Should I Buy a House Now or Wait? With the…
Housing Market Predictions
The housing market is recovering and NAR’s new report for June shows rising listings, sales and home prices.
Existing Home Sales Rebound in June
June’s huge 20.7% jump in home sales is giving support to a more promising housing market forecast for the rest of 2020. Sales rose to an adjusted rate of 4.72 million units during the month of June.
The new sales numbers are still down from last june by 11.3% however, given how severe this recession has been and that business in many states are still shutdown, this is a big number.
Lawrence Yun, NAR’s chief economist added in the latest statistical report from NAR, said “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
The median home price during June rose 3.9% year over year to $295,300 from last year’s home price of $285,400.
Total listings for sale rose too, up 1.3% from last June, however homes for sale are significantly fewer, as home inventory fell from last year’s 1.92 million units to only 1.57 million units. Low mortgage rates and limited inventory won’t be changing anytime soon, giving market pessimists little fuel for their housing market crash scenarios.
Lawrence Yun mentioned the sparsity of listings before the pandemic and hints that price inflation is a concern. First time buyers accounted for 35% of purchases, up another 1% in June. All cash sales dropped 1% to 16% recorded last month. Distressed, short sales, and foreclosures stayed the same a last month at 3%.
Homes and Prices Rise
Single Family home sale rose 19.9% more than May’s sales totals to a rate of 4.28 million in June. The median price for a house for sale rose 3.5% from last year. which condo prices rose 1.4% vs last June. Condo, apartment and coop sales rose 29.4% from last month, a surprising statistics given the Covid 19 concerns.
The growing desire to migrate to suburban and rural areas could draw more home sellers into the market. However, with places to move to, it is difficult for homeowners to commit to selling.
Home sales in the south jumped 26% and prices rose 4.4% to a new level of $258,000. Home sales in the Midwest rose 11.1% while prices rose 3.2% to $236,900. And in the West, it has big rate of growth at almost 32% in sales (950,000 units) and prices rose 5.45 from last year.
NAR Realtors are reported a solid growth in confidence about the housing market. In June, the confidence index rose 14 points to 64 from May, and this is the same level it was in June 2019. Realtors feel properties are getting sold faster and the expected difference in home sales from this year to last year is down to -1.4. Realtors are reported more offers on homes, with fewer showings than in May, and that listings are growing.
Buyer traffic is reported as strong across the US with most activity in South Carolina, West Virginia, New Jersey, Connecticut, North Dakota, Michigan, Montana, Vermont and Nebraska. Top selling activity states were North Dakota, Wyoming, Vermont,Nebraska, and Mississippi.
New Home Sales Jump
Resale home sales dropped by 9.7%. The median existing-home price for all housing types during May was $284,600. That is up 2.3% from May 2019 ($278,200). Home supply increased to 4.5 months in May.
New home sales rose to a seasonally adjusted annual rate of 676,000 units in May, up from April’s adjusted total of 580,000 units. New home sales are a leading indicator, and home buyer intent is rising. Experts believe we’re at the beginning of a cyclical upsurge (in the stock market too).
Mortgage Rates Declining
Freddie Mac has some good news with mortgage rate forecast. Rates will decline. After the Feds injected $3 trillion into the economy, homebuyers are getting another boost in low mortgage rates. and a lot of debt and mortgage refinancing has been taking place.
Lawrence Yun, NARs chief economist says new home construction has to pick up to resolve the coming housing supply shortage, as buyers return.
“Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year.” — Lawrence Yun, NAR’s chief economist.
- National housing inventory rose to 1.55 million units, up 6.2% from April, but is down 18.8% from last May (1.91 million units).
- housing inventory in large markets decreased by 21.9% year over year (early May)
- cash sales made up 14% of homes in May, up from 10% in April 2020
- Distressed sales – foreclosures and short sales – remained the same 3% of sales in May
- existing-home sales in the Northeast fell 13.0%, (470,000 homes), a 29.9% decrease from a year ago
- prices rose 7.8% in the northeast in May
- sales in the West fell 11.1% to an annual rate of 720,000 in May, a 35.1% decline from a year ago
- sales in the South dropped 8.0% to an annual rate of 1.73 million in May, down 25.1% from the same time one year ago
- all regions saw price increases
Bottom line is that real estate is an even more precious asset which a decreasing number of buyers can afford.
Please do Share on Facebook with your Friends!
The New Mortgage Environment
Mortgage defaults have hit an all time high.
- The number of borrowers more than 30 days late exploded to 4.3 million, up 723,000 from April
- 8% of all U.S. mortgages were past due or in foreclosure.
The mortgage related stress will eat into home sales, other than the coming distressed sales in the last 6 months of the year. It’s also reported that Wells Fargo is no longer offering Helocs. JPMorgan Chase is said to be limiting new home loans to borrowers only to those who have down payments of at least 20% and FICO credit scores of at least 700.
Zillow reports that close to 4 million mortgages are in forbearance. 7.3% of all mortgagees can’t pay their mortgage. This will tighten up lending rules. Buyers may want to intensify their home search before that worsens.
Yahoo reports that mortgage refinancing has hit a 7 year high, as homeowners look to lower payments or get a grace period of some kind.
There are reports that mortgage rates might fall to a record low 3.1%. MBA says refinance loans rose 225% — which is three times the rate of one year ago.
Please Do Share with your Friends and Clients on Facebook!
Now that business is reopening slowly, the market will have a little jump from latent demand and continue an upward trend in houses for sale too. The big worry is that we’ll see a second wave of Covid 19 infections. Let’s hope the government gets tough on hygiene, social distancing offenders, otherwise, given some people’s behavior, a second wave looks likely.
Although the stock markets have been trending up, unemployment and GDP drops are severe. The uncertainty of the Corona Virus period will suppress home sales. Higher unemployment, layoffs of high paid workers, and shut down of the travel industry are 3 key factors that will result in lower home and condo sales, and perhaps for the first time, lower home prices.
Many Americans will soon be on their own without Fed assistance and facing back rent and overdue mortgages. Cities such as Denver, Dallas, Houston, Las Vegas, Tulsa, Seattle, will have to face their new reality of low oil prices and minimal tourism for 2020. Boston, New York, New Jersey, Chicago and Los Angeles have their own unique hurdles to face.
The demand for homes is falling and in some cities such as Dallas, Houston, Fort Worth, New Orleans, Anchorage, and Denver, prices could plummet due the compounding effect of downward oil price forecast and the shutdown. The outlook for the oil cities is dire.
It remains to be seen whether buyers will still have a job, willingness and interest, good debt to income ratio, and a big enough down payment to buy this year. Some companies will go under and builders will be reluctant to commit billions to building housing.
The summer weather forecast however looks good, perfect weather for low virus infections and house hunting.
Pre-Corona Virus Home Sales and Prices
Let’s have a quick look at some major markets across the country. Most markets performed well and Realtors were giving rosy Q1 projections. Then Covid 19 hit. Now buyers and sellers are inquiring about the market for the next 3 months, 6 months and the 5 years and 10 year forecasts. Read more on how the Corona Virus will affect the real estate market. More data is coming in now.
Boston Housing Market
During May, single detached home sales in Greater Boston decreased by 33% to only 889 units sold. Boston home prices rose 5.5% to an average of $670,000. Condo sales fell 49% YoY to only 605 units sold. The median price fell 2.7% YoY from $595,000 last year to $578,754 this year.
Active single home listings within Greater Boston fell 35% to 2177 home for sale while the number of new listings fell 38% to 2,655 units. For condos, Active listings dropped 18% in May to 2087 units for sale, while new listings grew by about 130 units.
New York Housing Market
Like most other US metro housing markets, New York’s home sales saw a continued decline in May. Closed sales fell 33.8% to 7,597 sales compared to the 11,475 units sold in May 2019. Pending home sales also declined 47.3%, dropping from 14,224 sales in May of 2019 to 7,500 sales during last month.
New York’s median sales price stayed even to last May’s price level at $270,000. Home sellers saw the average home selling price rise 2.9% to $376,542 from last May’s average sales price of $365,796.
New home listings increased strongly from 23,668 homes to 13,139 units year-over-year. And New York’s supply of home inventory fell 11.5% in May, down to 5.4 months of inventory.
Will NYC home and condo prices begin to climb in June and July? Read more on the New York housing market forecast.
Los Angeles Housing Market
In Metro LA, detached home prices fell 2.7% to 535,000 from $550,000 last month. That price was even from last may of 2019. Home sales dropped 12% from last month, and are down 46.4% from last May.
Overall, in Los Angeles for all home types, prices fell 3.2% from last month yet were up 1.4% from last May. Home sales month to month fell 10.9% from last month and were down 47.5% from last May.
Condo sales prices dropped 4.3% from April, and yet were up 2.3% from last May of 2019. Condo sales month to month were down 12.5% and down a steep 55.4% from May of last year. Will house prices grow in June and July in the Los Angeles region? Catch up the LA housing market forecast.
San Francisco and Bay Area Housing Market
Single detached home sales in the SF Bay Area, fell 6.7% month in May and 51% compared to last May. House prices dropped 15% month to month and were down 2.5% YoY to $965,000.
In the SF Bay area, condo prices fell $34,500 to $705,000 from April’s prices and were down $35,000 from last May. Sales fell steeply from April, down 26.4% and that was down 64% from last May.
In San Francisco, home prices dropped a steep $73,000 from April, and that was down $71,000 from last May. House sales improved in May, up 2% from April, yet were down 55.6% year over year.
Will house prices begin to rise in June and July? Read more on the Bay Area housing market forecast.
San Diego Housing Market
San Diego single detached home prices fell 2% in May from last month’s median price of $681,2500 to this month’s price of $655,00.
Home sales in San Diego fell 14.6% month to month and were down 42.3% from last May.
The average San Diego condo price remained the same at $435,000 in May, but this was up 1.2% from last May. Condo sales dropped 15.9% from April and down 46.5% from last may.
Will house prices begin to rise in San Diego County? Read more about the San Diego housing market forecast.
Florida Housing Market
Single family home sales in Florida dropped to 19,622 homes sold, down 36.2% from May of 2019. The average Florida house sold for $270,000 which was up 1.5% from last May. New house listing fell 8.7% from last May to 31,155 units. Active listings dropped 18.3% from May 2019 leaving a supply for sale of 3.3 (down 17.5% from last May).
Year to date compared to 2019, house sales are down 9.1%. Cash sales in May were down 47.5% year over year.
Condo sales in Florida, dropped 50.3% year over year to only 6,069 units. New pending sales are down about 16% YoY. The average condo sales price rose 3% year over year to $281,694. The dollar volume of condo sales dropped 50% for $1.7 billion across the state of Florida.
Active condo and townhouse inventory is down 4.3% to 54,221 units. New home listings fell by 6.2% year over year. Read more about the Florida Housing market.
Dallas Housing Market
Like most cities, Dallas February home sales did not reflect the effect of this new market contraction. The median price of a home in metro Dallas rose 4.2% to $245,000. Sales grew a strong 11.1%. Active listings fell 6.2% and there are 2.6 months of inventory which is down .3 from last February. Strangely, DOM is up to 50 days. Zillow forecasts a 5.3% selling prices in the next 12 months. Will house prices drop in Texas? Read more on the Dallas housing market forecast.
Atlanta Housing Market
Atlanta was yet one more major city with a rise in sales and home prices. Total homes and condos sold reached 6348 units which is up from January’s 5491 solds, a 13.5% rise. Active listings dropped 4.2% to 18, 163 units and residential inventory shrank 4.8% to 2.3 months. Year over year, sold units grew by 9.2% while prices 5.3%. Read more about the Atlanta housing market.
Chicago Housing Market
In Metro Chicago, in February, all home in February sales grew 6.6% to 6,057 units, year over year from February 2019 sales of 5,680 homes. The median home price in February was $240,000 in the Chicago Metro Area. That’s up 4.3% from February 2019 when it was $230,000.
In the city of Chicago, the median home price grew 6.4% to $290,000 up 6.4% from last year. There are 7507 homes for sale which is down almost 10% from last year. Will house prices fall in Illinois? Read more about the Chicago housing market and the Illinois real estate market.
Denver Housing Market
Denver saw its median home prices rise 2.4% and sales rise 3.2% in February 2020. Avg days on market fell by 15%, and active inventory dropped by 2.2% and are down 19.6% YoY. Back in 2006, listings totalled 25,500 when Denver’s population was smaller. with only 4800 homes for sale currently, prices would have shot up considerably in March.
In February 2020 in the luxury segment, 141 million dollar homes were sold. That was a big jump of 18.5% from from January and 8.5% YoY. The total dollar volume in the luxury segment in February rose 17.6% to $215.45 billion and that’s up 8.2% YoY. Will Denver’s strong job market hold out in 2020? Read more on the Denver Housing Market.
Housing Market Forecast: Looking for specific data related to the Dallas housing market, Los Angeles real estate market, New York real estate market forecast, Atlanta real estate market, Seattle real estate forecast, Chicago home sales projections, Philadelphia home sales report, San Diego County real estate update, Miami condo market, Boston housing market, Bay Area housing forecast, Tampa Sarasota housing outlook, Denver housing outlook, and Houston housing market predictions?. See forecasts for California housing, and Florida housing markets.
3 Month Housing Forecast Looking Much Better
February’s National Housing Stats
Existing home sales grew strongly 6.5% in February to seasonally adjusted rate of 5.77 million. That was up 7.2% from last year.
The median US home price rose 8% YoY to $270,100. Total housing inventory coming into March was 1.47 million units, down 9.8% from last February. Unsold inventory sits at a 3.1 month supply same as January.
Properties were on the market for an average of 36 days in February down from 44 days last February. half of homes sold in less than a month. So sales activity was brisk.
First time buyers made up 32% of buyers which is slightly less than usual.
Lawrence Yun said “While offering a definitive forecast is extremely difficult in light of this national and global emergency, Yun says home prices will hold on well. “Unlike the stock market, home prices are not expected to drop because of the on-going housing shortage and due to homes getting delisted during this time of crisis.”
Individual investors comprised 17% of sales, and all cash transactions fell from 20% from 21% in January.
Single Family Home Sales Report
NAR reports the single detached home sales rose 350,000 from January, and was up 7.3% from last year. The median price of single detached homes was $272,400 in February, up 8.1% from last year. The median price of a condo increased 7% from last years price to $249,900.
Regional Home Prices
Existing home sales in the Northeast fell 4.1% yet price rose to $295,400, which is up 8.2% from last year. In the midwest, home prices rose 7.9% to $203,700 on an increase of .8% sales. In the south, sales grew 7.2% and the median price was up 8.2%. And in the West, sales surged 18.9% while home prices rose 8.1% from last year to an a median of $410,000.
Mortgage rates will fall as the Fed lowers the key rate which opens up big mortgages for Millennials buyers. NAR as part of its February housing market report said: According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.47% in February. This dropped from a 3.62% rate in January. The average commitment rate across all of 2019 was 3.94%.
The 5 to 10 year price forecast is upward reflecting a downward availability of homes and intense competition. And the 2021 housing forecast look solid. The question buyers have right now is whether the stock markets will hold up. Jobless claims in California are scary, but the Covid 19 pandemic will pass.
The virus is making stock market forecasts grim, and killing international trade. If the virus appears in the US (it is predicted to arrive) it could be very destruction. It is drying up imports, however, its raising demand for US made products. The story gets complicated.
After the 2008 housing crash, many homes were turned into rentals. That’s resulted in even fewer homes up for sale. Homeowners are staying in their homes 8 years longer today. The story of the market is a lack of housing, insufficient construction, and low affordability.
NARs Realtor survey has been released. It’s got some good insight for buyers, sellers and Realtors alike.
Continue to US Housing Market Forecast Part 2
California Housing Market | Florida Housing Market | Housing Stocks | Cities with Lowest House Prices | Housing Market Recovery | Will Home Prices Fall? | China Economic Forecast | Stock Market Forecast 2021 | Will the Housing Market Crash? | 3 Month Forecast | 6 Month Forecast | Will the Stock Markets Crash? | Denver Housing Market | Chicago Housing Market | Miami Real Estate | Atlanta Housing Market | Tampa Housing Market | Dallas Real Estate | Linkedin | Facebook | Mortgage Rates Low | Mortgage Refinance Rates | Sitemap | RSS Syndication
Please do Share this post on Facebook, Twitter, or Linkedin. It’s good to share!!