Existing Home Sales Up a Surprising 7% Last Month |
Home sales in the U.S. rebounded in September.
Existing home sales rose 7% to a seasonally adjusted 6.29 million units in September from a month earlier, according to the National Association of Realtors (NAR). The results outpaced analyst expectations of a 3.6% increase, according to Bloomberg consensus estimates.
“This autumn looks to be the second best autumn home-sales season in 15 years,” Lawrence Yun, chief economist at NAR, said during a press conference releasing the new data. Read more from Yahoo Finance.
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Housing Affordability Improves for Second Straight Month |
For the second month in a row, national housing affordability improved in August, according to the latest National Association of Realtors housing affordability index report.
This improvement came as monthly mortgage payments fell by 1.1% while median family income fell by 0.7%. As of August 2021, the 30-year fixed mortgage rate was 2.89% compared to 3% a year prior. Median existing home sales prices rose 15.6% in the same time period.
To calculate the housing affordability index, a 20% down payment and a 25% ratio of principal and interest payment to income, is assumed. Index values over 100 indicated that a family with the median income had more than the income required to afford a median-priced home.
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Rents Post Biggest Increase Since 2006 |
Demand is surging for rental units and that is pushing up prices. The amount homeowners could receive from renting their home increased by 0.4%, which may seem small but is the largest one-month increase since 2006, according to the latest Consumer Price Index. Rents of primary residences jumped by 0.5%, the largest one-month increase since 2001.
“This might just be an overshoot after a couple of relatively modest increases, but we can’t rule out the idea that the fundamentals—rapid house price gains, more aggressive landlord pricing, low inventory, and faster wage growth—are pushing up the trend,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, told MarketWatch.
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Greater New Construction Gives Move-Up Buyers a Chance |
Single-family new-home construction is up 17% compared to a year ago and up by 23% compared to 2019, prior to the pandemic, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported Tuesday.
“More housing inventory will therefore steadily emerge,” says Lawrence Yun, chief economist of the National Association of REALTORS®. “Newly constructed homes are generally larger in size and more expensive than existing homes, and not geared toward first-time buyers. Nonetheless, more supply of these homes allows trade-up buyers to make their move and in the process place their previous homes on the market." Read more from NAR's Realtor Magazine.
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Homebuyer Bidding War Rate Drops to 2021 Low in September |
In September, 58.9% of home offers written by Redfin agents faced competition—a record low for 2021. That’s down from a revised rate of 60.8% in August and a peak of 74.3% in April. September marked the fifth-straight month of declines, putting the bidding-war rate on par with the level seen a year earlier (58.3%). Read more from Redfin.
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It’s trendy to paint a brick house white. Some homeowners are jumping on the bandwagon painting their more dated red brick, for example, a more contemporary white. But others have strong views that you should never paint over original brick.
Painting a house can offer a modern update to the exterior of a home and boost its curb appeal, according to a 2021 report on the exterior and interior color trends by Clever Real Estate. “Going with a trendy color is a great way to maximize your home’s appeal—but don’t get lost in the crowd” so the home’s exterior looks the same as every other house on the block, the report notes. Exterior color schemes usually change every 10 to 20 years. Some of the trendiest exterior colors for 2021 include whites, grays, or darker slate tones, according to Consumer Reports. Read more from NAR's Realtor Magazine.
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Mortgage rates continued to rise this week due to the trajectory of both the economy and the pandemic. Even as the availability of existing homes is improving, prices remain high due to homebuyer demand and limitations on housing starts and permits resulting from the ongoing labor and material shortages. Despite these countervailing forces, we expect the housing market to remain strong as we head into the end of the year. |
We hope you enjoyed this week's Market News. For more information about how PMA can help you, please contact us. |
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Information and analysis is obtained through third parties and is deemed accurate but not guaranteed. Philadelphia Mortgage Advisors is a licensed mortgage lender by the PA Dept. of Banking and Securities, NJ Dept. of Banking & Insurance, the state of DE, the Florida Office of Financial Regulation, MD Mortgage Lender #23004 and VA State Corporation Commission #MC - 6797. NMLS #128570. |
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