Happy Fall, y’all! What’s the big news you ask?! We’re extending the Early Bird Pricing to October 15! That gives you plenty of time to recruit your colleagues, developers, and local leadership to this year’s conference in Daytona Beach. Again, we look forward to seeing everyone November 7-9! Visit the Annual Conference Page for More Details.
One exciting event at the annual conference is the recognition of our AARC Seal of Approval Communities. If you don’t have the “stamp,” please consider applying for this prestigious status.
We also want to extend our thoughts and prayers to all our friends in the Carolinas that were affected by Hurricane Florence. We know it could be quite a to recovery and from everyone with the AARC, we’re thinking about you.
Rachel Baker Chair, The AARC
New home sales rebound in August, prior months revised lower
Reuters/CNBC | September 26, 2018
- New home sales rebounded 3.5 percent to a seasonally adjusted annual rate of 629,000 units last month.
- Sales in June were also much weaker than previously reported.
- The 30-year fixed mortgage rate has increased more than 60 basis points this year to an average of 4.65 percent.
Sales of new U.S. single-family homes increased more than expected in August after two straight monthly declines, but the underlying trend still pointed to a weakening housing market amid rising mortgage rates and higher home prices.
The Commerce Department said on Wednesday new home sales rebounded 3.5 percent to a seasonally adjusted annual rate of 629,000 units last month. July’s sales pace was revised down to 608,000 units from the previously reported 627,000 units.
Sales in June were also much weaker than previously reported. Economists polled by Reuters had forecast new home sales, which account for about 11 percent of housing market sales, rising 0.5 percent to a pace of 630,000 units in August.
New home sales are drawn from permits and tend to be volatile on a month-to-month basis. They increased 12.7 percent from a year ago.
The housing market is lagging a robust economy, with data last week showing sales of previously owned homes flat in August and building permits plunging to a more than one-year low.
Economists blame the weakness in the housing market on rising borrowing costs and house prices, which have outstripped wage growth, making home purchasing unaffordable for some first-time buyers.
The 30-year fixed mortgage rate has increased more than 60 basis points this year to an average of 4.65 percent. House prices rose 5.9 percent in July from a year ago, data showed earlier this week.
In contrast, annual wage growth has been stuck below 3 percent, though it has recently shown signs of picking up. With the Federal Reserve expected to raise interest rates later on Wednesday for the third time this year, mortgage rates are likely to rise further.
Residential investment contracted in the first half of the year and is expected to decline further in the third quarter.
New home sales in the South, which accounts for the bulk of transactions, fell 1.7 percent in August. Sales jumped 9.1 percent in the West and climbed 2.7 percent in the Midwest. They soared 47.8 percent in the Northeast, which is the smallest segment of the new housing market.
The median new house price rose 1.9 percent to $320,200 in August from a year ago. There were 318,000 new homes on the market in August, the most since February 2009 and up 1.6 percent from July. Supply is, however, just over half of what it was at the peak of the housing market boom in 2006.
At August’s sales pace it would take 6.1 months to clear the supply of houses on the market, down from 6.2 months in July.
Nearly two-thirds of the houses sold last month were either under construction or yet to be built.
Builder Confidence Remains Firm in September
National Association of Home Builders | September 18, 2018
Builder confidence in the market for newly-built single-family homes remained unchanged at a solid 67 reading in September on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
“Despite rising affordability concerns, builders continue to report firm demand for housing, especially as millennials and other newcomers enter the market,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “The recent decline in lumber prices from record-high levels earlier this summer is also welcome relief, although builders still need to manage construction costs to keep homes competitively priced.”
“A growing economy and rising incomes combined with increasing household formations should boost demand for new single-family homes moving forward,” said NAHB Chief Economist Robert Dietz. “However, housing affordability is becoming a challenge, as builders face overly burdensome regulations and rising material costs exacerbated by an escalating trade skirmish. Interest rates are also forecasted to keep rising.” Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
The HMI index measuring current sales conditions rose one point to 74 and the component gauging expectations in the next six months increased two points to 74. Meanwhile, the metric charting buyer traffic held steady at 49.
Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 54 and the South remained unchanged at 70. The West edged down a single point to 73 and the Midwest fell three points to 59.
Editor’s Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.
Homeowners Ready to Sell in the Third Quarter of 2018, says Realtor® Survey
WASHINGTON (September 26, 2018) – New findings from the National Association of Realtors® show that a record high 77 percent of Americans believe that now is a good time to sell a house, while those that think now is a good time to buy continues to decline.
NAR’s second quarter Housing Opportunities and Market Experience (HOME) survey1also found that a majority of consumers believe prices have and will continue to rise, while the quality of schools is a critical factor in deciding whether or not to buy a home.
Half of all Americans strongly believe now is a good time to sell (compared to 46 percent last quarter), while 27 percent moderately believe this is the right time (29 percent last quarter). Respondents in the West are the most likely to think now is a good time (85 percent) as are those who currently own a home (82 percent). Only 22 percent believe that now is not a good time to sell, down from 29 percent in the second quarter.
Optimism that now is a good time to buy has declined slightly from last quarter. Sixty-three percent of respondents either strongly or moderately believe that now is a good time buy compared to 68 percent last quarter. Among renters, positive feelings about purchasing continue to fall, dropping from 49 percent in the second quarter to 45 percent this quarter. Optimism is highest among older U.S. households (65 or over) and those with a household income of more than $100,000 a year (70 and 68 percent respectively).
NAR Chief Economist Lawrence Yun says several consecutive years of strong home price growth are enticing homeowners to consider selling. “Though the vast majority of consumers believe home prices will continue to increase or hold steady, they understand the days of easy, fast gains could be coming to an end. Therefore, more are indicating that it is a good time to sell, which is a healthy shift in the market.”
Respondents were also asked about their view of home prices in their neighborhoods. Seventy percent believe that home prices have gone up in their area in the last 12 months, up from 68 percent in the second quarter. Fifty-three percent also believe that home prices will continue to increase in their communities in the next six months; this is down from the last quarter (55 percent).
Consumers feeling positive about the economy and concerned about qualifying for a mortgage
A near-record high of 60 percent of households believe that the economy is improving – up slightly from 58 percent last quarter and up significantly from 53 percent in the third quarter of 2017. People in a household income of over $100,000 are more likely to view the economy as improving (67 percent) compared with those with an income $50,000 to $100,000 (64 percent) and under $50,000 (49 percent).
The HOME survey’s monthly Personal Financial Outlook Index2, showing respondents’ confidence that their personal financial situation will be better in six months, rose slightly from 62.1 in June to 62.6 in September. A year ago, the index was 62.0.
Among those who do not currently own a home, 28 percent of those surveyed believe that it would be very difficult to qualify for a mortgage and 31 percent believe that it would be somewhat difficult given their current financial situation (compared to 26 and 28 percent last month respectively). “This is most likely a manifestation of the constantly rising prices,” said Yun. “As prices rise so do down payments, making the mortgage qualifying process more challenging.”
Importance of Highly Rated Schools, Other Factors in Homebuying Decision
In this quarter’s survey, homeowners and non-homeowners were asked how important high rated schools are in their home buying decision. Over two-thirds of those surveyed said that highly rated schools were either very or somewhat important in their decision (47 percent and 23 percent, respectively).
When asked about what considerations were taken into account when choosing a new neighborhood, 25 percent of respondents ranked proximity to friends and family as most important, followed by proximity to their job and a short commute (24 percent). Proximity to friends and family is most important to those in rural areas (31 percent) compared to suburban and urban (25 and 21 percent respectively).
“When you buy a home, you do not just buy the house; you buy a community – neighbors, parks, stores and schools,” said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “Realtors® understand the unique qualities of the neighborhoods in their area and can help individual families find and purchase the right home in the right neighborhood.”
Respondents were also asked about the number of homes available for sale in their communities. Fifty-six percent of respondents reported that the number of homes available for sale in the neighborhood has remained the same over the past six months, while 23 percent said they have observed more homes for sale than usual.
About NAR’s HOME survey
From July through September, a sample of U.S. households was surveyed via random-digit dial, including a mix of cell phones and land lines. The survey was conducted by an established survey research firm, TechnoMetrica Market Intelligence. Each month approximately 900 qualified households responded to the survey. The data was compiled for this report representing a total of 2,731 household responses.
The National Association of Realtors® is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.