Tag Archives: america
Home prices rising steadily in most metro areas in the US, new data shows
A climb in home sales throughout the United States amidst insufficient supply caused home prices to steadily rise in most metro areas during the second quarter of 2015. The median existing single family home price increased in 93% of measured markets, with 163 out of 176 metropolitan statistical areas (MSAs) showing gains, according to the latest quarterly report from the National Association of Realtors. Just 13 areas or 7% recorded lower median prices from a year earlier and the number of rising markets in the second quarter increased compared to the first quarter, when price gains were recorded in 85% of metro areas. The data also shows that 34 metro areas or 19% experienced double digit increases but this was a decline from the 51 metro areas in the first quarter while 19 or 11% double digit increases in the second quarter of 2014. Lawrence Yun, NAR chief economist, said that the housing market has shifted into a higher gear in recent months. ‘Steady rent increases, the slow rise in mortgage rates and stronger local job markets fuelled demand throughout most of the country this spring,’ he explained. ‘While this led to a boost in sales paces not seen since before the downturn, overall supply failed to keep up and pushed prices higher in a majority of metro areas. With home prices and rents continuing to rise and wages showing only modest growth, declining affordability remains a hurdle for renters considering homeownership, especially in higher priced markets,’ he added. The national median existing single family home price in the second quarter was $229,400, up 8.2% from the second quarter of 2014 when it was $212,000. The median price during the first quarter of this year increased 7.1% from a year earlier. The five most expensive housing markets in the second quarter were the San Jose, California metro area, where the median existing single family price was $980,000, followed by San Francisco at $841,600, Anaheim-Santa Ana, California at $685,700, Honolulu at $698,600, and San Diego at $547,800. The five lowest cost metro areas in the second quarter were Cumberland where the median single family home price was $82,400, Youngstown-Warren-Boardman, Ohio, at $85,000, Rockford, Illinois, at $94,700, Decatur, Illinois at $96,000, and Elmira, New York at $98,300. Total existing home sales, including single family and condo, increased 6.6% to a seasonally adjusted annual rate of 5.3 million in the second quarter from 4.97 million in the first quarter, and are 8.5% higher than the 4.89 million pace during the second quarter of 2014. ‘The ongoing rise in home values in recent years has greatly benefited homeowners by increasing their household wealth,’ said Yun. ‘In the meantime, inequality is growing in America because the downward trend in the home ownership rate means these equity gains are going to fewer households,’ he added. At the end of the second quarter, there were 2.3 million existing homes available for sale, slightly above the 2.29 million homes for sale at the… Continue reading
Majority of US metro areas experiencing falling home ownership rates, new research shows
Rising home prices in many metro areas in the United States have helped home owners build housing wealth in recent years, according to new research from the National Association of Realtors. But the continued decline in home ownership means the gains are going to fewer people and likely leading to worsening inequality in the nation. The NAR reviewed data on home ownership rates, changes in single family median home prices and a measure of inequality between 2010 and 2013 to estimate wealth and income inequality in 100 of the largest metropolitan statistical areas across the US. The findings reveal that over 90% of metro areas have experienced declining home ownership rates at a time when home values have risen and incomes have remained flat. According to the study, wealth distribution is seen as most unequal in metro areas with the lowest homeownership rates, including high cost areas such as Los Angeles, New York and San Diego. According to Lawrence Yun, NAR chief economist, home prices have steadily recovered in most metro areas in the past five years, providing a boost of $5 trillion in housing wealth from the downturn’s cyclical low for home owners during this time. ‘Home ownership plays a pivotal role in the US economy and has historically been one of the primary sources of wealth accumulation for middle class families,’ he said. ‘Unfortunately, due to an underperforming labour market, insufficient housing supply and overly-stringent underwriting standards since the recession, home ownership has plunged to a rate not seen in over two decades. As a result, the country has become more unequal as the number of homeowners has fallen while the number of renters has significantly risen,’ he added. Yun explained that the inability for renter households to become home owners is leaving them behind financially. A typical homeowner’s net worth climbs because of upticks in home values and declining mortgage balances. On the other hand, renters have likely seen increased rental housing costs and are less likely to have been active investors in the stock market’s strong growth in recent years. NAR’s study examined intensifying or lessoning inequality by measuring the change in the number of owners and renters during the recent period of rising home values. The findings show that an overwhelming 93 out of 100 analysed markets experienced a declining home ownership rate from 2010 to 2013. Because renters typically have much lower net worth than home owners, a metro area’s low homeownership rate is associated with greater wealth inequality. As a result, Los Angeles, New York, Las Vegas, Fresno in California and San Diego were found to have the most unequal wealth distribution. ‘Changes in wealth during this period are especially profound in high cost metro areas that have seen robust price growth. For instance, a typical home owner in San Jose, California, enjoyed an increase of $210,671 in housing wealth while renters were left behind and likely exposed to annual rent increases,’ said… Continue reading
Financial barriers preventing US home renters from buying, new research suggests
Many US home buyers can break even in less than two years if they buy a home instead of renting it, but financial barriers and preference are big factors in the decision to continue renting. A new report covering the fourth quarter of 2014 from US real estate data firm Zillow reveals that buyers break even on a home purchase in less than two years in 66% metro areas. It also says that some 20% of renters say they prefer to rent than buy with more than half, 53%, say financial limitations keep them from buying. Of renters surveyed by Zillow some 16% said they can't qualify for a home loan, 18% said they can't afford taxes, maintenance and other costs associated with home ownership, 13% said they don't have enough savings for a down payment and about a quarter said they struggle to pay their rent. According to the survey, 82% of renters are long term renters, and 57% are long term renters who have lived for a long time in the same home. Just 14% said they aren't staying long enough in the same place to buy. Zillow's survey sheds light on why some renters are not buying homes, despite historically low interest rates, prices that remain below peak levels in many areas and rising rents, however, some 20% of renters said they simply prefer to rent. ‘If the buy versus rent decision were about simple maths, we'd likely have millions more home buyers in the market, because the equation is tilted heavily in favour of buying,’ said Zillow chief economist Stan Humphries. ‘But no matter what the numbers say, buying a home is a huge commitment. Every day, Americans make decisions to buy or rent based on any number of personal dynamics, including preference, flexibility needs, family factors and, yes, financial considerations,’ he explained. ‘There is no right or wrong choice, and it's important that America's housing market maintains a number of affordable options for renters and buyers, no matter their preferences,’ he added. The report points out that over the last year, as home price appreciation has slowed down, the length of time it takes to break even on a home purchase grew slightly in most major metros. The breakeven analysis looks at how long it takes to come out ahead on a home purchase versus renting the same home, recouping the costs of buying, including taxes and maintenance. Among the top 35 metro areas, Dallas-Fort Worth had the lowest breakeven horizon, at 1.2 years. Indianapolis and Detroit were next at 1.3 years. The highest breakeven horizons were in Los Angeles, at 5.1 years, Washington D.C. at 4.2 and San Diego at 3.8 years. The national average is 1.9 years. Zillow's breakeven horizon incorporates all costs associated with buying and renting, including upfront payments, closing costs, anticipated monthly rent and mortgage payments, insurance, taxes, utilities, maintenance, and renovation costs. The horizon also factors in home equity growth for buyers, and, for… Continue reading
