Homes Still Selling Fast Heading Into Fall

Homes Still Selling Fast Heading Into Fall. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

With home buyer demand starting to slow along seasonal trends, properties for sale are staying on the market slightly longer. For transactions that closed in July, the homes were typically on the market for 42 days, according to the latest REALTORS® Confidence Index. NAR notes that the number of days on market typically rises after June because of seasonal changes and an overall slowdown in the housing market heading into fall.

But with inventory still tight, properties are moving faster than they did a year ago — when they averaged 48 days on the market, according to NAR. In July, 43 percent of sold properties spent less than a month on the market.

Short sales are on the market for the longest time, at 135 days, while foreclosed properties are staying on the market an average of 49 days. Non-distressed properties averaged 41 days, according to NAR.

Properties are selling particularly fast in a pocketful of markets. They typically sold within a month in Washington, Oregon, California, Utah, Colorado, North Dakota, Kansas, Texas, Michigan, Massachusetts, and the District of Columbia.

Source: “In What States Did Properties Sell Quickly in May-July 2015?” National Association of REALTORS® Economists’ Outlook blog (Sept. 1, 2015)

More Consumers Have Higher Credit Scores

More Consumers Have Higher Credit Scores. Image courtesy of dream designs / FreeDigitalPhotos.net

Nearly one in five consumers have a FICO credit score that is 800 or higher. The percentage has slightly risen from 19.9 percent currently from 19.6 percent six months earlier, according to the Fair Isaac Corp.

As such, fewer consumers have credit scores below 550, a steady decline that has been appearing since late 2009.

Since Fair Isaac Corp. started tracking in October 2005, the national FICO score is at an all-time high at 695. The improvement in credit scores does seem to be showing some signs of leveling off, however.

FICO scores are one of three key metrics lenders use to evaluate prospective borrowers and determine mortgage rates. The rates borrowers get between the highest and lowest acceptable FICO scores can vary by more than 2.4 percent.

For example, a FICO score between 760 and 850 may get an APR at 3.612 percent whereas a borrower with a FICO score between 620 and 639 may get one at 5.201 percent.

Source: “One in Five Consumers Is a Member of the FICO 800 Club,” Real Estate Economy Watch (Aug. 31, 2015)

Signs Indicate No Drop-Off for Home Sales

Signs Indicate No Drop-Off for Home Sales. Image courtesy of hywards/ FreeDigitalPhotos.net

It appears existing-home sales won’t drop off at the end of the summer, as sales contracts rose modestly in July, reflecting an overall upward trend for the past seven months, according to National Association of REALTORS® data.

The housing market has begun the second half of 2015 on an upbeat note, with NAR’s Pending Home Sales Index — a forward-looking indicator based on contract signings — inching up 0.5 percent in July to 110.9. It is now 7.4 percent above year-ago levels.

“Led by a solid gain in the Northeast, contract activity in most of the country held steady last month, which bodes well for existing-sales to maintain their recent elevated pace to close out the summer,” says NAR Chief Economist Lawrence Yun. “While demand and sales continue to be stronger than earlier this year, REALTORS® have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market and are likely holding back sales from being more robust.”

Housing inventory shortages likely will persist into the fall, which will also prompt existing-home prices to continue to rise, Yun notes. The national median existing-home price will likely rise 6.3 percent this year to $221,400, according to NAR. Existing-home sales also are expected to rise by 7.1 percent this year, totaling 5.29 million. That’s still about 25 percent below the 2005 peak of 7.08 million.

“In light of the recent volatility in the stock market, it’s possible some prospective buyers may err on the side of caution and delay decisions, while others may view real estate as a more stable asset in the current environment,” Yun says. “Overall, the prospects for ongoing strength in the housing market remain intact for now. The U.S. economy is growing — albeit at a modest pace — and the labor market continues to add jobs.”

Source: National Association of REALTORS®

Where Americans Are Moving To?

Where Americans Are Moving To? Image courtesy of Stuart Miles/ FreeDigitalPhotos.net

About 18 percent of people who moved last year – or 8.5 million – moved from one large metro area to another. But also a growing number moved to a smaller city that was not too far away from their prior residence, U.S. Census Bureau data shows.

The top destination of movers continues to be Los Angeles, which had nearly 245,000 people relocating from other metro areas. Other top moving destinations included New York and Washington, D.C.

However, these large cities appear to be losing more residents than they’re gaining. For example, nearly 400,000 people moved out of New York last year and 340,000 left Los Angeles.

On the other hand, smaller cities like Austin, Texas, and Riverside, Calif., are gaining more residents – more people are moving in than out.

Realtor.com® reports the following are the top 10 city-to-city mitigation paths from 2009 to 2013:

1. Los Angeles, Calif. to Riverside, Calif.: 90,494
2. Riverside, Calif. to Los Angeles, Calif.: 54,711
3. New York, N.Y. to Philadelphia, Pa.: 26,957
4. San Jose, Calif. to San Francisco, Calif.: 24,536
5. Washington, D.C. to Baltimore, Md.: 22,944
6. New York, N.Y. to Miami, Fla.: 22,226
7. Baltimore, Md. to Washington, D.C.: 21,457
8. San Diego, Calif. to Riverside, Calif.: 19,667
9. Philadelphia, Pa. to New York, N.Y.: 19,336
10. San Francisco, Calif. to San Jose, Calif.: 18,680

Source: “Bright Lights, Not-So-Big Cities: Where Americans Are Moving,” realtor.com® (Aug. 26, 2015)

10-Year Housing Surge on the Horizon?

10-Year Housing Surge on the Horizon? Image courtesy of ddpavumba / FreeDigitalPhotos.net

The housing market is poised for one of its largest expansions in history. By 2024, demographic and economic changes are forecasted to bring 15.9 million additional households on board, according to a new study released by the Mortgage Bankers Association.

That means an average of 1.6 million additional households per year, sparking “housing market growth over the next decade that would be among the strongest the U.S. has ever seen,” according to the report.

The MBA report says the bulk of that growth will be from increases in the number of households who are headed by those age 60 and older and households headed by age 45 and younger. Those age group increases are expected to mitigate the decline among households age 45 to 60.

“An aging population should gradually increase demand for home ownership, partially offsetting the influence of a more racially and ethnically diverse population on home ownership rates,” the MBA report notes.

The Census Bureau projects the following breakdown in ages emerging in 2024, as compared to 2014:

• 20 million more people age 60 and over than there are today (as Baby Boomers age),
• 4 million fewer people age 45 to 59 (as the large Baby Boomer cohorts are replaced by smaller Generation X cohorts) and
• 18 million more people age 18 to 44 (as smaller Generation X cohorts are replaced by larger Millennial cohorts)

Household growth is also expected to be driven by 5.5 million additional Hispanic households. For other races, 3.4 million additional non-Hispanic White households are expected to form by 2024, 2.4 million additional black households, 1.8 million more Asian households, and 730,000 additional other households.

Source: “Housing Demand,” Mortgage Bankers Association (2015)