A decade ago, the housing sector was in a mess. The mistakes of easy subprime lending resulted ultimately in the catastrophic collapse of the housing sector. Home values collapsed by a third nationwide, and the inventory of unsold homes spiked to unprecedented heights. Miami, for example, at one point was said to have 30 years of housing inventory.
Fortunately, after many years of sobering up, with proper lending and consistent job creations in the economy, the housing market has regained some health, with higher home sales and a very low foreclosure rate. However, the industry today is facing a different kind of crisis: not enough homes for sale.
The inventory of homes on the market last year in 2017 was one of the tightest ever. In early 2018, it is even worse. In the first quarter, the number of homes on the market averaged 1.59 million, which is down 8.4% from the same period one year ago. Strictly focusing on single-family home listings, this is the lowest inventory since the tracking of the data from the early 1980s.
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WASHINGTON (March 28, 2018) — Pending home sales snapped back in much of the country in February, but weakening affordability and not enough inventory on the market restricted overall activity compared to a year ago, according to the National Association of Realtors®.
The Pending Home Sales Index,* www.nar.realtor/pending-home-sales, a forward-looking indicator based on contract signings, grew 3.1 percent to 107.5 in February from a downwardly revised 104.3 in January. Even with last month’s increase in activity, the index is 4.1 percent below a year ago.
This exerpt from The National Association of Realtors. Click HERE to read more.
Rates remained unchanged this week and do not appear to be heading back down to levels from a couple of months ago.
Please keep in mind that it is a good idea for buyers to get a second opinion on their rates and fees. With daily pricing being so volatile, some lenders are not in line with the market. I was able to lock in a client this week .375% lower in rate than another lender.
In economic news, rising home loan rates coupled with a lean supply of homes for sale on the lower-end of the market pushed sales of new single-family homes lower in January. New Home Sales fell 7.8 percent in January from December, according to the Commerce Department, led by a 33 percent plunge in the Northeast. From January 2017 to January 2018, sales were down 1 percent.
Home prices continued to rise in December due in part to the continuing trend of high demand and a shortage of homes for sale on the market. The S&P/Case-Shiller 20-City Home Price Index rose 6.3 percent from December 2016 to December 2017.
Existing-home sales jumped in March to their highest annual rate in 18 months, while unsold inventory showed needed improvement, according to the National Association of Realtors®. Led by the Midwest, all major regions experienced strong sales gains in March and are above their year-over-year sales pace.
Total existing-home sales1, which are completed transactions that include single-family homes, town homes, condominiums and co-ops, increased 6.1 percent to a seasonally adjusted annual rate of 5.19 million in March from 4.89 million in February—the highest annual rate since September 2013 (also 5.19 million). Sales have increased year-over-year for six consecutive months and are now 10.4 percent above a year ago, the highest annual increase since August 2013 (10.7 percent). March’s sales increase was the largest monthly increase since December 2010 (6.2 percent).