. ET.

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Contract Signings Hit 10-year High in April

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2016 Q1 Commercial Real Estate Market Survey

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Existing-Home Sales Rise in April for Second Straight Month

WASHINGTON (May 20, 2016) — Despite ongoing inventory shortages and faster price growth, existing-home sales sustained their recent momentum and moved higher for the second consecutive month, according to the National Association of Realtors®. A surge in sales in the Midwest and a decent increase in the Northeast offset smaller declines in the South and West.

Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.7 percent to a seasonally adjusted annual rate of 5.45 million in April from an upwardly revised 5.36 million in March. After last month’s gain, sales are now up 6.0 percent from April 2015.

Lawrence Yun, NAR chief economist, says April’s sales increase signals slowly building momentum for the housing market this spring. “Primarily driven by a convincing jump in the Midwest, where home prices are most affordable, sales activity overall was at a healthy pace last month as very low mortgage rates and modest seasonal inventory gains encouraged more households to search for and close on a home,” he said. “Except for in the West — where supply shortages and stark price growth are hampering buyers the most — sales are meaningfully higher than a year ago in much of the country.”

The median existing-home price2 for all housing types in April was $232,500, up 6.3 percent from April 2015 ($218,700). April’s price increase marks the 50th consecutive month of year-over-year gains.

Total housing inventory3 at the end of April increased 9.2 percent to 2.14 million existing homes available for sale, but is still 3.6 percent lower than a year ago (2.22 million). Unsold inventory is at a 4.7-month supply at the current sales pace, up from 4.4 months in March.  

“The temporary relief from mortgage rates currently near three-year lows has helped preserve housing affordability this spring, but there’s growing concern a number of buyers will be unable to find homes at affordable prices if wages don’t rise and price growth doesn’t slow,” adds Yun.   

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage fell from 3.69 percent in March to 3.61 percent in April, which is the lowest since May 2013 (3.54 percent). The average commitment rate for all of 2015 was 3.85 percent.

Properties typically stayed on the market for 39 days in April (47 days in March), which is unchanged from a year ago but the shortest duration since June 2015 (34 days). Short sales were on the market the longest at a median of 120 days in April, while foreclosures sold in 51 days and non-distressed homes took 37 days. Forty-five percent of homes sold in April were on the market for less than a month — the highest since June 2015 (47 percent).

“Looking ahead, with demand holding steady and supply levels still far from sufficient, the market for entry-level and mid-priced homes will likely continue to be the most competitive heading into the summer months,” says Yun.  

The share of first-time buyers was 32 percent in April, up from 30 percent both in March and a year ago. First-time buyers in all of 2015 also represented an average of 30 percent.

At last week’s 2016 REALTORS® Legislative Meetings Trade Expo, U.S. Housing and Urban Development Secretary Julian Castro announced beneficial changes to FHA condo rules, which could help many first-time buyers, are moving forward and are currently at the Office of Management and Budget for review.

“Secretary Castro’s update that the condo rule changes are in their final stages before implementation received great applause from Realtors® both at the forum and throughout the country,” said NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. “To ensure that purchasing a condo increasingly becomes a viable and affordable option for first-time buyers, NAR supports the ongoing efforts to eliminate unnecessary barriers holding back condo sales. We hope that progress on this condo rule means we’ll see some much-needed changes in the near future.”

All-cash sales were 24 percent of transactions in April, down from 25 percent in March and unchanged from a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in April (matching the lowest share since October 2015), down from 14 percent in both in March and a year ago. Sixty-nine percent of investors paid cash in April.

Distressed sales4 — foreclosures and short sales — declined for the second straight month to 7 percent in April, down from 8 percent last month and 10 percent a year ago. Five percent of April sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 17 percent below market value in April (16 percent in March), while short sales were discounted 10 percent (unchanged from March).

Single-family and Condo/Co-op Sales

Single-family home sales inched forward 0.6 percent to a seasonally adjusted annual rate of 4.81 million in April from 4.78 million in March, and are now 6.2 percent higher than the 4.53 million pace a year ago. The median existing single-family home price was $233,700 in April, up 6.2 percent from April 2015.

Existing condominium and co-op sales jumped 10.3 percent to a seasonally adjusted annual rate of 640,000 units in April from 580,000 in March, and are now 4.9 percent above April 2015 (610,000 units). The median existing condo price was $223,300 in April, which is 6.8 percent above a year ago.

Regional Breakdown

April existing-home sales in the Northeast climbed 2.8 percent to an annual rate of 740,000, and are now 17.5 percent above a year ago. The median price in the Northeast was $263,600, which is 4.1 percent above April 2015.

In the Midwest, existing-home sales soared 12.1 percent to an annual rate of 1.39 million in April, and are now 12.1 percent above April 2015. The median price in the Midwest was $184,200, up 7.7 percent from a year ago.

Existing-home sales in the South declined 2.7 percent to an annual rate of 2.19 million in April, but are still 4.3 percent above April 2015. The median price in the South was $202,800, up 6.5 percent from a year ago.

Existing-home sales in the West decreased 1.7 percent to an annual rate of 1.13 million in April, and are 3.4 percent lower than a year ago. The median price in the West was $335,000, which is 6.5 percent above April 2015.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE: For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.                    

1 Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample — about 40 percent of multiple listing service data each month — and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2 The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

3 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

4 Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at Realtor.org.

NOTE: NAR’s Pending Home Sales Index for April will be released May 26, and Existing-Home Sales for May will be released June 22; release times are 10:00 a.m. ET.body

Article source: http://feedproxy.google.com/~r/RealtororgResearchHeadlines/~3/h8JXXxFjXk4/existing-home-sales-rise-in-april-for-second-straight-month

April 2016 Existing-Home Sales

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NAR Member Profile

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NAR Member Survey Shows More, Younger Realtors® Entering the Industry

WASHINGTON (May 19, 2016) — The median age and years of experience of Realtors® has decreased as new and younger professionals enter the industry, according to the 2016 National Association of Realtors® Member Profile.

The survey’s results are representative of the nation’s nearly 1.2 million Realtors®; members of NAR account for about half of all active real estate licensees in the U.S. Realtors® go beyond state licensing requirements by subscribing to NAR’s Code of Ethics and standards of practice and committing to continuing education.

The typical member reported a median of 10 years of experience in real estate, down from 12 years in last year’s report. Realtors®’ median age also decreased from 57 in 2014 to 53 in 2015, the lowest it has been since 2008 when the median age was 52.

“The median age of Realtors® is younger than in the past because more people entered the real estate profession this year than in past years, with 20 percent of members reporting one year or less of experience” said NAR president Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. “NAR is excited to have  young, fresh perspectives enter the industry, and we are proud to offer resources for our younger members to advance and grow, such as the Young Professionals Network and ’30 Under 30′ recognition.”

In last year’s report, 41 percent of members were more than 60 years old, while only 2 percent were under age 30. This year, the percent of Realtors® over 60 years old dropped to 30 percent, and the number of those younger than 30 years rose to 5 percent. Thirteen percent of members who have two years or less experience are under 30 years of age.

New members also tend to be more diverse than experienced members; eighty-nine percent of Realtors® with 16 or more years of experience are white, compared to only 78 percent of those with two years or less experience.

The median gross income of Realtors® also fell last year, from $45,800 in 2014 to $39,200 in 2015; not surprising, given members’ income typically corresponds with experience. Those with 16 years or more of experience reported a median gross income of $73,400, up from $68,800 in 2014, while members with two years or less of experience had a median gross income of $8,500, a decrease from $9,100 last year.

For the third year in a row, Realtors® cited difficulty finding the right property, at 38 percent, as the most persistent challenge limiting potential buyers, beating out obtaining mortgage financing at 19 percent.

“Limited inventory continues to restrict buyers in many markets across the country,” said Lawrence Yun, NAR chief economist. “This is reflected in the number of transactions reported by members, which has remained the same at 11 transactions.”

However, while the number of transactions has remained the same, rising home prices in 2015 triggered the median brokerages sales volume to rise to $1.8 million from last year’s $1.7 million.

The typical Realtor® reported working 40 hours per week in 2015, in line with previous years. Sixty-seven percent of members specialize in residential brokerage, down from 82 percent. The most popular secondary specialization is relocation, 17 percent, and residential property management, 16 percent. Twenty-six percent of all Realtors® made more than $100,000 last year, while 26 percent made less than $10,000.

This year marks the first time members were asked about the use of drones in their business. While a majority of Realtors®, 56 percent, do not currently use drones, 18 percent indicated that they plan to in the future. Twelve percent reported that someone in their office uses drones, and 11 percent say that they hire a professional for their drone use.

When it comes to technology 93 percent said that their firm has a web presence. When communicating with clients, members say that email, telephone, and text messaging are used most frequently. Seventy percent of members reported using social media, an increase from 65 percent last year. Other technology that members report regularly using includes electronic contact and forms software, contact management software, and e-document preparation programs.

Thirty-eight percent of Realtors® reported receiving errors and omissions insurance for their firm making it the most commonly received benefit. Seventy percent of members were compensated under a percentage split-commission. Fifteen percent were compensated by a 100 percent commission, though that is more likely to apply to brokers, 21 percent, than agents, 11 percent.

Many Realtors® have had careers in other fields before entering real estate. The most common first careers reported are in management, business or finance, or sales and retail, both at 16 percent. Only four percent of members indicate that real estate was their first career. 

The marital status of Realtors® remained mostly consistent with last year’s survey; seventy percent of members are married, 15 percent are divorced, and 10 percent are single or never married.

Also in line with last year’s survey, 62 percent of all Realtors® are female. Among broker licensees, 56 percent are female, compared with sales agent licensees, where 66 percent are female.

More than eight out of 10 Realtors® own their primary residence. However, that number increases with age; the homeownership rate for Realtors® 60 or older is more than 90 percent. Thirty-one percent of Realtors® reported that they own residential property for investment, and 9 percent report owning at least one commercial property.

Ninety-three percent of Realtors® have some post-secondary education, with 30 percent having completed a bachelor’s degree and 12 percent having completed a graduate degree. Realtors® are also active in the political process with 94 percent reporting they are registered to vote, 89 percent voted in the last national election, and 77 percent reported that they voted in their local elections.

The 2016 National Association of Realtors® Member Profile is based on a survey of 150,024 members, which generated 10,194 usable responses, representing an adjusted response rate of 6.8 percent. Survey responses were weighted to be representative of state-level NAR membership. Income and transaction data are for 2015 while other data represent member characteristics in early 2016. The study can be ordered by calling 800-874-6500, or online at www.realtor.org/prodser.nsf/Research. The profile is free for credentialed media and costs $14.95 for NAR members and $149.95 for nonmembers.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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May 2016 Economic and Commercial Real Estate Outlook

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Lending Remains Largest Concern for Commercial Real Estate Market, Say Realtors®

WASHINGTON (May 13, 2016) — Realtors® specializing in commercial real estate expressed confidence in the continued recovery seen in the market but concern over the availability of commercial financing, during a commercial economic issues and trends forum at the 2016 REALTORS® Legislative Meetings Trade Expo.

National Association of Realtors® Chief Economist Lawrence Yun discussed the forces affecting commercial markets and said that while the overall market is seeing continued recovery, trepidation remains about the availability of financing for smaller commercial properties.

Clients of Realtors® who practice commercial real estate traditionally receive financing from smaller local or regional banks, many of which have slowed their lending as a result of the new financial regulations. When the audience was polled about their major concerns for 2016, lending was the number one issue by a wide margin.

“The big guys have access to big money, while those specializing in smaller transactions do not have access to those sources. The largest banks can handle the compliance and higher capital requirements, but the smaller banks have less resources to meet these new regulations,” said Yun.

Yun called for a relaxing of regulation on small financial institutions. “Smaller sized banks do not cause systemic risk; if a small bank goes under, it will not affect the entire market. They, and the businesses that depend on them, need regulatory relief,” he said.

Despite these restrictions, the smaller commercial market is experiencing steady recovery, and market fundamentals have seen improvement across most sectors. Industrial and apartment sectors are seeing vacancy rates below pre-recession numbers, and the office sector is almost at its pre-recession level. However, recovery in the retail sector has remained sluggish, with vacancies still high and rents slow to rise.

“People are no longer walking around the city to buy things, they are going online and having their purchases delivered,” said Yun. “This has kept the retail sector from fully recovering, leaving it as the only ‘soft’ sector in commercial real estate.” 

Mark Vitner, managing director and senior economist for Wells Fargo, spoke about the effect of the global economy on commercial markets. “The global outlook is so bad that Argentina and New Zealand are some of the few bright spots in the global economy,” said Vitner. “Devaluation of Chinese currency has had an enormous impact on the American economy.  China accounts for 70 percent of the U.S.’ growth in exports, and the adverse effect it has had on the economies of our other trading partners has led to a slowdown in their economic growth.”

Vitner insists, however, that things could be much worse. “We may be seeing gross domestic product growth underperforming at 2 percent; however, Europe and Japan are seeing no growth, and many other countries have fallen into a recession,” he said. “Comparatively, the U.S. is performing well. As Jonny Cash said, ‘We are the cleanest dirty shirt in the closet.'”

For more information on the commercial real estate market, visit realtor.org/commercial.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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Millennials Changing Face of America, Heavily Impacting Homeownership, Say Experts

WASHINGTON (May 13, 2016) — Millennials are bucking trends, changing the landscape of America, and sharply different from previous generations in many different ways. One of the most visible and consequential ways is through millennial homeownership numbers, according to experts on generational trends and homeownership presenting at the 2016 REALTORS® Legislative Meetings Trade Expo.

While all generations have their own hardships, opportunities and defining features, millennials are coming of age in a time of deep demographic transformation, experts say. In a session titled “The Minds of Millennials—Motivation, Mobility and Making  Home,” moderated by National Association of Realtors® Chief Economist Lawrence Yun, panelists discussed what the shift means for the American way of life.

“America in the near future will look nothing like the America of the past,” said Paul Taylor, executive vice president of the Pew Research Center and author of the book “The Next America: Boomers, Millennials, and the Looming Generational Showdown”. “These shifts are creating big generation gaps that will put stress on our families, our politics, our pocketbooks, our entitlements programs and perhaps our social cohesion.”

Millennials, Taylor said, are different from their parents and grandparents in ways that are already impacting all aspects of life. For example, he noted that millennials (those born after 1980) are less religiously affiliated and slow to marry and have kids. They grew up with cell phones and on social networking sites while also obtaining a high level of education, but are still struggling financially because of the economy. Politically, half of the generation identifies as independent, more than ever have before. While seemingly small differences, these characteristics have very real effects on homeownership. After all, he noted, 39 percent of millennials are still living with a parent or relative, citing the record share of young households holding student debt.

Jessica Lautz, managing director of survey research at NAR, agreed that homeownership among millennials is taking a hit. Student loan debt, flat wages, rising home prices (making it harder to get into the homeownership game) and rising rents (complicating the saving process), are delaying milestones such as marrying and having children – major events in life that often cause young people to buy a home.

The real estate industry is already feeling the impact of these factors on millennials in regards to home buying.  First-time buyers have in the past accounted for about 40 percent of homebuyers; however, NAR data show that number has trended downward since 2011 and currently sits at 32 percent. And while married couples are the largest group of buyers (currently 67 percent of all buyers), single females make up the second largest group of buyers, and that share has also dropped from 22 percent in 2006 to 15 percent in 2015.

Still, one big thing hasn’t changed, according to Lautz. “Even with all these statistics showing how things have changed for millennials and the fact that they are worse off financially than previous generations had been, the median age of first-time buyers has stayed relatively unchanged at 31,” Lautz said. “This means that they are ready and willing to buy if they can in fact break into the market. It’s getting more difficult to get to that point, but the desire to do so hasn’t changed.”

And while the path to homeownership is harder now for millennials carrying student debt, dealing with rising rents, and experiencing stagnant wages, NAR research shows that millennials still see the value in owning and home and once they are ready, they are looking to a real estate agent in higher numbers than ever before.

“We are seeing that millennials are using agents at much higher rates,” Lautz said. “You might assume that they would prefer to take on a purchase or sell on their own, being raised in the digital age, but instead, we have found that these buyers and sellers want someone to help them through the process, not unlike the way their parents have helped them through their young adult life. Not having been through the process before, they rely on real estate agents to get them through the competitive market and to the finish line.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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Existing-Home Sales on Course for Best Year since 2006, Student Loan Debt Slowing Prospective Buyers

WASHINGTON (May 12, 2016) – Relentless supply constraints and home price growth outpacing wages are testing the patience of homebuyers this year, but existing-home sales are still on track to come in at their highest pace since 2006, according to an economic forecast forum here at the 2016 REALTORS® Legislative Meetings Trade Expo

Lawrence Yun, chief economist of the National Association of Realtors®, presented his midyear economic and housing forecast and was joined onstage by U.S. Sen. Elizabeth Warren (D-Mass.). Senator Warren explained with purpose the growing burden repaying student loan debt is having on young adults, the housing market and the overall U.S. economy. 

According to Yun, monthly existing-home sales were uneven in the first quarter but still came in at a seasonally adjusted annual rate slightly higher (5.29 million) than last year’s overall annual pace (5.26 million). Demand has mostly remained strong – especially in the top job-producing metro areas – and is being upheld by mortgage rates near three-year lows and the 14 million jobs gained since 2010. 

“The housing market continues to expand at a moderate pace in spite of the fact that home prices are rising too fast in some areas because of insufficient supply fueled by the grossly inadequate number of new single-family homes being constructed,” said Yun. “The good news is that pending sales in recent months have remained stable and should support a modest gain in home sales heading into the summer.”  

Yun forecasts existing sales to finish 2016 at a pace of around 5.40 million – the best year since 2006 (6.48 million). After accelerating to 6.8 percent in 2015, the national median existing-home price is forecast slightly moderate to between 4 and 5 percent this year. 

During her remarks, Senator Warren applauded Realtors® for their role in helping build America’s middle class through homeownership. Unfortunately, Warren explained, this path to economic security is being threatened by the seven out of 10 college graduates that need to borrow thousands of dollars to attend college and then spend countless years afterwards repaying the debt at high interest rates.

“Student debt is crushing young people, it’s hurting the nation’s economy and delaying the opportunity for many to buy their first home,” said Warren, who cited NAR’s 2015 Profile of Home Buyers and Sellers data on the percent share of first-time buyers remaining at its lowest point in nearly three decades (32 percent). “Every monthly payment going to reducing their student debt could instead be money going towards saving for a down payment on a house.”

On the topic of first-time buyers, Yun remarked that their ongoing absence is the missing link to a full housing recovery; this is, amazingly, during a time when conditions are ripe for a larger share of them buying homes. Job growth has been strong for multiple years, rents have soared in many areas and mortgage rates are historically low. Unfortunately, a multitude of factors such as increasing home prices amidst flat wage growth, the lack of available starter homes and repaying student loan debt is thwarting many young would-be buyers. 

“Spectacularly low mortgage rates mean today’s prospective homebuyers are the luckiest in a generation but the unluckiest in actually becoming homeowners because of the roadblocks hampering their ability to buy,” added Yun. 

Warren concluded her remarks by urging Congress to pass the “Bank on Students Emergency Loan Refinancing Act,” which would give a much-needed break to student debt borrowers by giving them a chance to refinance their federal and private student loan debt at the same low rates offered to new borrowers in the federal student loan program. 

Yun on inventory shortages, home prices and unspectacular economic growth

Although contract signings nationally have held steady for several consecutive months, Yun said regional differences are beginning to appear in places where home prices have appreciated the fastest – specifically in parts of the South and in the West. Although data from the Realtors® Confidence Index shows that home buyer traffic is still strong, demand is somewhat weakening from a lack of available inventory and the subsequent affordability pressures it’s putting on a large segment of would-be buyers.  

“Homebuilders need to significantly ramp up production so that more existing homeowners can trade-up and list their home for sale,” added Yun. “Otherwise, inventory shortages will continue and demand could soften even more in some areas as a greater number of buyers are unable to find homes at affordable prices.” 

Ultimately, Yun foresees housing starts ending up higher than last year (1.1 million), but still below the 1.5 million necessary each year to keep up with current demand. New home sales are likely to total 540,000 this year, which is only a little more than half the rate from the pre-boom years in the early 2000s. 

Yun said rents, which rose last year at a seven-year high, will be a big driver of future inflation, along with gas prices, and will ultimately steer the direction of mortgage rates. If rent growth continues at its current pace, inflation will be stronger and push rates higher. Slowing rent growth would have the opposite effect by keeping a lid on inflation and holding rates at a very manageable level. For now, he foresees mortgage rates continuing to hover around 4 percent in coming months before gradually moving upward into next year.

Despite solid job gains in the past few years, Yun stated that economic growth continues to be unimpressive. The rising U.S. dollar against other foreign currencies and the slowing global economy since late last year would likely be causing our economy to teeter on the edge of a recession if it weren’t for the boost from the housing component of Gross Domestic Product. Through the rest of the year, he expects GDP to register at only 1.6 percent and be primarily kept afloat by housing and consumer spending. 

Even with underlying challenges, Yun explained that the housing market has come a long way since the depths of the recession. Mortgage delinquency rates – especially for Veteran Affairs mortgages – have subsided to near pre-crisis levels and home prices have rebounded substantially in a majority of metro areas, which in turn has boosted household wealth for many homeowners. 

“The economy should still expand enough to continue the current pace of job creation, which will in turn lead to slow, but steady sales gains for the housing market,” concluded Yun. 

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries. 

# # #

 

NOTE:  Existing-Home Sales for April will be released May 20, and the Pending Home Sales Index for April will be released May 26; release times are 10:00 a.m. ET.

Article source: http://feedproxy.google.com/~r/RealtororgResearchHeadlines/~3/aHJQRQEZr6Y/existing-home-sales-on-course-for-best-year-since-2006-student-loan-debt-slowing-prospective-buyers

May 2016 Economic and Housing Market Outlook

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REALTOR® University Speaker Series Presentation: The New American Suburb: Poverty, Race, and the Economic Crisis

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HUD Secretary Castro, Panelists Discuss Housing Opportunities for Young Adults Repaying Student Debt

WASHINGTON (May 10, 2016) — Struggles exist for many young adults trying to become homeowners, and the burden of repaying their student loan debt is in part delaying their ability to buy, according to speakers at a regulatory issues forum on student debt and homeownership at the 2016 REALTORS® Legislative Meetings Trade Expo.

The high-profile session discussing the impact student loan debt is having on young households’ ability to purchase homes was keynoted by U.S. Housing and Urban Development Secretary Julián Castro. During his remarks, Secretary Castro announced some of the regulatory changes coming soon to ensure housing opportunities exist for young men and women – many of whom are currently repaying the loans they borrowed to earn a college degree.  

Secretary Castro began his address by saying the prescription to the American Dream has always been working hard, saving your money and investing in yourself, often by getting a great education. What has changed in recent times is that the third step – getting a great education – is more expensive than ever.

According to Castro, HUD is committed to working with its partners across the administration and in the housing community to explore additional changes that can help more Americans purchase a home. That’s why last November, Federal Housing Administration Principal Deputy Assistant Secretary Ed Golding announced changes to condo rules that would address a lengthy and complex recertification process, owner-occupancy requirements, and limits on the types of property insurance that FHA considers acceptable coverage. Secretary Castro announced that the proposed condo rule has left the HUD building and is at the Office of Management and Budget for review.

“Today’s exciting news about the big changes coming to condos are a long-fought win for Realtors®, and we’re eager to see it come to fruition,” said NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. “Realtors® know that condos are an important option for buyers, especially for first-time buyers looking for affordable options in the marketplace.”

Secretary Castro concluded, “Realtors® help make the dream of homeownership for so many Americans a reality, and HUD is committed to partnering with them to ensure that the hard-won progress we’re seeing in our housing market continues to grow for many years to come.    

A panel discussion followed consisting of Rohit Chopra, a senior official at the U.S. Department of Education; Meta Brown, senior economist at the Federal Reserve Bank of New York; NAR’s Jessica Lautz, managing director of survey research; and Mabel Guzman, chairwoman of NAR’s student loan debt work group and a Realtor® from Chicago-based real estate brokerage @Properties. 

The panel participants agreed that in addition to affordability concerns, inventory shortages and lifestyle factors such as marrying later in life and having to repay student loan debt are burdening a segment of creditworthy buyers by making it more difficult to save for a down payment.

Discussing some of the ways the Education Department is working to address student loan debt, Chopra said income-based repayment options and holding student loan servicers more accountable during the repayment process will go a long way to ensuring that relief exists for those burdened by their debt. “We need to make sure the pillars of the American Dream of graduating from college and owning a home go together – and not compete with each other,” he said.

Sharing research from the New York Fed, Brown explained just how much student debt has defied the current business cycle of the past 10 years. Non-mortgage debt balances, such as debt from auto loans and credit cards, experienced a period of decline during the immediate aftermath of the Great Recession and have how either flatlined or rebounded slowly in recent years. The exception during this time has been student debt balances, which have ballooned from over $300 billion at the end of 2004 to over $1.2 trillion debt today.

Brown concluded that carrying high balances of student debt is likely leading to a growing share of young student borrowers retreating from the housing market and ultimately having to co-reside with their parents.  

Pointing to NAR survey data of actual homebuyers and renters, Lautz said even with the numerous obstacles they face, millennials do make up the largest share of buyers among all generations, and over 90 percent of them currently renting have indicated a desire to become homeowners in the future.  

“With home prices and rents on the rise, saving for the down payment is a challenge for many would-be buyers,” said Lautz. “Unfortunately, among other factors, repaying student debt is delaying a typical individuals’ path to homeownership by roughly five years.”

The final speaker, Guzman, said that in addition to Congress passing legislation that helps ease borrowers’ debt burden, Realtors® can play a big role by working with their young clients at the beginning stages of their housing needs, particularly during the leasing process when renting their first place.

“Realtors® can be a resourceful advocate for their young clients repaying student debt by educating them about their housing options and pointing them to credible resources, such as the Consumer Financial Protection Bureau’s information on student debt,” added Guzman. “The urge to be a homeowner is not lost among young adults, and we can all can work together early in the process to make sure they’re able to buy when they’re ready.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

# # #

Article source: http://feedproxy.google.com/~r/RealtororgResearchHeadlines/~3/HzCTUQE8ZFk/hud-secretary-castro-panelists-discuss-housing-opportunities-for-young-adults-repaying-student-debt

RealScout Joins REach® Accelerator Class of 2016

WASHINGTON (May 11, 2016) – Second Century Ventures, the strategic investment arm of the National Association of Realtors® has accepted RealScout, an agent-branded web and mobile platform, as the eighth company in its 2016 REach® accelerator class. Last month, SCV announced seven other companies had been chosen to be part of the fourth class.

The REach® accelerator program helps introduce innovative technology companies to the real estate marketplace; as a part of the program, RealScout will receive mentorship from top real estate moguls, venture capitalists and other tech entrepreneurs along with extensive education from the leaders and members of America’s largest trade association to help navigate the complex real estate marketplace.

“We are honored and excited to be chosen for REach®’s fourth accelerator class and for the opportunity to join forces with NAR and SCV,” said RealScout CEO Andrew Flachner. “REach® provides a level of access within the real estate industry that is unmatched by any other accelerator program, and the resources and support it provides will be invaluable as we continue to grow as a company.”

RealScout’s agent-branded web and mobile platform helps real estate agents better collaborate with their clients. It allows agents to track a client’s search history, recommend listings, curate search filters for them and set up listing alerts. RealScout also aggregates and analyzes hundreds of data points for each listing letting agents and their clients search for homes using traditionally difficult-to-search-for criteria such as large backyards or remodeled kitchens, as well as their closeness to neighborhood amenities like grocery stores, parks or coffee shops.

“This year’s REach® class is made up of some incredible companies, and we are excited to introduce RealScout to our more than million NAR members,” said NAR CEO and SCV President Dale Stinton. “RealScout’s industry first online home search and collaboration platform provides brokers and agents the competitive advantage they need in today’s rapidly changing real estate market. RealScout combines its enriched MLS data with knowledge of a real estate professional to help keep the Realtor® at the center of the transaction.”

Throughout the eight-month accelerator program, RealScout and the other seven REach® class companies will be provided mentoring and education. The organizations can expect significant results, as past classes have on average doubled their customer bases and jointly raised more than $40 million in financing during and after the program.

About Second Century Ventures

            Second Century Ventures (SCV) is an early-stage technology fund, backed by the National Association of Realtors®, that leverages the association’s 1 million members and an unparalleled network of executives within real estate and adjacent industries. SCV systematically launches its portfolio companies into the world’s largest industries including real estate, financial services, banking, home services, and insurance. SCV seeks to define and deliver the future of the world’s largest industries by being a catalyst for new technologies, new opportunities, and new talent.

About National Association of Realtors®

            The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

# # #

Article source: http://feedproxy.google.com/~r/RealtororgResearchHeadlines/~3/JlKWyzdR2MA/realscout-joins-reach-accelerator-class-of-2016

REALTOR® University Speaker Series Presentation: The Effect of Student Loans on Access to Homeownership

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The Effect of Student Debt on Access to Homeownership

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April 2016 Foot Traffic

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The New American Suburb: Poverty, Race, and the Economic Crisis

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Survey of Mortgage Originators, First Quarter 2016

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Metro Home Prices Maintain Steadfast Growth in First Quarter

WASHINGTON (May 9, 2016) — An uptick in sales activity amidst meager supply levels upheld the trend of unwavering price gains in an overwhelming majority of metro areas during the first quarter of the year, according to the latest quarterly report by the National Association of Realtors®.

The median existing single-family home price increased in 87 percent of measured markets, with 154 out of 178 metropolitan statistical areas1 (MSAs) showing gains based on closed sales in the first quarter compared with the first quarter of 2015. Twenty-four areas (13 percent) recorded lower median prices from a year earlier.

There were more rising markets in the first quarter compared to the fourth quarter of 2015, when price gains were recorded in 81 percent of metro areas. Twenty-eight metro areas in the first quarter (16 percent) experienced double-digit increases – a slight decrease from the 30 metro areas in the fourth quarter of 2015; fifty-one metro areas (28 percent) experienced double-digit increases in the first quarter of last year.

Lawrence Yun, NAR chief economist, says home prices chugged along at a robust pace in most metro areas during the first three months of 2016. “The solid run of sustained job creation and attractive mortgage rates below 4 percent spurred steady demand for home purchases in many local markets,” he said. “Unfortunately, sales were somewhat subdued by supply and demand imbalances and broadly rising prices above wage growth. As a result, the path to homeownership so far this year remains strenuous for a segment of prospective buyers in the most competitive areas.”

The national median existing single-family home price in the first quarter was $217,600, up 6.3 percent from the first quarter of 2015 ($204,700). The median price during the fourth quarter of 2015 increased 6.7 percent from the fourth quarter of 2014.

Total existing-home sales2, including single family and condo, rose 1.7 percent to a seasonally adjusted annual rate of 5.29 million in the first quarter from 5.20 million in the fourth quarter of 2015, and are 4.8 percent higher than the 5.05 million pace during the first quarter of 2015.

“In spite of deficient supply levels, stock market volatility and the paltry economic growth seen so far this year, the housing market did show resilience and had its best first quarter of existing-sales since 2007 (5.66 million),” adds Yun. “The demand for buying is there, but unless the stock of new and existing-homes for sale increases significantly – especially in several markets in the West – the housing market will struggle to reach its full potential.”

At the end of the first quarter, there were 1.98 million existing homes available for sale3, which was below the 2.01 million homes for sale at the end of the first quarter in 2015. The average supply during the first quarter was 4.3 months – down from 4.6 months a year ago.

Despite a small increase in the national family median income ($68,431)4, climbing home prices and slightly higher mortgage rates caused affordability to decline in the first quarter compared to the first quarter of last year. To purchase a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $47,819, a 10 percent down payment would require an income of $45,302, and $40,268 would be needed for a 20 percent down payment.

“Current homeowners in many metro areas – especially those who purchased a home immediately after the downturn – have enjoyed a sizeable boost in housing equity and household wealth in recent years,” adds Yun. “At a time of stagnant wage growth and mounting rent increases, the same cannot be said for renters. Their inability to reach the market because of affordability and supply restrictions is contributing to rising wealth inequality in the U.S.”

The five most expensive housing markets in the first quarter were the San Jose, Calif., metro area, where the median existing single-family price was $970,000; San Francisco, $770,300; Honolulu, $721,400; Anaheim-Santa Ana, Calif., $713,700; and San Diego, $554,300.

The five lowest-cost metro areas in the first quarter were Cumberland, Md., $67,400; Youngstown-Warren-Boardman, Ohio, $77,500; Decatur, Ill., $83,300; Wichita Falls, Texas, $95,200, and Rockford, Ill., $95,800.

Metro area condominium and cooperative prices – covering changes in 60 metro areas – showed the national median existing-condo price was $204,700 in the first quarter, up 5.8 percent from the first quarter of 2015 ($193,500). Forty-four metro areas (73 percent) showed gains in their median condo price from a year ago; 16 areas had declines.

NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida, says buyer foot traffic has been strong throughout the spring. “Especially in the top job producing metro areas, Realtors® are reporting a steady stream of interested buyers either in the early stages of the home search or currently ready to make a purchase,” he said. “Buyers will need to remain in close communication with a Realtor® this spring and be prepared to act fast when a home in their price range comes along. Without much newly constructed housing stock coming onto the market, existing-homes competitively priced in many areas are going under contract very quickly.”

Regional Breakdown

Total existing-home sales in the Northeast decreased 4.1 percent in the first quarter but are 11.2 percent above the first quarter of 2015. The median existing single-family home price in the Northeast was $249,400 in the first quarter, up 1.8 percent from a year ago.

In the Midwest, existing-home sales were unchanged in the first quarter (compared to the fourth quarter) but are 6.1 percent higher than a year ago. The median existing single-family home price in the Midwest increased 7.3 percent to $167,900 in the first quarter from the same quarter a year ago.

Existing-home sales in the South rose 5.2 percent in the first quarter and are 3.6 percent higher than the first quarter of 2015. The median existing single-family home price in the South was $192,100 in the first quarter, 5.8 percent above a year earlier.

In the West, existing-home sales climbed 0.9 percent in the first quarter and are 2.1 percent above a year ago. The median existing single-family home price in the West increased 7.1 percent to $315,900 in the first quarter from the first quarter of 2015.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1.1 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE: NAR releases quarterly median single-family price data for approximately 170 Metropolitan Statistical Areas (MSAs). In some cases the MSA prices may not coincide with data released by state and local Realtor® associations. Any discrepancy may be due to differences in geographic coverage, product mix, and timing. In the event of discrepancies, Realtors® are advised that for business purposes, local data from their association may be more relevant.

Data tables for MSA home prices (single family and condo) are posted at http://www.realtor.org/topics/metropolitan-median-area-prices-and-affordability. If insufficient data is reported for a MSA in particular quarter, it is listed as N/A. For areas not covered in the tables, please contact the local association of Realtors®.

1 Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. NAR adheres to the OMB definitions, although in some areas an exact match is not possible from the available data. A list of counties included in MSA definitions is available at: http://www.census.gov/population/estimates/metro-city/List4.txt.

Regional median home prices are from a separate sampling that includes rural areas and portions of some smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.

Median price measurement reflects the types of homes that are selling during the quarter and can be skewed at times by changes in the sales mix. For example, changes in the level of distressed sales, which are heavily discounted, can vary notably in given markets and may affect percentage comparisons. Annual price measures generally smooth out any quarterly swings.

NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series dates back to 1989.

Because there is a concentration of condos in high-cost metro areas, the national median condo price often is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. As the reporting sample expands in the future, additional areas will be included in the condo price report.

2 The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co-operative housing.

Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.

3 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

4 Income figures are rounded to the nearest hundred, based on NAR modeling of Census data. Qualifying income requirements are determined using several scenarios on downpayment percentages and assume 25 percent of gross income devoted to mortgage principal and interest at a mortgage interest rate of 4.0%.

NOTE: Existing-Home Sales for April will be released May 20, and the Pending Home Sales Index for April will be released May 26; release times are 10:00 a.m. ET.

Article source: http://feedproxy.google.com/~r/RealtororgResearchHeadlines/~3/TZoRFbdFDzg/metro-home-prices-maintain-steadfast-growth-in-first-quarter

The Federal Reserve and the Real Estate Market

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NAR Survey : Active Military Homebuyers Purchase at Younger Ages, Buy Larger and More Expensive Homes

WASHINGTON (May 3, 2016) – Differences in household demographics and affordable financing options spur homebuying demand for young active-service military members, causing them to significantly outpace the share of non-military homebuyers under the age of 35, according to the first-ever 2016 Veterans Active Military Home Buyers and Sellers Profile, which evaluates the differences of recent active-service and veteran home buyers and sellers1 compared to those who’ve never served. The survey also found that while nearly all veteran and non-military buyers and sellers use an agent, usage is practically universal among active-service military members.

NAR’s survey gathered greater insight into how each population of buyers and sellers differs and is similar to those who have never served in the military. Of all homebuyers, 18 percent identified as veterans and three percent as active-military. Of all home sellers, 21 percent identified as veterans and one percent as active-military.

The results revealed quite a few contrasts between active-service military buyers and buyers who’ve never served. At a median age of 34 years old, the typical active-service buyer was a lot younger than non-military buyers (40 years old) and was more likely to be married and have multiple children living in their household. As a result, they typically bought a larger home that cost more than those purchased by both non-military buyers and veterans. 

Lawrence Yun, NAR chief economist, says young active-service buyers (ages 18-35) bought homes at a far greater rate (51 percent) than non-military buyers (34 percent). “Despite having a lower median income ($76,800), more stable job security and no down payment financing options give aspiring homeowners in the military a deserving advantage over their civilian peers,” he said. “Furthermore, their tendencies to marry and raise a family at an earlier age and carry less student debt make buying a home a more desirable and achievable option.”

Veterans Affairs loans – which offer over 100 percent financing for veteran and active-service homebuyers – were the most popular loan type for active-service and veteran buyers, leading to the majority of active-service buyers financing their entire home purchase and veterans putting down a median down payment of 5 percent. For non-military buyers, the median down payment was 11 percent. 

Adds Yun, “Current data shows that VA loans perform remarkably well and are a safe and affordable choice. Their current seriously delinquent and homes in foreclosure rate is 2.78 percent versus 3.44 percent for non-VA loans.” 2

A place to call home is often times one of the few constants for the families of the brave men and women defending our country, said NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. “That’s why it’s so important to ensure that homeownership opportunities and affordable financing options exist for qualified military personnel, veterans and their families.”

With the ability to obtain a VA loan, only five percent of veterans and three percent of active-service buyers said saving for a down payment was the most difficult step. Of those, only four percent of veterans and 13 percent of active-service buyers said student loan debt delayed saving. Sixty-two percent of veterans cited having other types of debt and 43 percent of active-service military referenced credit card debt.

While a larger share of active-service military buyers had student loan debt compared to non-military buyers and veterans, their debt balances were typically lower. Among active-service members, 37 percent had student loan debt under $10,000 compared to 21 percent for those who’ve never served.

Active-service buyers prefer large single-family homes  

The median income of veteran and active-service member homebuyers in the survey was slightly lower than buyers who’ve never served in the military, which was $86,500. Active-service buyers typically bought a 2,170-square-foot home that cost more ($226,000) than those purchased by non-military buyers and veterans. Veteran buyers had a median income of $84,000, and they typically bought a 1,980-square-foot home costing $220,000.

Mirroring the general population of buyers, over 80 percent of both veterans and active-service buyers purchased a single-family home, with those currently serving purchasing single-family homes at the highest rate (87 percent).

The primary reason for the home purchase for active-service military was job relocation, followed closely by the desire to own a home of their own. Compared to non-military buyers, veterans were more likely to want to be closer to friends and family or moving for retirement.

Increased mobility means active-service and veteran buyers and sellers rely on real estate agents

Veterans and active-service buyers purchased a home a lot further away from their previous residence (at 75 miles and 28 miles, respectively) than buyers who never served in the military (10 miles). Among the biggest factors influencing neighborhood choice, veterans were most influenced by the quality of the neighborhood, while convenience to their job was desired the most by active-service members. 

While nearly all buyers predominantly used the Internet and a real estate agent during their home search, active-duty buyers used a real estate agent at an even higher rate (95 percent versus 88 percent for non-military buyers). As a group, they were also most likely to use mobile or tablet search engines and relocation companies during their search.

“Many Realtors® are veterans themselves, who understand the unique housing needs of those serving our country,” says Salomone. “Whether it’s relocating to a completely new area across the country or needing to sell their home in a short timeframe, Realtors® are committed to helping active-service members and veterans succeed in their homeownership goals.”

Some of the characteristics of active-service sellers differed from non-military sellers. They were younger, far more likely to have multiple children living in their household and sold a home in a suburban area at a far higher rate. Additionally, the use of an agent was highest for active-service military sellers (94 percent), who – likely dealing with relocating to a new area in a short timeframe – cited both wanting help marketing the home to potential buyers and help negotiating and dealing with buyers at a far higher rate than non-military sellers and veterans. Eighty-nine percent of veterans used an agent, on par with non-military sellers (90 percent).

The most commonly cited reason for owners selling their home varied. For non-military sellers, the most commonly cited reason for selling their home was that it was too small (18 percent), while the most common reason cited by veterans was to be closer to friends and family (23 percent). Not surprisingly, job relocation for active-service military sellers was the most common reason for selling (43 percent).

NAR is committed to educating more Realtors® about working with current and former military service members through its “Military Relocation Professional” certification program. This educational initiative available to Realtors® offers insights into finding housing solutions that best suit the needs of current and former military members while taking full advantage of their military benefits. To date, over 6,800 Realtors® have earned the certification.

In July 2015, NAR mailed out a 128-question survey using a random sample weighted to be representative of sales on a geographic basis to 94,971 recent home buyers. The recent home buyers had to have purchased a primary residence home between July of 2014 and June of 2015. A total of 6,406 responses were received from primary residence buyers. After accounting for undeliverable questionnaires, the survey had an adjusted response rate of 6.7 percent. Eighteen percent of recent home buyers are veterans and three percent are active-duty service members. All information is characteristic of the 12-month period ending in June 2015 with the exception of income data, which are for 2014.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1In the survey, NAR asked the following to determine veteran and active-duty service: “Are you or your spouse or partner currently: 1) an active-duty service member; 2) a veterans; or 3) neither.”

2According to the Mortgage Bankers Association’s National Delinquency Survey.

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Increasing the Access to Credit and Affordable Rental Units for Low Income Housing

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REALTOR® University Speaker Series Presentation: Increasing the Access to Credit and Affordable Rental Units for Low Income Housing

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REALTOR® University Speaker Series Presentation: The Livability Index: Great Neighborhoods for All Ages

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The Livability Index: Great Neighborhoods for All Ages

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Veterans and Active Military Home Buyers and Sellers

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NAR Survey: Active Military Homebuyers Purchase at Younger Ages, Buy Larger and More Expensive Homes

WASHINGTON (May 3, 2016) – Differences in household demographics and affordable financing options spur homebuying demand for young active-service military members, causing them to significantly outpace the share of non-military homebuyers under the age of 35, according to the first-ever 2016 Veterans Active Military Home Buyers and Sellers Profile, which evaluates the differences of recent active-service and veteran home buyers and sellers1 compared to those who’ve never served. The survey also found that while nearly all veteran and non-military buyers and sellers use an agent, usage is practically universal among active-service military members.

NAR’s survey gathered greater insight into how each population of buyers and sellers differs and is similar to those who have never served in the military. Of all homebuyers, 18 percent identified as veterans and three percent as active-military. Of all home sellers, 21 percent identified as veterans and one percent as active-military.

The results revealed quite a few contrasts between active-service military buyers and buyers who’ve never served. At a median age of 34 years old, the typical active-service buyer was a lot younger than non-military buyers (40 years old) and was more likely to be married and have multiple children living in their household. As a result, they typically bought a larger home that cost more than those purchased by both non-military buyers and veterans. 

Lawrence Yun, NAR chief economist, says young active-service buyers (ages 18-35) bought homes at a far greater rate (51 percent) than non-military buyers (34 percent). “Despite having a lower median income ($76,800), more stable job security and no down payment financing options give aspiring homeowners in the military a deserving advantage over their civilian peers,” he said. “Furthermore, their tendencies to marry and raise a family at an earlier age and carry less student debt make buying a home a more desirable and achievable option.”

Veterans Affairs loans – which offer over 100 percent financing for veteran and active-service homebuyers – were the most popular loan type for active-service and veteran buyers, leading to the majority of active-service buyers financing their entire home purchase and veterans putting down a median down payment of 5 percent. For non-military buyers, the median down payment was 11 percent. 

Adds Yun, “Current data shows that VA loans perform remarkably well and are a safe and affordable choice. Their current seriously delinquent and homes in foreclosure rate is 2.78 percent versus 3.44 percent for non-VA loans.” 2

A place to call home is often times one of the few constants for the families of the brave men and women defending our country, said NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. “That’s why it’s so important to ensure that homeownership opportunities and affordable financing options exist for qualified military personnel, veterans and their families.”

With the ability to obtain a VA loan, only five percent of veterans and three percent of active-service buyers said saving for a down payment was the most difficult step. Of those, only four percent of veterans and 13 percent of active-service buyers said student loan debt delayed saving. Sixty-two percent of veterans cited having other types of debt and 43 percent of active-service military referenced credit card debt.

While a larger share of active-service military buyers had student loan debt compared to non-military buyers and veterans, their debt balances were typically lower. Among active-service members, 37 percent had student loan debt under $10,000 compared to 21 percent for those who’ve never served.

Active-service buyers prefer large single-family homes  

The median income of veteran and active-service member homebuyers in the survey was slightly lower than buyers who’ve never served in the military, which was $86,500. Active-service buyers typically bought a 2,170-square-foot home that cost more ($226,000) than those purchased by non-military buyers and veterans. Veteran buyers had a median income of $84,000, and they typically bought a 1,980-square-foot home costing $220,000.

Mirroring the general population of buyers, over 80 percent of both veterans and active-service buyers purchased a single-family home, with those currently serving purchasing single-family homes at the highest rate (87 percent).

The primary reason for the home purchase for active-service military was job relocation, followed closely by the desire to own a home of their own. Compared to non-military buyers, veterans were more likely to want to be closer to friends and family or moving for retirement.

Increased mobility means active-service and veteran buyers and sellers rely on real estate agents

Veterans and active-service buyers purchased a home a lot further away from their previous residence (at 75 miles and 28 miles, respectively) than buyers who never served in the military (10 miles). Among the biggest factors influencing neighborhood choice, veterans were most influenced by the quality of the neighborhood, while convenience to their job was desired the most by active-service members. 

While nearly all buyers predominantly used the Internet and a real estate agent during their home search, active-duty buyers used a real estate agent at an even higher rate (95 percent versus 88 percent for non-military buyers). As a group, they were also most likely to use mobile or tablet search engines and relocation companies during their search.

“Many Realtors® are veterans themselves, who understand the unique housing needs of those serving our country,” says Salomone. “Whether it’s relocating to a completely new area across the country or needing to sell their home in a short timeframe, Realtors® are committed to helping active-service members and veterans succeed in their homeownership goals.”

Some of the characteristics of active-service sellers differed from non-military sellers. They were younger, far more likely to have multiple children living in their household and sold a home in a suburban area at a far higher rate. Additionally, the use of an agent was highest for active-service military sellers (94 percent), who – likely dealing with relocating to a new area in a short timeframe – cited both wanting help marketing the home to potential buyers and help negotiating and dealing with buyers at a far higher rate than non-military sellers and veterans. Eighty-nine percent of veterans used an agent, on par with non-military sellers (90 percent).

The most commonly cited reason for owners selling their home varied. For non-military sellers, the most commonly cited reason for selling their home was that it was too small (18 percent), while the most common reason cited by veterans was to be closer to friends and family (23 percent). Not surprisingly, job relocation for active-service military sellers was the most common reason for selling (43 percent).

NAR is committed to educating more Realtors® about working with current and former military service members through its “Military Relocation Professional” certification program. This educational initiative available to Realtors® offers insights into finding housing solutions that best suit the needs of current and former military members while taking full advantage of their military benefits. To date, over 6,800 Realtors® have earned the certification.

In July 2015, NAR mailed out a 128-question survey using a random sample weighted to be representative of sales on a geographic basis to 94,971 recent home buyers. The recent home buyers had to have purchased a primary residence home between July of 2014 and June of 2015. A total of 6,406 responses were received from primary residence buyers. After accounting for undeliverable questionnaires, the survey had an adjusted response rate of 6.7 percent. Eighteen percent of recent home buyers are veterans and three percent are active-duty service members. All information is characteristic of the 12-month period ending in June 2015 with the exception of income data, which are for 2014.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1In the survey, NAR asked the following to determine veteran and active-duty service: “Are you or your spouse or partner currently: 1) an active-duty service member; 2) a veterans; or 3) neither.”

2According to the Mortgage Bankers Association’s National Delinquency Survey.

Article source: http://feedproxy.google.com/~r/RealtororgResearchHeadlines/~3/KvkCk9s_Cp0/nar-survey-active-military-homebuyers-purchase-at-younger-ages-buy-larger-and-more-expensive-homes

Veterans and Active Military Home Buyers and Sellers Profile

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Millennial Attitudes to Homebuying by Region

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Pending Sales in March Hold Steady, But Affordability Hurts West

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Pending Home Sales Maintain Momentum in March

WASHINGTON (April 27, 2016) — Pending home sales increased slightly in March for the second consecutive month and reached their highest level in almost a year, according to the National Association of Realtors®. Only the West region saw a decline in contract activity last month.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, climbed 1.4 percent to 110.5 in March from an downwardly revised 109.0 in February and is now 1.4 percent above March 2015 (109.0). After last month’s slight gain, the index has increased year-over-year for 19 consecutive months and is at its highest reading since May 2015 (111.0).

Lawrence Yun, NAR chief economist, says last month’s pending sales increase signals a solid beginning to the spring buying season. “Despite supply deficiencies in plenty of areas, contract activity was fairly strong in a majority of markets in March,” he said. “This spring’s surprisingly low mortgage rates are easing some of the affordability pressures potential buyers are experiencing and are taking away some of the sting from home prices that are still rising too fast and above wage growth.”

In the short-term, the healthy labor market and favorable borrowing costs should lead to sustained buyer demand and a durable pace of sales. However, Yun says the consequences from a failure to construct more single-family homes in recent years are starting to impact some top job producing markets, where endless supply shortages continue to limit choices for buyers and are driving up prices beyond what a growing share of households can comfortably afford.

“Demand is starting to weaken in some areas, particularly in the West, where the median home price has risen an astonishing 38 percent in the past three years,” adds Yun. “As a result, pending sales in the region have now declined in four of the last five months and are lower than one year ago for the third month in a row. Closed sales in the region in March were also below last year’s pace.”

The PHSI in the Northeast increased 3.2 percent to 97.0 in March, and is now 18.4 percent above a year ago. In the Midwest the index inched up 0.2 percent to 112.8 in March, and is now 4.0 percent above March 2015.

Pending home sales in the South rose 3.0 percent to an index of 125.4 in March but are still 0.6 percent lower than last March. The index in the West declined 1.8 percent in March to 95.3, and is now 7.9 percent below a year ago.

Yun will present NAR’s 2016 midyear economic outlook and forecast on Thursday, May 12 from 8-10 a.m. at the 2016 REALTORS® Legislative Meetings Trade Expo. U.S. Sen. Elizabeth Warren (D-Mass.) will join Yun to discuss current housing finance and consumer issues. A news release highlighting the key takeaways of Yun’s forecast and the session will be sent later in the morning.

Members of the media may register in advance to attend NAR’s legislative conference by contacting Yolanda Byrd, 202-383-7515 or ybyrd@realtors.org. Onsite press registration is in the Marriott Wardman Park Hotel Atrium at the Help Desk/Registration Assistance Counter. Hours are Mon., May 9, 10 a.m. -5 p.m.; Tues., May 10, 8 a.m. -5 p.m.; Wed., May 11 and Thur., May 12, 8 a.m. -6 p.m.; and Fri., May 13, 8 a.m. -3 p.m.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

# # #

* The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

NOTE: NAR’s 2016 Veterans and Active Military Home Buyers and Sellers Profile will be released May 3, first quarter metropolitan area home prices will be released May 9, the second quarter Commercial Real Estate Report/Forecast will be released May 18, Existing-Home Sales for April will be reported May 20, and the next Pending Home Sales Index will be May 26; release times are 10:00 a.m. ET.

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Housing Market Summary for March 2016

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Quiz: Commercial Real Estate Lending Trends

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Existing-Home Sales Spring Ahead in March

WASHINGTON (April 20, 2016) — Bolstered by big gains in the Northeast and Midwest, existing-home sales bounced back in March and remained slightly up from a year ago, according to the National Association of Realtors®.

Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 5.1 percent to a seasonally adjusted annual rate of 5.33 million in March from a downwardly revised 5.07 million in February. Sales rose in all four major regions last month and are up modestly (1.5 percent) from March 2015.

Lawrence Yun, NAR chief economist, says home sales had a nice rebound in March following February’s uncharacteristically large decline. “Closings came back in force last month as a greater number of buyers – mostly in the Northeast and Midwest – overcame depressed inventory levels and steady price growth to close on a home,” he said. “Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well. However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures.”

The median existing-home price2 for all housing types in March was $222,700, up 5.7 percent from March 2015 ($210,700). March’s price increase marks the 49th consecutive month of year-over-year gains.

Total housing inventory3 at the end of March increased 5.9 percent to 1.98 million existing homes available for sale, but is still 1.5 percent lower than a year ago (2.01 million). Unsold inventory is at a 4.5-month supply at the current sales pace, up from 4.4 months in February.

“The choppiness in sales activity so far this year is directly related to the unevenness in the rate of new listings coming onto the market to replace what is, for the most part, being sold rather quickly,” adds Yun. “Additionally, a segment of would-be buyers at the upper end of the market appear to have been spooked by January’s stock market correction.”

Matching the lowest share since August 2015, properties typically stayed on the market for 47 days in March, a decrease from 59 days in February and below the 52 days in March 2015. Short sales were on the market the longest at a median of 120 days in March, while foreclosures sold in 50 days and non-distressed homes took 46 days. Forty-two percent of homes sold in March were on the market for less than a month – the highest since July 2015 (43 percent).

The share of first-time buyers was 30 percent in March, unchanged both from February and a year ago. First-time buyers in all of 2015 also represented an average of 30 percent.

“With rents steadily rising and average fixed rates well below 4 percent, qualified first-time buyers should be more active participants than what they are right now,” adds Yun. “Unfortunately, the same underlying deterrents impacting their ability to buy haven’t subsided so far in 2016. Affordability and the low availability of starter homes is still a major barrier for them in most markets.”

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage ticked up from 3.66 percent in February to 3.69 percent in March, but remained below 4 percent for the eighth straight month. The average commitment rate for all of 2015 was 3.85 percent.

NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida, says despite modest improvements, mortgage credit is still difficult to come by for many first-time buyers and middle-income households. “Reducing the Federal Housing Administration’s annual mortgage insurance premium rate and repealing its life-of-loan policy requirement would certainly expand options for more of these buyers,” he said. “These changes would save consumers money and further strengthen the FHA’s program by enticing more creditworthy borrowers to seek out FHA-insured loans.”

All-cash sales were 25 percent of transactions in March (unchanged from February) and are up from 24 percent a year ago. Individual investors, who account for many cash sales, purchased 14 percent of homes in March, down from 18 percent in February and unchanged from a year ago. Sixty-six percent of investors paid cash in March.

Distressed sales4 – foreclosures and short sales – fell to 8 percent in March, down from 10 percent both last month and a year ago. Seven percent of March sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in March (17 percent in February), while short sales were discounted 10 percent (16 percent in February).

Single-family and Condo/Co-op Sales

Single-family home sales increased 5.5 percent to a seasonally adjusted annual rate of 4.76 million in March from 4.51 million in February, and are now 2.6 percent higher than the 4.64 million pace a year ago. The median existing single-family home price was $224,300 in March, up 5.8 percent from March 2015.

Existing condominium and co-op sales rose 1.8 percent to a seasonally adjusted annual rate of 570,000 units in March from 560,000 in February, but are still 6.6 percent below March 2015 (610,000 units). The median existing condo price was $209,600 in March, which is 4.6 percent above a year ago.

Regional Breakdown

March existing-home sales in the Northeast ascended 11.1 percent to an annual rate of 700,000, and are now 7.7 percent above a year ago. The median price in the Northeast was $254,100, which is 5.8 percent above March 2015.

In the Midwest, existing-home sales jumped 9.8 percent to an annual rate of 1.23 million in March, and are now 0.8 percent above March 2015. The median price in the Midwest was $174,800, up 7.0 percent from a year ago.

Existing-home sales in the South rose 2.7 percent to an annual rate of 2.25 million in March, and are 2.3 percent above March 2015. The median price in the South was $194,400, up 4.6 percent from a year ago.

Existing-home sales in the West climbed 1.8 percent to an annual rate of 1.15 million in March, but are 2.5 percent lower than a year ago. The median price in the West was $320,800, which is 5.9 percent above March 2015.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE: For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

1 Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample – about 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2 The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

3 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

4 Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at Realtor.org.

NOTE: NAR’s Pending Home Sales Index for March will be released April 27, and Existing-Home Sales for April will be released May 20; release times are 10:00 a.m. ET.

Article source: http://feedproxy.google.com/~r/RealtororgResearchHeadlines/~3/vXtLDXob20U/existing-home-sales-spring-ahead-in-march

March 2016 Existing-Home Sales

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Tax Day 2016


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Quiz: Home Buying Generational Trends


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March 2016 Foot Traffic


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2016 Q1 Homeownership Opportunities and Market Experience (HOME) Survey


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Home Buying Trends: The Silent Generation


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Home Buying Trends: Older Baby Boomers


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Home Buying Trends: Younger Baby Boomers


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2015 Q4 Homeownership Opportunities and Market Experience (HOME) Survey


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Home Buying Trends: Generation X


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Home Buying Trends: Millennials


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Primary, Vacation, and Investment Homes Purchased by Region


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Vacation Home Sales Retreat, Investment Sales Leap in 2015

WASHINGTON (April 6, 2016) — Vacation home sales cooled off in 2015 but remained at the second highest amount in nearly a decade, while investment purchases increased for the first time in five years, according to an annual survey of residential homebuyers released today by the National Association of Realtors®. Mirroring the strong price growth seen throughout the U.S., the median sales price of both vacation and investment homes surged in 2015.

NAR’s 2016 Investment and Vacation Home Buyers Survey1, covering existing- and new-home transactions in 2015, found that vacation-home sales last year declined to an estimated 920,000, down 18.5 percent from their most recent peak level of 1.13 million in 2014.

Investment-home sales in 2015 jumped 7.0 percent to an estimated 1.09 million from 1.02 million in 2014. Owner-occupied purchases jumped 15.9 percent to 3.74 million last year from 3.23 million in 2014 — the highest level since 2007 (3.93 million). Sales estimates are based on a national online survey including responses from over 2,000 U.S. adults who purchased a residential property in 2015, and exclude institutional investment activity.

Lawrence Yun, NAR chief economist, says vacation sales took a sizeable step back in 2015, but still came in at the second highest amount since 2006 (1.07 million). “Baby boomers at or near retirement continue to propel the demand for second homes, although headwinds softened the overall volume of vacation sales last year,” he said. “The expanding pool of buyers amidst a dwindling number of bargain-priced properties led to tighter supply and fewer sales and caused the price of vacation homes to rise. Furthermore, the turbulence that hit the financial markets the second half of the year likely seized some would-be buyers’ available cash.”

The median sales price of both vacation and investment homes soared in 2015. The median vacation home price was $192,000, up 28.0 percent from $150,000 in 2014. The median investment-home sales price was $143,500, up 15.3 percent from $124,500 a year ago.  

According to Yun, many of the metro areas with the strongest price appreciation in 2015 were in the South — the most popular destination for vacation buyers – and particularly in several Florida markets. While increased buyer demand contributed to the run-up in prices, it also likely squeezed less affluent households looking to purchase vacation properties.

Vacation-home sales accounted for 16 percent of all transactions in 2015 — down from 2014 (21 percent), but still the second highest share since the survey was first conducted in 2003. The portion of investment sales remained unchanged from a year ago at 19 percent, and owner-occupied purchases increased to 65 percent (60 percent in 2014).

“Despite a smaller share of distressed properties coming onto the market, investment purchases reversed course in 2015 after declining for four straight years,” says Yun. “Steadily increasing home prices and strong rental demand appear to be giving more individual investors assurance that purchasing real estate will diversify their portfolios and generate additional income if they decide to rent out the home.”   

This year’s survey found that in addition to longer-term rentals, investors are most likely to attempt to and rent their properties for less than 30 days. Among investors, 42 percent did or tried to rent their property in 2015 and plan to rent their property in 2016. Twenty-four percent of vacation buyers did or tried to rent their property in 2015 and plan to rent their property this year. Vacation buyers are more likely to use a property manager or social media to rent their property, while investors are more likely to use a traditional real estate agency.

The share of vacation buyers who paid in cash jumped to 38 percent from 30 percent in 2014, while cash purchases by investors decreased to 39 percent from 41 percent a year ago. Of buyers who financed their purchase with a mortgage, over half (52 percent) of vacation buyers and 44 percent of investors financed less than 70 percent of the purchase price.

The overall trend of fewer distressed properties (short sale or foreclosure) on the market resulted in vacation buyers and investors purchasing less of them in 2015. Thirty-six percent of vacation buyers (45 percent in 2014) and 39 percent of investors (44 percent in 2014) purchased a distressed property a year ago.  

Characteristics of Vacation-Home Purchases

Vacation-home buyers in 2015 had a higher median household income ($103,700) than those in 2014 ($94,380) and purchased a property that was a median distance of 200 miles away from their primary residence (unchanged from a year ago). Buyers plan to own their property for a median of 7 years, an increase from 6 years in 2014.

With more vacation buyers purchasing single-family homes (58 percent) compared to a year ago (54 percent), the share of those buying a condo (25 percent) or a townhouse or row house (13 percent) decreased in this year’s survey. Forty-percent of vacation buyers purchased in a beach area, 19 percent purchased in the mountains or at a lakefront and 16 percent purchased a vacation home in the country.

Nearly half of all vacation homes bought last year were in the South (47 percent; 41 percent in 2014), 25 percent were in the West (unchanged from a year ago), 15 percent in the Northeast (unchanged from a year ago) and 13 percent in the Midwest (14 percent in 2014).

Over one-third of vacation buyers plan to use their property for vacations or as a family retreat (37 percent), 16 percent bought for future retirement plans and only 7 percent purchased to generate income through renting the property, a decrease from 11 percent in 2014.  

Characteristics of Investment-Home Purchases

The typical investment-home buyer in 2015 had a median household income of $95,800 ($87,680 in 2014) and bought a detached single-family home (62 percent) that was a median distance of 22 miles from their primary residence (24 miles in 2014).

Investment buyers last year purchased property for a variety of reasons, with an increasing share from 2014 citing rental income as the primary reason (42 percent; 37 percent in 2014), followed by low prices and the buyer found a good deal (16 percent), and for potential price appreciation (14 percent).

Likely reflecting growing demand towards renting in the city, investment purchases in urban areas increased to 29 percent (26 percent in 2014). Purchased properties from investment buyers were more likely to be in the South (37 percent) and in a suburban area (41 percent).

Perhaps encouraged by rising housing demand and home prices, over 80 percent of both vacation buyers and investment buyers believe that now is a good time to purchase real estate.     

NAR’s 2016 Investment and Vacation Home Buyers Survey, conducted in March 2016, surveyed a sample of households that had purchased any type of residential real estate during 2015. The survey sample was drawn from a representative panel of U.S. adults monitored and maintained by an established survey research firm. A total of 2,053 qualified adults responded to the survey. Respondents were sampled to meet age and income quotas representative of all home buyers drawn from the NAR 2015 Profile of Home Buyers and Sellers.

The 2016 Investment and Vacation Home Buyers Survey can be ordered by calling 800-874-6500, or online at https://store.realtor.org/product/report/2016-nar-investment-and-vacation-home-buyers-survey?sku=E186-55-16. The report is free to NAR members and accredited media and costs $149.95 for non-members.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1 Vacation homes are recreational property purchased primarily for the buyer’s (or their family’s) personal use, while investment homes are residential property purchased primarily to rent to others, or to hold for other financial or investment purposes.

Home sales were calculated based on a proportion of buyers who bought each respective home type—vacation, investment, and primary residence. The number of purchases for each housing type were calculated using the total number of existing home sales and new homes in 2015. To calculate the difference in the number of purchases in 2014 to 2015, the percent change of each housing type purchased was calculated.

Article source: http://feedproxy.google.com/~r/RealtororgResearchHeadlines/~3/vdrrlkGdAKw/vacation-home-sales-retreat-investment-sales-leap-in-2015

2016 Investment and Vacation Home Buyers


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