Existing-Home Sales Slip 3.2 Percent in January

Washington, D.C. – February 21, 2018 (nar.realtor) Existing-home sales slumped for the second consecutive month in January and experienced their largest decline on an annual basis in over three years, according to the National Association of Realtors®. All major regions saw monthly and annual sales declines last month.

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Total existing-home sales(1), https://www.nar.realtor/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, sank 3.2 percent in January to a seasonally adjusted annual rate of 5.38 million from a downwardly revised 5.56 million in December 2017. After last month’s decline, sales are 4.8 percent below a year ago (largest annual decline since August 2014 at 5.5 percent) and at their slowest pace since last September (5.37 million).

Lawrence Yun, NAR chief economist, says January’s retreat in closings highlights the housing market’s glaring inventory shortage to start 2018. “The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month,” he said. “While the good news is that Realtors® in most areas are saying buyer traffic is even stronger than the beginning of last year(2), sales failed to follow course and far lagged last January’s pace. It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”

The median existing-home price(3) for all housing types in January was $240,500, up 5.8 percent from January 2017 ($227,300). January’s price increase marks the 71st straight month of year-over-year gains.

Total housing inventory(4) at the end of January rose 4.1 percent to 1.52 million existing homes available for sale, but is still 9.5 percent lower than a year ago (1.68 million) and has fallen year-over-year for 32 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace (3.6 months a year ago).

“Another month of solid price gains underlines this ongoing trend of strong demand and weak supply. The underproduction of single-family homes over the last decade has played a predominant role in the current inventory crisis that is weighing on affordability,” said Yun. “However, there’s hope that the tide is finally turning. There was a nice jump in new home construction in January and homebuilder confidence is high. These two factors will hopefully lay the foundation for the building industry to meaningfully ramp up production as this year progresses.”

First-time buyers were 29 percent of sales in January, which is down from 32 percent in December 2017 and 33 percent a year ago. NAR’s 2017 Profile of Home Buyers and Sellers – released in late 2017(5) – revealed that the annual share of first-time buyers was 34 percent.

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage moved higher for the fourth straight month to 4.03 percent in January from 3.95 percent in December. The average commitment rate for all of 2017 was 3.99 percent.

“The gradual uptick in wages over the last few months is a promising development for the housing market, but there’s risk these income gains could be offset by the recent jump in mortgage rates,” said Yun. “That is why the pace of added new and existing supply in the months ahead is worth monitoring. If inventory conditions can improve enough to cool the swift price growth in several markets, most prospective buyers should be able to absorb the higher borrowing costs.”

Properties typically stayed on the market for 42 days in January, which is up from 40 days in December 2017 but down from a year ago (50 days). Forty-three percent of homes sold in January were on the market for less than a month.

Realtor.com®’s Market Hotness Index, measuring time-on-the-market data and listings views per property, revealed that the hottest metro areas in January were San Francisco-Oakland-Hayward, Calif.; San Jose-Sunnyvale-Santa Clara, Calif.; Vallejo-Fairfield, Calif.; Midland, Texas; and Colorado Springs, Colo.

Real Estate Infographic

NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty, says Realtors® in several markets are reporting that the spring buying season appears to be starting early this year. “Those planning to buy a home this spring should look into getting pre-approved for a mortgage now and start having those serious conversations with their real estate agent on what they’re looking for in a home and where they want to buy,” she said. “With demand exceeding supply in most areas, competition will only heat up in the months ahead. Beginning the home search now could lead to a successful and less stressful buying experience.”

All-cash sales were 22 percent of transactions in January, which is up from 20 percent in December 2017 but down from 23 percent a year ago. Individual investors, who account for many cash sales, purchased 17 percent of homes in January, up from 16 percent both last month and a year ago.

Distressed sales(6) – foreclosures and short sales – were 5 percent of sales in January, unchanged from December 2017 and down from 7 percent a year ago. Four percent of January sales were foreclosures and 1 percent were short sales.

Single-family and Condo/Co-op Sales
Single-family home sales declined 3.8 percent to a seasonally adjusted annual rate of 4.76 million in January from 4.95 million in December, and are now 4.8 percent below the 5.00 million pace a year ago. The median existing single-family home price was $241,700 in January, up 5.7 percent from January 2017.

Existing condominium and co-op sales rose 1.6 percent to a seasonally adjusted annual rate of 620,000 units in January, but are still 4.6 percent below a year ago. The median existing condo price was $231,600 in January, which is 7.1 percent above a year ago.

Regional Breakdown
January existing-home sales in the Northeast declined 1.4 percent to an annual rate of 730,000, and are now 7.6 percent below a year ago. The median price in the Northeast was $269,100, which is 6.8 percent above January 2017.

In the Midwest, existing-home sales dipped 6.0 percent to an annual rate of 1.25 million in January, and are now 3.8 percent below a year ago. The median price in the Midwest was $188,000, up 8.7 percent from a year ago.

Existing-home sales in the South decreased 1.3 percent to an annual rate of 2.26 million in January, and are 1.7 percent lower than a year ago. The median price in the South was $208,200, up 4.3 percent from a year ago.
Existing-home sales in the West fell 5.0 percent to an annual rate of 1.14 million in January, and are now 9.5 percent below a year ago. The median price in the West was $362,600, up 8.8 percent from January 2017.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE: For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

1. 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 rebenchmarks 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 percent of total home sales, are based on a much larger data sample – about 40 percent 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.

2. According to NAR’s latest Realtors® Confidence Index, the Buyer Traffic Index came in at 69 in January, up from 63 in January 2017.

3. 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.

4. 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 percent of transactions and condos were measured only on a quarterly basis).

5. Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.

6. 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.

Media Contact:

Adam DeSanctis
(202) 383-1178
Email

One Third of New Yorkers Go Over Budget on Housing Costs; Millennials Most Likely to Spend More

StreetEasy’s NYC Housing & Moving Trends Report explores perceptions of affordability among New York renters and owners, their plans to move, and the motivations behind their housing decisions

New York, NY – Feb. 20, 2018 (PRNewswire) New Yorkers pay 1.3 times more for housing in absolute terms than average Americans(i). To accommodate high housing costs, nearly one third of New Yorkers (31 percent) exceeded their initial budget on their current home, according to the new StreetEasy New York City Housing & Moving Trends Report(ii). Homeowners were more likely to overspend: 37 percent went over their initial home budget, compared to 27 percent of renters.

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The StreetEasy report surveyed 1,000 renters and homeowners living across all five boroughs, and details the ways New Yorkers struggle to find an affordable home after the rapid rise in prices and rents over the last decade. According to the survey, there are stark differences in how different generations, homeowners, and renters tackle and perceive the high costs of housing in New York City.

Millennials(iii) are more likely than any other generation to exceed their budget, with 45 percent choosing a more expensive home than they’d planned on, compared to 30 percent of Generation Xers and 19 percent of baby boomers. Millennials are also most likely to consider buying a home in the next year, with more than one third (34 percent) hoping to do so.

Real Estate Infographic

“Younger New Yorkers, many of whom came to New York City to take advantage of the career opportunities it offers, are finding a housing market that is expensive, fast-moving and highly competitive,” said StreetEasy Senior Economist Grant Long. “But despite facing rising housing costs and budgeting constraints, aspirations of owning a home remain high in the city, particularly among millennials. While New Yorkers’ widespread desire to remain in the city is encouraging, the region’s continued success depends on maintaining an adequate supply of affordable homes that fit the priorities of its growing workforce.”

Most surveyed New Yorkers cited budget and number of bedrooms as the most important factors in a home, with 88 percent and 79 percent of residents citing them as a requirement or desire, respectively. Luxury amenities, such as doormen and gyms, ranked as the least important factors. Fifty-four and 64 percent of New Yorkers say these features had no impact on their home decision, respectively.

Asked to rate which factors they required or desired of their current neighborhood, safety and access to public transportation were most important to New Yorkers. Ninety percent of residents cite safety as a requirement or desire, and 87 percent mention access to public transportation — a pattern true for both owners and renters.

Additional report findings:

  • Many New Yorkers perceive New York City as unaffordable (46 percent). However, when asked to rate the affordability of their own homes, just 16 of New Yorkers say their home is unaffordable, revealing a dissonance in the perception of the city’s housing costs.
  • Most New Yorkers would recommend life in NYC (57 percent), particularly millennials (67 percent) and homeowners (65 percent).
  • Renters are significantly more likely to rate the cost of the city negatively: More than half (52 percent) of renters say New York City is unaffordable, compared to 39 percent of homeowners.
  • More than 1 in 3 New Yorkers plan to move in the next year. The majority are considering staying in their borough (71 percent); fewer plan to stay in their neighborhood (36 percent).
  • More than one third (39 percent) of New Yorkers cite the high cost of living as a top reason they would leave, with the desire for a bigger home and to buy a home also ranking highly (32 percent and 29 percent, respectively).

Access the full report:
The full StreetEasy NYC Housing & Moving Trends Report with additional findings and graphics is available to view and download at streeteasy.com/blog/2018-housing-moving-trends-report.

About StreetEasy
StreetEasy is New York City’s leading local real estate marketplace on mobile and the web, providing accurate and comprehensive for-sale and for-rent listings from hundreds of real estate brokerages throughout New York City and the NYC metropolitan area. StreetEasy adds layers of proprietary data and useful search tools to help home shoppers and real estate professionals navigate the complex real estate markets within the five boroughs of New York City, as well as Northern New Jersey.

Launched in 2006, StreetEasy is based in the Flatiron neighborhood of Manhattan. StreetEasy is owned and operated by Zillow Group (NASDAQ: Z and ZG).

StreetEasy is a registered trademark of Zillow, Inc.

(i) United States Census Bureau. 2012 – 2016 American Community Survey. U.S. Census Bureau’s American Community Survey Office, 2016.

(ii) StreetEasy partnered with independent market research firm YouGov to conduct a representative online survey that was fielded in November 2017. The results underwent substantial internal analysis and review by researchers and economists at StreetEasy. This survey gathered information from 1,000 key household decision-makers living in all five boroughs of New York City. Roughly half of the respondents were renters and half were homeowners.

(iii) For the purposes of this report, StreetEasy defined each generation breakdown as the following: generation Z, 18–22 years old; millennials, 23–37 years old; Generation Xers, 38–52 years old; baby boomers, 53–72 years old; and silent generation, 73 years old and above.

Growth Outlook Unchanged Despite Recent Market Volatility

Washington, D.C. – Feb. 15, 2018 (PRNewswire) Rising long-term interest rates and soaring market volatility are not enough to alter the forecast for strong 2.7 percent real GDP growth in 2018, according to the Fannie Mae Economic and Strategic Research Group’s February 2018 Economic and Housing Outlook. With long-term Treasury yields hitting multi-year highs in February and equities experiencing a sudden repricing, downside risks to the forecast are present, particularly if the recent stock market declines are sustained and prove contagious to other markets. Strength in economic fundamentals continues to underpin the current forecast, including recent momentum in domestic demand and a historically healthy labor market. Consumer spending surged in the fourth quarter due to unsustainably strong replacement demand for vehicles damaged by the hurricanes. With that demand satiated, spending growth should moderate in coming quarters but remain the primary driver of headline growth, in part due to increased disposable income from the tax cut. Meanwhile, the generous depreciation provisions of the Tax Cuts and Jobs Act should spur strong growth in capital expenditures. Given that the economy is already approaching full employment, the passage of deficit-financed stimulus in this year’s budget will likely stoke additional overheating concerns. Finally, we expect the first rate hike of the year at the March Fed meeting, a move fully priced in by the market, with continued gradual monetary policy normalization under the new leadership of Fed Chair Jerome Powell.

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“Fiscal Policy and the Fed: Stimulus/Response – our 2018 theme – will be paramount in the months ahead as the economy navigates newfound turbulence and heightened inflationary concerns,” said Fannie Mae Chief Economist Doug Duncan. “While our 2018 growth forecast remains unchanged, upside and downside risks are emerging that are contingent on those policy influences. Legislatively, stimulus from tax reform and the recently passed budget could add to growth. However, if additional growth is accompanied by signs – or even fears – of inflationary pressure, it could complicate the Fed’s attempt at a ‘soft landing’ and may require more aggressive monetary action. On housing, we upped this year’s 30-year fixed mortgage rate forecast by 30 basis points to an average of 4.4 percent during the fourth quarter as a result of the unexpected spike in long-term interest rates at the start of the year. However, we don’t expect rates to play much of a role in total home sales, especially with anticipated stronger disposable household income growth. The ongoing inventory shortages should continue to constrain sales despite otherwise ripe home buying conditions.”

Visit the Economic & Strategic Research site at www.fanniemae.com to read the full February 2018 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary.

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/fanniemae.

Owners of the Least Expensive Homes Gaining Wealth Faster Than Any Other Homeowner

But tight inventory and strong demand for these homes make it difficult for buyers to enter the market

– Owners of starter homes have gained 44 percent in equity over the past five years, while owners of the most valuable homes have gained 27 percent over the same time period.

– Affordable homes in Tampa, Florida saw the greatest appreciation over the past year among the largest U.S. metros, gaining 20 percent in value.

– Seattle and the Bay Area are the only large markets where the most valuable homes are gaining value faster than affordable homes.

Seattle , WA – Feb. 16, 2018 (PRNewswire) Owners of starter homes across the country are gaining equity faster than other homeowners because demand for entry-level homes continues to grow faster than supply.

The phenomenon – which has become more pronounced over the past few years — underscores the power of homeownership to build wealth, particularly among the middle class.

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For this analysis, Zillow® divided the U.S. housing stock into equal thirds based on value and determined the median value of the most and least valuable homes. Over the past year, homes in the most affordable segment of the market, which are often sought after by first-time buyers, gained 8.5 percent in value, compared to a 3.6 percent gain for the most expensive homes. Over the past five years, the difference is even more noticeable — people who own starter homes have seen their equity grow by 44.4 percent, while owners of top-tier homes have gained 26.6 percent.

A home is the biggest financial asset and a significant share of net worth for many homeowners. Less affluent homeowners typically have more of their wealth in their homes than homeowners with a higher net worthi. Owners of more affordable homes are seeing their homes’ value, and therefore their overall wealth, grow rapidly.

“When the housing market crashed, owners of the least valuable homes were especially hard hit, and lost more home value than homeowners at the upper end of the market,” said Zillow senior economist Aaron Terrazas. “Since then, though, demand for less expensive, entry-level homes has built steadily, causing prices to grow rapidly. As a result, these homeowners have been able to build wealth at a faster pace than owners of more expensive homes.”

Strong home value appreciation among more affordable homes is beneficial for people who own those homes, but also makes it difficult for buyers trying to enter the market. Inventory among the most affordable homes is extremely limited, making for a highly competitive market going into home shopping season — there are nearly 18 percent fewer entry-level homes available now than a year ago.

Among the largest U.S. housing markets, owners of the cheapest homes in Tampa, Florida are seeing the greatest gains in home equity. Over the past year, these homes have gained 20.4 percent in value. Las Vegas homeowners are close behind. The most affordable homes there have appreciated 19.9 percent from last year.

San Francisco, Seattle and San Jose, California are the only large markets where the most expensive homes are gaining value faster than starter homes.

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Zillow

Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

(i) https://www.zillow.com/research/black-hispanic-home-wealth-16753/

Redfin: Strong January Home Price Growth and Declining Inventory Signal Another Competitive Spring for Homebuyers

Home Sales Fell in January Due to Inventory Shortage and Tax Reform Uncertainty

Seattle, WA – Feb. 15, 2018 (PRNewswire) (NASDAQ: RDFN) — Home prices increased 7.8 percent year over year in January, according to Redfin (www.redfin.com), the next-generation real estate brokerage. The median sale price was $280,500 across the markets Redfin services. Sales were down 7.9 percent annually as the ongoing inventory shortage showed no signs of ending. The number of homes for sale in January dropped by 14.4 percent, the largest year-over-year decline in 28 consecutive months of falling supply.

The typical home that sold in January found a buyer after 53 days on the market, six days faster than January 2017. The percentage of homes that sold above list (19.2%) and the average sale to list price ratio (97.8%) were both up slightly compared to January of last year, setting the stage for a spring market that could be even more competitive than last year.

“Sales volume is typically lowest in January, so while sales fell further than normal, it is not a major cause for concern,” said Redfin senior economist Taylor Marr. “Redfin agents in high-tax states reported that some buyers were hesitant in November and December given the uncertainty around tax reform, which passed in late December. This uncertainty contributed to the drop in January home sales.”

Marr says potential move-up buyers are now reassessing whether it makes sense to list their homes in the face of higher mortgage rates and less favorable tax treatment for their next home. Some buyers have determined lower deductions may be offset by other tax cuts, but those tax cuts won’t hit buyers’ paychecks for a couple months.

Redfin agents report eagerness among buyers to purchase a home before mortgage rates inch up further and prices rise any higher– if they can find a home they want to buy.

“Many buyers are concerned about interest rates, but the biggest driver of this market is inventory, not rates,” said Redfin Washington, D.C., agent Joe Krupsaw. “None of my clients have said they’ll change their plans to buy if rates increase. I think when rates hit 4.5 percent we’ll see some buyers reassess their budgets and what they can afford, but they won’t stop looking for a home.”

Just 6 percent of respondents to a recent survey commissioned by Redfin said they would cancel their home buying plans if rates rose above 5 percent. Twenty-seven percent said it would cause them to slow their search, 25 percent said it would have no impact, 21 percent said it would increase their urgency to buy, and another 21 percent said they would look for a less expensive home.

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San Jose Homes Sold a Month Faster than Last Year

For yet another month, San Jose was the fastest and most competitive market in the country. The typical home found a buyer in 12 days, 30 days fewer than last January. San Jose homes sold for an average of 9 percent over the asking price, which is the highest sale-to-list price ratio Redfin has recorded in that metro area.

“Buyers in San Jose have shown a complete disregard for recent comparable offers and are coming in swinging in order to win a home,” said Redfin Silicon Valley agent Kalena Masching. “It has gotten to the point where buyers are submitting preemptive offers that are so good it’s not worth the seller to wait for an official offer deadline or the first open house.”

Other January Highlights

Competition

  • San Jose, CA was the fastest market, with half of the homes that sold last month under contract in just 12 days, down from 42 days from a year earlier. Seattle, WA and Oakland, CA were the next fastest markets with 16 and 17 median days on market, followed by Denver, CO (19) and San Francisco, CA (23).
  • The most competitive market in January was San Jose, CA where 75.5% of homes sold above list price, followed by 62.2% in Oakland, CA, 60% in San Francisco, CA, 41.7% in Seattle, WA, and 37.6% in Tacoma, WA.

Prices

  • Memphis, TN had the nation’s highest price growth, rising 24.6% since last year to $162,000. San Francisco, CA had the second highest growth at 23.8%, followed by San Jose, CA (21.6%), Baton Rouge, LA (17.8%), and Seattle, WA (15.4%).
  • Four metros saw price declines in January: Milwaukee, WI (-2.7%), Camden, NJ (-2.6%), Birmingham, AL (-2.3%), and Baltimore, MD (-1.8%).

Sales

  • Only 11 out of 73 metros saw positive sales growth in January from last year. Salt Lake City, UT led the nation in year-over-year sales growth, up 11.9%, followed by Greenville, SC, up 11.8%. Kansas City, MO rounded out the top three with sales up 7.5% from a year ago.
  • Michigan metro areas saw the largest declines in sales since last year, led by Detroit, MI where sales declined 29.7%. Home sales in Grand Rapids, MI and Warren, MI declined by 29.1% and 28.4%, respectively.

Inventory

  • San Jose, CA had the largest decrease in overall inventory, falling 43.6% since last January. Rochester, NY (-37.5%), Buffalo, NY (-37.1%), and Atlanta, GA (-35.4%) also saw far fewer homes available on the market than a year ago.
  • Only two metro areas had increases in the number of homes for sale in January: Baton Rouge, LA (16.7%) and Honolulu, HI (7.6%).

To read the full report, complete with data and charts, click here.

About Redfin
Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry’s lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $50 billion in home sales.

Fourth Quarter Home Prices Up 5.3 Percent; Nearly Two-Thirds of Markets at All-Time High

Washington, D.C. – February 13, 2018 (nar.realtor) An uptick in existing-home sales in the final three months of 2017 pulled down housing inventory to an all-time low and kept home-price growth at its recent robust pace, according to the latest quarterly report by the National Association of REALTORS®.

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The national median existing single-family home price in the fourth quarter was $247,800, which is up 5.3 percent from the fourth quarter of 2016 ($235,400). The median price during last year’s third quarter climbed 5.6 percent from the third quarter of 2016.

Single-family home prices last quarter increased in 92 percent of measured markets, with 162 out of 177 metropolitan statistical areas(1) (MSAs) showing sales price gains in the fourth quarter compared to a year ago. Twenty-six metro areas (15 percent) experienced double-digit increases (11 percent in the third quarter), and 18 metros eclipsed their previous peak sales price. Overall, home prices are now at their all-time high in 114 markets (64 percent).

Lawrence Yun

Lawrence Yun

Lawrence Yun, NAR chief economist, says 2017 capped off another year where home prices in most markets ascended at a steady clip amidst improving sales and worsening inventory conditions. “A majority of the country saw an upswing in buyer interest at the end of last year, which ultimately ended up putting even more strain on inventory levels and prices,” he said. “Remarkably, home prices have risen a cumulative 48 percent since 2011, yet during this same timeframe, incomes are up only 15 percent. In the West region, where very healthy labor markets are driving demand, the gap is even wider.”

Added Yun, “These consistent, multi-year price gains have certainly been great news for homeowners, and especially for those who were at one time in a negative equity situation; however, the shortage of new homes being built over the past decade is really burdening local markets and making homebuying less affordable.”

Total existing-home sales(2), including single family and condos, increased 4.3 percent to a seasonally adjusted annual rate of 5.62 million in the fourth quarter from 5.39 million in the third quarter, and are 1.3 percent higher than the 5.55 million pace during the fourth quarter of 2016.

At the end of the fourth quarter, there were 1.48 million existing homes available for sale(3), which was 10.3 percent below the 1.65 million homes for sale at the end of the fourth quarter in 2016. The average supply during the fourth quarter was 3.5 months – down from 4.2 months in the fourth quarter of last year.

The national family median income rose to $74,492(4) in the fourth quarter, but overall affordability still edged downward compared to a year ago because of the combination of rising mortgage rates and home prices. To purchase a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $55,585, a 10 percent down payment would require an income of $52,659, and $46,808 would be needed for a 20 percent down payment.

“While tight supply is expected to keep home prices on an upward trajectory in most metro areas in 2018, both the uptick in mortgage rates and the impact of the new tax law on some high-cost markets could cause price growth to moderate nationally,” said Yun. “In areas where homebuilding has severely lagged job creation in recent years, it’s going to be a slow slog before there’s enough new construction to cool price appreciation to a pace that aligns more closely with incomes.”

The five most expensive housing markets in the fourth quarter were the San Jose, California metro area, where the median existing single-family price was $1,270,000; San Francisco-Oakland-Hayward, California, $920,000; Anaheim-Santa Ana-Irvine, California, $785,000; urban Honolulu, $760,600; and San Diego-Carlsbad, $610,000.

The five lowest-cost metro areas in the fourth quarter were Cumberland, Maryland, $84,600; Youngstown-Warren-Boardman, Ohio, $90,200; Decatur, Illinois, $100,000; Binghamton, New York, $108,900; and Wichita Falls, Texas, $110,400.

Metro area condominium and cooperative prices – covering changes in 61 metro areas – showed the national median existing-condo price was $237,500 in the fourth quarter, up 7.0 percent from the fourth quarter of 2016 ($222,000). Eighty-four percent of metro areas showed gains in their median condo price from a year ago.

Regional Breakdown
Total existing-home sales in the Northeast jumped 10.1 percent in the fourth quarter but are 0.4 percent below the fourth quarter of 2016. The median existing single-family home price in the Northeast was $268,100 in the fourth quarter, up 4.2 percent from a year ago.

In the Midwest, existing-home sales rose 6.0 percent in the fourth quarter and are 2.3 percent above a year ago. The median existing single-family home price in the Midwest grew 7.2 percent to $193,800 in the fourth quarter from the same quarter a year ago.

Existing-home sales in the South increased 3.8 percent in the fourth quarter and are 1.8 percent higher than the fourth quarter of 2016. The median existing single-family home price in the South was $221,600 in the fourth quarter, 5.0 percent above a year earlier.

In the West, existing-home sales in the fourth quarter were at an annualized rate of 1.23 million (unchanged from the third quarter), up 0.3 percent from a year ago. The median existing single-family home price in the West increased 7.2 percent to $374,400 in the fourth quarter from the fourth quarter of 2016.

The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE: NAR releases quarterly median single-family price data for approximately 175 Metropolitan Statistical Areas (MSAs). In some cases the MSA prices may not coincide with data released by state and local REALTORS® associations. Any discrepancy may be due to differences in geographic coverage, product mix, and timing. In the event of discrepancies, REALTORS® are advised that for business purposes, local data from their association may be more relevant.

Data tables for MSA home prices (single family and condo) are posted at https://www.nar.realtor/research-and-statistics/housing-statistics/metropolitan-median-area-prices-and-affordability. If insufficient data is reported for a MSA in particular quarter, it is listed as N/A. For areas not covered in the tables, please contact the local association of REALTORS®.

1. Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. NAR adheres to the OMB definitions, although in some areas an exact match is not possible from the available data. A list of counties included in MSA definitions is available at: http://www.census.gov/population/estimates/metro-city/List4.txt (link is external).

Regional median home prices are from a separate sampling that includes rural areas and portions of some smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.

Median price measurement reflects the types of homes that are selling during the quarter and can be skewed at times by changes in the sales mix. For example, changes in the level of distressed sales, which are heavily discounted, can vary notably in given markets and may affect percentage comparisons. Annual price measures generally smooth out any quarterly swings.

NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series dates back to 1989.

Because there is a concentration of condos in high-cost metro areas, the national median condo price often is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. As the reporting sample expands in the future, additional areas will be included in the condo price report.

2. The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co-operative housing.

3. 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 percent of transactions and condos were measured only on a quarterly basis).

Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.

4. Income figures are rounded to the nearest hundred, based on NAR modeling of Census data. Qualifying income requirements are determined using several scenarios on downpayment percentages and assume 25 percent of gross income devoted to mortgage principal and interest at a mortgage interest rate of 3.9%.

NOTE: Existing-Home Sales for January will be released February 21, and the Pending Home Sales Index for January will be released February 28; release times are 10:00 a.m. ET.

Media Contact:

Adam DeSanctis
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