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Thursday, August 22, 2013

Home Prices Up 13.5% Over Past Year

Rising interest rates took a bite out of home sales in high-priced markets, but nationally, home prices still rose in June, according to the latest data from the NATIONAL ASSOCIATION OF REALTORS®.
The number of homes sold during June, declined a scant 1.2%. If the current pace continues, about 5 million homes will change hands this year. That’s 15.2% more home sales than 2012, NAR data shows.

So far, interest rates haven’t risen far enough to slow down the real estate market recovery, said NAR Chief Economist Lawrence Yun. “Affordability conditions remain favorable in most of the country, and we’re still dealing with a large pent-up demand,” he said. “However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii, and the New York City metro area market.”

The 30-year, conventional, fixed-rate mortgage rose to 4.07% in June from 3.54% in May, and is the highest since October 2011 when it was also 4.07%, according to Freddie Mac.

5-Month Supply of Housing for Sale

At the end of June, there were 2.19 million existing homes for sale. At the current sales rate, that’s a 5.2-month supply. The number of homes listed for sale is 7.6% below a year ago, when there was a 6.4-month supply of homes for sale.

“Inventory conditions will continue to broadly favor sellers and contribute to above-normal price growth,” Yun said.

Home Prices Still Rising

Nationally, median existing-home prices rose 13.5% in June to $214,200. Prices have now risen for 16 straight months.

The median existing single-family home sold for $214,700 in June, up 13.2% from a year ago.
The median existing condo sold for $210,200 in June, up 15.4% from June 2012.

Distressed homes – foreclosures and short sales – were 15% of June sales, down from 18% in May, and are the lowest share since monthly tracking began in October 2008. By comparison, 26% of last year’s sales were distressed homes.

The decline in sales of distressed homes, which typically sell at a reduced price, accounts for some of the increase in home prices. Foreclosures sold for an average discount of 16% below market value in June, while short sales were discounted 13%.

Rising home prices have helped home owners who were underwater (meaning they owed more on their mortgage than their home was worth) regain home equity, said NAR President Gary Thomas
“Of those previously underwater owners, 53% were planning to buy another home and 22% intend to rent, but 25% weren’t sure what they’d do. In addition, 47% REALTORS® report they have potential sellers who are waiting for additional price appreciation before they sell,” Thomas said.

Homes Selling Quickly

Nearly half (47%) of all homes sold in June were on the market for less than a month. The median time on market for all homes was 37 days in June, down from 41 days in May. That’s 47% faster than the 70 days on market reported in June 2012. Short sales were on the market for a median of 68 days, while foreclosures typically sold in 39 days and non-distressed homes took 35 days.

Who’s Buying Homes

First-time buyers accounted for 29% of purchases in June, compared with 28% in May and 32% in June 2012. “First-time buyers should be closer to 40% of the market, but they’re held back by the frictions of tight credit and very limited inventory in the lower price ranges in most of the U.S.,” Yun said.
About one-third of sales (31%) were made to buyers paying cash. Investors, who account for many of those cash sales, bought 17% of the homes sold in June.

Regional Home Sales

Here’s how home sales stacked up in the four U.S. regions in June:
  • Northeast: Down1.6% with median price at $270,400; 6.8% price increase from a year ago.
  • Midwest: Unchanged in June. Median price is $170,100, up 8.9% from June 2012.
  • South: Slipped 1.5% and median price is now $186,300. That’s 13.7% above a year ago.
  • West: Declined 1.6% with ongoing supply constraints. Median price is $282,000, a jump of 19.9% from June 2012.

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