Existing home sales in January rose to the highest annual rate in six months, reports the National Association of Realtors (NAR). Price growth is on the rise, and all regions saw a rise in home sales except for the West during this period. The 0.4 percent month-over-month increase nationally is by no means a spike, but conditions are normalizing.
Meanwhile, the S&P Case-Shiller report today indicates that in November 2015 (the most recent month of reporting), home prices rose 5.4 percent compared to November of the previous years, with three cities standing out: Portland (up 11.4 percent), San Francisco (up 10.3 percent), and Denver (up 10.2 percent).
The Consumer Confidence Index took a hit in February, influenced primarily by uncertainty in economic conditions worldwide and in politics.
Consumers planning to purchase a home in the next six months fell from 7.4 percent last month to 5.3 percent in January, marking a six month low.
Trulia Chief economist, Dr. Ralph McLaughlin said in a statement, “Today’s flurry of reports suggests the housing market recovery continues to charge ahead despite concern over global economic conditions, although homebuyers could be getting nervous.”
Existing sales “on solid footing”
As the sales pendulum swings, NAR chief economist, Dr. Lawrence Yun says the year kicked off “on solid footing.”
“The housing market has shown promising resilience in recent months, but home prices are still rising too fast because of ongoing supply constraints,” Dr. Yun said. “Despite the global economic slowdown, the housing sector continues to recover and will likely help the U.S. economy avoid a recession.”
The median existing home price rose 8.2 percent year-over-year to $213,800, and inventory rose 3.4 in January (down 2.2 percent for the year).
“The spring buying season is right around the corner and current supply levels aren’t even close to what’s needed to accommodate the subsequent growth in housing demand,” notes Dr. Yun. “Home prices ascending near or above double-digit appreciation aren’t healthy – especially considering the fact that household income and wages are barely rising.”
The share of first-time buyers remained at 32 percent in January, and all-cash sales represented 26 percent of transactions.
NAR reports that properties typically stayed on the market for 64 days in January, an increase from 58 days in December but below the 69 days in January 2015. S
NAR Pres credits H.R. 3700
The association indicates this spring could be “tough” for homebuyers, but NAR President Tom Salomone, said Realtors® overwhelmingly applauded the recent U.S. House of Representatives passage of H.R. 3700, the “Housing Opportunity Through Modernization Act.”
Salomone observes, “This legislation contains a number of initiatives that put homeownership in reach for more families, including several reforms to current Federal Housing Administration restrictions on condominium financing. Now that the House has overwhelmingly voted in support of the bill, we look forward to working with our industry partners to advance it through the Senate.”