Tag Archives: financial
US home sales up to highest rate for 18 months, latest data shows
Existing home sales in the United States jumped in March to their highest annual rate in 18 months, while unsold inventory showed needed improvement, according to the latest index. Data from the National Association of Realtors shows that this growth was led by the Midwest, but all major regions experienced strong sales gains in March and are above their year on year sales pace. Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, increased 6.1% 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. Sales have increased year on year for six consecutive months and are now 10.4% above a year ago, the highest annual increase since August 2013. March's sales increase was the largest monthly increase since December 2010. According to Lawrence Yun, NAR chief economist, the housing market appears to be off to an encouraging start this spring. ‘After a quiet start to the year, sales activity picked up greatly throughout the country in March,’ he said. ‘The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years,’ he explained. Prices are also climbing steadily. The median existing home price for all housing types in March was $212,100, which is 7.8% above March 2014. This marks the 37th consecutive month of year on year price gains and the largest since February 2014 when it was 8.8%. ‘For sales to build upon their current pace, home owners will increasingly need to be confident in their ability to sell their home while having enough time and choices to upgrade or downsize. More listings and new home construction are still needed to tame price growth and provide more opportunity for first-time buyers to enter the market,’ said Yun. The percent share of first time buyers was 30% in March, marking the third time since last March that the first time buyer share was at or above 30%. First time buyers represented 29% of all buyers last month compared to 30% in March 2014. All cash sales were 24% of transactions in March, down from 26% in February and down considerably from a year ago when they were 33%. Individual investors, who account for many cash sales, purchased 14% of homes in March, unchanged from last month and down from 17% in March 2014. Some 70% of investors paid cash in March. Distressed sales, that is foreclosures and short sales, amounted to 10% of sales in March, down from 11% in February and 14% a year ago. Some 7% of March sales were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 16% below market value in March, similar to the 17% recorded in in February while short sales were also discounted 16%, up from 15% in February. Properties… Continue reading
Negative equity worse in some parts of US despite home values rising
Home prices are rising in the US but the rate of home owners who owe more on their mortgage than their homes are worth is stalled and even worsening in some places for the first time since the recession, according to a new report. Negative equity is going up in 21 of the largest 50 housing markets, indicating many underwater homes are not rising in value, says the latest review from real estate data firm Zillow. More than a quarter of mortgaged homes are underwater in some markets in Florida and the Midwest. The national negative equity rate is 16.9% yet home values rose 5.9% nationally last year. The report also shows that the at the lower end of the market homes are far more likely to be worth less than the balance of their mortgage and the analysis suggests that is because low end homes are losing value. At the peak of the real estate crisis, more than 15 million home owners owed more on their mortgages than their homes were worth, putting them in negative equity. Foreclosures, short sales and rapidly rising home values freed nearly half of those home owners, but now that trend has reversed in many metros. Indeed, three years into the recovery, home values overall continued to recover while owners of the lowest valued homes, those most likely to be stuck in negative equity, were left behind. ‘Higher negative equity rates have become the new normal. We've long been expecting the negative equity rate to fall more slowly as home value growth also slows, and unfortunately that's exactly what we're seeing,’ said Zillow chief economist Stan Humphries. ‘Compounding the problem is the fact that negative equity is decidedly not an equal opportunity predator, and looms larger over the bottom 10% of homes, where home owners are least prepared to withstand the assault,’ he added. In Atlanta some 49% of homes in the bottom third of home values are in negative equity, compared to 11% of mortgaged homes in the highest valued third. Among large metros, Virginia Beach at 28.3%, Jacksonville at 27%, Las Vegas at 24.4% and Atlanta at 26.1% had the highest rates of negative equity. Continue reading
Major UK parties but housing at top of election agenda
Housing has become one of the major issues in the UK’s forthcoming general election with all the major parties making pledges to attract voters. The Conservative party said it will extend the Right to Buy scheme and the Liberal Democrats have announced plans to build 300,000 more homes a year and ensure everyone has a decent place to live. The Labour party says it will build at least 200,000 new homes a year by 2020 with first priority for local first time buyers and introduce three year housing tenancies with a ceiling on excessive rent rises. Prime Minister David Cameron said that the £18billion extension of Margaret Thatcher's Right to Buy scheme will be extended to 1.3million families living in housing association properties. It would be funded by requiring councils to sell off the most expensive social housing when it becomes vacant, replacing it on a one to one basis with more affordable property. The existing Right to Buy allows tenants living in council owned properties local authority tenants to buy houses and flats at a discount of as much as 70% up to a maximum of £102,700 in London and £77,000 across the rest of England. Around 500,000 housing association tenants currently have no purchase rights and 800,000 who qualify only for much less generous discounts of £16,000 or less. But the reaction has been mixed. The Conservative plans will not necessarily boost house building and could weaken the future capacity of the social renting sector to provide a safety net for those who cannot afford to house themselves via the private market, according to Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA). ‘The risk is that in this manifesto along with others we will get more short term initiatives and that politicians will continue to avoid owning up to the need for a fully formed housing strategy that balances support for people across all forms of housing tenure. Delaying the inevitable will only result in more difficulties in the long term,’ he explained. Adam Challis, head of residential research at JLL, described as good politics, but terrible policy. ‘This is exactly the kind of short termist thinking that the countries' 4.7 million households in social housing don’t need, not to mention the same number again of aspiring owners in private renting,’ he said. ‘Right to Buy benefits a select few while condemning the vast majority to longer waiting lists and fewer choices. At a time when we are building barely half the homes this country needs, we need a government that is interested in genuine solutions to the housing crisis rather than cheap vote winners,’ he added. Colleague Richard Petty, head of affordable housing at JLL, said that extending the Right to Buy to housing associations will seriously damage their ability to help the country build its way out of the housing crisis. ‘They rely on private finance to build now, not government grant. The… Continue reading
