Today's Headlines - Realty Times

– Existing-home sales grew in January, according to the National Association of Realtors®. Among the four major U.S. regions, sales accelerated in the Midwest, South and West, and remained steady in the Northeast. Year-over-year, sales improved in the West, and decreased in the Northeast, Midwest and South.

Total existing-home sales[i] – completed transactions that include single-family homes, townhomes, condominiums and co-ops – elevated 3.1% from December to a seasonally adjusted annual rate of 4.00 million in January. Year-over-year, sales slipped 1.7% (down from 4.07 million in January 2023).

“While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” said NAR Chief Economist Lawrence Yun. “Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year.”

Total housing inventory[ii] registered at the end of January was 1.01 million units, up 2.0% from December and 3.1% from one year ago (980,000). Unsold inventory sits at a 3.0-month supply at the current sales pace, down from 3.1 months in December but up from 2.9 months in January 2023.

The median existing-home price[iii] for all housing types in January was $379,100, an increase of 5.1% from one year ago ($360,800). All four U.S. regions posted price increases.

“The median home price reached an all-time high for the month of January,” Yun added. “Multiple offers are common on mid-priced homes, and many homes were still sold within a month. The elevated share of cash deals – 32% – indicated a market full of multiple offers and propelled by record-high housing wealth.”

REALTORS® Confidence Index

According to the monthly REALTORS® Confidence Index, properties typically remained on the market for 36 days in January, up from 29 days in December and 33 days in January 2023.

First-time buyers were responsible for 28% of sales in January, down from 29% in December and 31% in January 2023. NAR’s 2023 Profile of Home Buyers and Sellers – released in November 2023[iv] – found that the annual share of first-time buyers was 32%.

All-cash sales accounted for 32% of transactions in January, up from 29% in both December and one year ago.

Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in January, up from 16% in December and January 2023.

Distressed sales[v] – foreclosures and short sales – represented 2% of sales in January, virtually unchanged from last month and the previous year.

Mortgage Rates

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.77% as of February 15. That’s up from 6.64% the previous week and 6.32% one year ago.

Single-family and Condo/Co-op Sales

Single-family home sales moved higher to a seasonally adjusted annual rate of 3.6 million in January, up 3.4% from 3.48 million in December but down 1.4% from the prior year. The median existing single-family home price was $383,500 in January, up 5.0% from January 2023.

At a seasonally adjusted annual rate of 400,000 units in January, existing condominium and co-op sales were unchanged from last month and down 4.8% from one year ago (420,000 units). The median existing condo price was $339,400 in January, up 5.7% from the previous year ($321,100).

Regional Breakdown

At 480,000 units, existing-home sales in the Northeast were unchanged from December but down 5.9% from January 2023. The median price in the Northeast was $434,300, up 10.1% from the prior year.

In the Midwest, existing-home sales increased 2.2% from one month ago to an annual rate of 950,000 in January, down 3.1% from last year. The median price in the Midwest was $271,700, up 7.6% from January 2023.

Existing-home sales in the South rose 4.0% from December to an annual rate of 1.84 million in January, a decline of 1.6% from the previous year. The median price in the South was $345,100, up 4.1% from one year ago.

In the West, existing-home sales elevated 4.3% from a month ago to an annual rate of 730,000 in January and grew 2.8% from one year earlier. The median price in the West was $572,100, up 6.3% from January 2023.

“More listings will help Americans move,” said NAR President Kevin Sears, broker-partner of Sears Real Estate in Springfield, Massachusetts. “That’s why NAR has pushed for the passage of H.R. 1321 – The More Homes on the Market Act – which would lower the tax hit on home sales and bring additional inventory to the market.”

 

[i] 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 benchmarks 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% of total home sales, are based on a much larger data sample – about 40% 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.

[ii] 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% of transactions and condos were measured only on a quarterly basis).

[iii] 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.

[iv] Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s REALTORS® Confidence Index, which include all types of buyers. The annual study only represents primary residence purchases, and does not include investor and vacation home buyers. Results include both new and existing homes.

[v] 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 nar.realtor.

Posted On Thursday, 22 February 2024 07:01 Written by

With mortgage rates and home prices as high as they’ve been, many would-be buyers stayed out of the housing market in 2023. But the latest LendingTree data shows that of those who remained active in the market, first-timers were much more common than those who already owned a home.

Through a nationwide analysis of mortgage offers given to users of the LendingTree platform in 2023, we found that nearly 2 out of 3 went to first-time buyers. Here's what else we found. 

  •  Nationwide, 65.25% of mortgage offers made on the LendingTree platform in 2023 went to those who identified as first-time homebuyers. 
  • The states where the highest shares of mortgage offers are given to first-time buyers are New York, California and New Jersey. 77.30% of offers in New York went to first-time buyers. The shares were 73.15% and 72.22% in California and New Jersey. 
  • The states where the lowest shares of mortgage offers are given to first-time buyers are South Dakota, Alaska and Arkansas. In South Dakota, 54.29% of mortgage offers went to first-timers. That figure was only slightly higher in Alaska, at 54.38%. It was 56.19% in Arkansas.
  • On average, loan amounts for first-time buyers across the 50 states are $49,021 smaller than those of repeat buyers. Credit scores are about 32 points lower while down payments are an average of $42,218 lower.

You can check out our full report here: https://www.lendingtree.com/home/mortgage/first-time-homebuyers-study/

LendingTree's Senior Economist and report author, Jacob Channel, had this to say:

"Even in the face of relatively high rates and steep home prices, first-timers on LendingTree’s platform still received a relatively large share of offers in 2023. While this goes to show that first-timers are still buying, it’s important to note that it doesn’t mean that the housing market was totally overrun by newbies. On the contrary, 2023’s housing market wasn’t very active compared to previous years. This means that first-time buyers weren’t necessarily flooding the market, so much as they just happened to make up a bigger portion of a smaller overall pool of would-be mortgage borrowers."

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