FOX Business’ Gerri Willis talks about how houses are flying at the record pace of the market and says that all eyes are on these releases of real estate data.
SILVER SPRING, Md. (AP) – Encouraged by ultra-low mortgage rates, home buyers last month snapped up a limited supply of existing homes, causing the rate of purchases to jump by a record high of 24.7%.
HOME PRICE CLIMBING VIRGIN OF A RECORD IN CORONAVIRUS PANDEMIC AS BUYERS LOOK RIGHT
The rise in July in home sales reported Friday by the National Association of Realtors marked the second straight month of faster purchases. The back-to-back increases have helped stabilize the home buying market, which only froze early this spring when the viral pandemic erupted across the United States.
With the July increase, after an annual adjusted annual rate of 5.86 million, purchases of existing homes are now up 8.7% from a year ago. Close to record-low mortgage rates have made home sales more affordable for buyers, and many are working on capitalizing those loans. The average rate on a 30-year fixed-rate mortgage is now 2.99%, mortgage buyer Freddie Mac said Thursday. A year ago, it averaged 3.55%.
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In some of the country’s most expensive housing markets – particularly New York and San Francisco – real estate professionals say they’re seeing more people leaving high-rent apartments to buy homes in suburban suburbs. The loss of urban facilities and fear of the risk of infection may contribute to this trend.
But nationally, an analysis by Zillow has found that urban and suburban areas show similar strength. Many suburbs have become markets of hot sellers, Zillow said, but so have many urban areas.
“There is some localized evidence of a softer urban market, particularly in the highest-priced markets, San Francisco and Manhattan, and a striking divergence in sales prices, but no evidence of a widespread flight to suburban meadows,” said Jeff Tucker. , an economist at Zillow.
“The primary issue in a large part of the country,” Tucker said, “is the drought of inventory, both urban and suburban, that is not meeting the surprisingly robust demand of buyers who are desperately locked in record lows. mortgage rates. “
In the midst of the pandemic-induced recession, the U.S. housing market emerged as one of the few resilient sectors of the economy. An unusually expensive supply of homes around the country both helps fuel demand and keeps sales lower than they might otherwise be. The supply of homes for sale in July was 2.6% down from June and off 21% from a year ago. At the current point of sale, there is a supply of houses at 3.1 months – down from 3.9 months in June and the 4.2 months a year ago.
The result is that homes for sale are disappearing fast. Homes were on the market for an average of 22 days in July, after two days from June. And they are disappearing seven days faster than in the same month last year. The NAR said more than two-thirds of the homes sold in July were less than a month on the market.
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The lack of getting a house for sale is driving down prices. The median price for a home hit the $ 300,000 mark for the first time on record, reaching $ 304,100. That from July 2019 a sharp 8.5%.
“With only 3.1 months of existing supply in the market, even with the recent recovery in the pace of home construction, the lack of inventory will remain a hurdle by limiting some choices of potential buyers and weakening their purchasing power,” he said. Mike Fratantoni, chief economist at the Association of Mortgage Bankers.
Builders have responded to increasing demand from buyers. Construction of new homes increased by 22.6% in July, and housing starts have now risen three straight months after declining in March and April.
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In its report Friday, the NAR said sales exploded in every region of the country in July, led by the Northeast and West, where purchases jumped more than 30%. The Midwest was close behind, with sales up 27.5%. Purchases rose 19.4% in the south.
The rise in home sales, if closed, is creeping up with a report over pending home sales in May, when signed contracts jumped a record 44.3%. That report is a barometer of past purchases over the next two months – in this case the months of June and July for setting records.
In the first months after the pandemic hit – just as the traditional season for buying spring homes was about to begin – sales of both existing and new homes with communities shut down to prevent the coronavirus from spreading. But because areas have lifted restrictions, home sales have been made faster.
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