NAR’s Yun: Housing Starts Are ‘Vastly Inadequate’

NAR’s Yun: Housing Starts Are ‘Vastly Inadequate’
National Association of REALTORS®
article by Daily Real Estate News | March 19, 2018

House 1035Fewer new homes were in the pipeline in February, as housing starts for combined multifamily and single-family homes plunged 7 percent month over month, the U.S. Commerce Department reports. Housing production for the month was at a seasonally adjusted annual rate of 1.24 million units.

“The fall in housing starts in February is a movement in the wrong direction,” says Lawrence Yun, chief economist for the National Association of REALTORS®. “The key to economic prosperity at this juncture of economic expansion is to produce more new homes. That will help with job creation and reduce the swift price appreciation in several markets.”

A total of 1.2 million homes were constructed last year, which Yun calls “vastly inadequate.” February’s figure is just barely above year-ago levels, he adds. “It’s not enough,” Yun says. “While relaxing regulations on small-sized community banks may spur more construction loans for building, labor shortages in the industry continue to stunt overall activity.”

Multifamily production plunged 26.1 percent in February to a seasonally adjusted annual rate of 334,000 units, while single-family starts eked out a 2.9 percent gain to 902,000 units. Still, rising buyer demand, along with record-low inventory, has prompted calls from many in the real estate industry for builders to add more new homes.

Randy Noel, chairman of the National Association of Home Builders, says developers are trying to manage rising construction costs to keep home prices competitive. NAHB Chief Economist Robert Dietz says the uptick in single-family production in February follows the organization’s 2018 forecast for gradual, modest strengthening in the new-construction market.

Combined single-family and multifamily home production rose by the highest amount in the Midwest last month, up 7.6 percent month over month. However, housing starts dropped 12.9 percent in the West, 7.3 percent in the South, and 3.5 percent in the Northeast.

Source: National Association of REALTORS® and National Association of Home Builders; REALTOR® Magazine Online, Daily Real Estate News 031918

94% of Young Renters Want to Buy

94% of Young Renters Want to Buy
Article by Daily Real Estate News | December 17, 2015

REALTORlogoNearly all renters 34 years of age or younger questioned in a new survey from the National Association of REALTORS® say they want to own a home in the future. The survey, Housing Opportunities and Market Experience (HOME), tracks topical real estate trends, and asks consumers whether or not it’s a good time to buy or sell a home and about their expectations and experiences in the mortgage market.

“Despite entering the workforce during or immediately after the worst of the financial and housing crisis, the desire to become a homeowner appears to be a personal goal for a convincing majority of young renters,” says NAR Chief Economist Lawrence Yun, adding that market conditions are creating a “sizeable, pent-up demand for buying.”

Meet the New HOME Survey
From March 2015 until earlier this month, survey research firm TechnoMetrica Market Intelligence contacted U.S. households via random-digit dial (one-third via cell phones and two-thirds via land lines). Approximately 900 qualified households responded to the survey each month, adding up to a total of 9,034 household responses being represented in this iteration of the report. The association may add new questions to the survey as the need arises to gather data about timely topics impacting real estate. The next quarterly report of HOME Survey data is scheduled to be released by NAR on Tuesday, March 15, 2016.

Looking at renters overall, 83 percent say they want to own, and 77 percent believe homeownership is part of their American Dream.

The monthly survey, the results of which NAR will release quarterly, also fuels an index tracking the financial outlook of households. The Personal Financial Outlook Index has slowly trended upward since the tracking began in March, and in December reached its highest reading. While responses have been steadily becoming more positive overall within the index, the most optimistic segments were younger households, renters, and those in urban areas.

“Young adults, who make up the majority of all renter households, are typically more optimistic about their future,” says Yun. But, despite a sunnier view of their own prospects, only half of all respondents (both renters and owners) believe the economy is currently improving, and 44 percent think the economy is actually in a recession. Renters were slightly more optimistic about current economic conditions, with 57 percent believing the economy is improving. Yun says this “can be attributed to the fact that some areas have been slow to recover and wages have yet to grow in a meaningful way for far too many families.”

Thankfully, confidence in the economy is not a prerequisite for an interest in home ownership; 76 percent of renters who don’t think the economy is improving still want to eventually buy a home. Among all surveyed age groups, 84 percent believe owning a home is a good financial decision. A majority of both homeowners (82 percent) and renters (68 percent) say they believe that it’s a good time to buy a home, and 61 percent of current owners believe it is a good time to sell.

So what’s keeping some out of the market? The top two reasons given by renters for not currently owning was the inability to afford it (53 percent) and needing the flexibility of renting (19 percent). When asked what would likely be the main reason for buying in the future, 33 percent of renters cited getting married, starting a family, or retiring as a trigger. Another 26 percent said an improvement in their financial situation would make the difference.

Also, consumers are not nearly as bullish about the mortgage market as they are about housing. Around two-thirds of respondents predict it would be very or somewhat difficult to obtain a mortgage at this time, and 5 percent of renters surveyed had recently tried and failed to obtain financing for a home.

Source: “NAR HOME Survey: Desire to Buy Strong despite Affordability, Economic Concerns,” Realtor.org (Dec. 17, 2015); REALTOR® Magazine Online, Daily Real Estate News 121715

Kenneth Bargers, REALTOR® | Pilkerton Realtors
(615) 512-9836 cellular (615) 371-2474 office kb@bargers-solutions.com email
www.bargers-solutions.com web kennethbargers.com blog
2 Cadillac Drive, Brentwood Tennessee address

Need a home? visit Search for Properties
Do you need marketing assistance for special projects or contract assignments? visit the Marketing page of Bargers Solutions

Housing Has ‘Best Quarter in Nearly a Decade’

Housing Has ‘Best Quarter in Nearly a Decade’
Article by Daily Real Estate News | November 13, 2015

REALTORlogoHome prices are showing signs of slowing to a healthier pace, according to the National Association of REALTORS®’ latest quarterly housing report.

In fact, Lawrence Yun, NAR’s chief economist, says there’s no question the housing market in the third quarter had its best quarter in nearly a decade.

Oct2015-salesimage“The demand for buying picked up speed in many metro areas during the summer as more households entered the market, encouraged by favorable mortgage rates and improving local economies,” Yun says. “While price growth still teetered near or above unhealthy levels in some markets, the good news is that there was some moderation despite the stronger pace of sales.”

Nationwide, the existing single-family home price in the third quarter was $229,000, up 5.5 percent from the third quarter of 2014.

Meanwhile, existing-home sales, including single-family and condo sales, rose 3.4 percent to a seasonally adjusted annual rate of 5.48 million in the third quarter. Existing-home sales are 8.3 percent higher than a year ago, shows NAR’s report.

Sales had the potential to move higher last quarter given the drop in mortgage rates and favorable economic conditions, Yun says.

“Unfortunately, the lack of any meaningful gains in housing supply pushed prices in some areas above what some potential buyers, especially first-time buyers, are able to afford,” says Yun.

The median existing single-family home price rose in 87 percent of tracked markets, with 154 out of 178 metro areas showing gains, according to closings in the third quarter compared to a year ago. Only 24 areas, or 13 percent, of tracked areas recorded lower median prices from a year earlier.

“Many of the metro areas with the fastest price appreciation over the past year were in the South – particularly in Florida,” says Yun. “A combination of solid job gains, above average shares of vacation and foreign buyers and little new construction being added was behind these areas’ faster price growth.”

With inventory levels nationwide, 2.21 million existing homes were available were sale by the end of the third quarter, under the 2.28 million homes for sale at the end of the third quarter one year ago, NAR’s report shows. The average supply in the third quarter was 4.9 months, down from 5.5 months a year ago.

The pool of potential buyers still outweighs what’s available for sale in many markets this fall, says NAR’s 2015 President Chris Polychron.

“REALTORS® are still reporting that many homes are going under contract more quickly than what’s typical this time of year,” Polychron says. “While this is certainly beneficial to home owners looking to sell, some are still reluctant to list out of concerns they’ll have limited time and choices during their own home search.”

Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 111315

Kenneth Bargers, REALTOR® | Pilkerton Realtors
(615) 512-9836 cellular (615) 371-2474 office kb@bargers-solutions.com email
www.bargers-solutions.com web kennethbargers.com blog
2 Cadillac Drive, Brentwood Tennessee address

Need a home? visit Search for Properties
Do you need marketing assistance for special projects or contract assignments? visit the Marketing page of Bargers Solutions

Yun: ‘Prices Are Rising Just Too Fast’

Yun: ‘Prices Are Rising Just Too Fast’
Article by Daily Real Estate News | August 11, 2015

Treed-Home-LotThe tight supply of available homes is prompting more house hunters to bid up home prices, housing analysts say.

“Prices are rising just too fast,” says Lawrence Yun, chief economist with the National Association of REALTORS®. “And certainly far ahead of people’s income.”

NAR recently reported that the limited number of homes for sale was pushing the national median sales price above its 2006 peak. In its latest existing-home sales report, NAR noted that the median home price for all housing types reached $236,400 in June – 6.5 percent above year ago levels and surpassing the peak median sales price set in July 2006 at $230,400.

Housing’s inventory problem is occurring across housing types. Condos made up just 5.5 percent of all multifamily building in the first quarter of this year, the lowest on record for the Commerce Department, which has been tracking such information for more than four decades. Single-family construction is also about half of what it should be, according to Bob Denk, senior economist at the National Association of Home Builders.

As for what’s hindering the new-home supply, Denk points to a skilled labor shortage in the building industry as well as a shortage in the number of lots to build on.

“We are having these supply chain headwinds,” Denk says. “It’s hard to just double overnight. But the other part of that is we have produced at this level before, so it’s not impossible.”

Source: “A Lack of Supply Drives Up Housing Prices,” MarketPlace (Aug. 10, 2015); REALTOR® Magazine Online, Daily Real Estate News 081115

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Contracts to Buy Homes Reaches 9-Year High

Contracts to Buy Homes Reaches 9-Year High
Article by Daily Real Estate News | June 30, 2015

2932 Polo Club 1Pending home sales continued to make gains last month, rising to the highest level since April 2006, according to the National Association of REALTORS®’ Pending Home Sales Index, a forward-looking indicator based on contract signings.

Large gains in pending home sales in the Northeast and West helped to offset small decreases in the Midwest and South.

NAR’s Pending Home Sales Index rose 0.9 percent in May to 112.6 in May. The index is at its highest level since April 2006 when it was 113.7.

“The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring,” says Lawrence Yun, NAR’s chief economist. “It’s very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive.”

Yun says this year’s strong sales are causing home prices to rise to an “unhealthy and unsustainable pace.”

“Housing affordability remains a pressing issue with home-price growth increasing around four times the pace of wages,” says Yun. “Without meaningful gains in new and existing supply, there’s no question the goalpost will move further away for many renters wanting to become home owners.”

Here’s a closer look at how the Pending Home Sales Index performed regionally in May:

  • Northeast: rose 6.3 percent to 93.9 last month and is 10.6 percent above a year ago.
  • Midwest: fell 0.6 percent to 111.4 but remains 7.8 percent above year ago levels.
  • South: dropped 0.8 percent to 127.8 but are still 10.6 percent above last May.
  • West: rose 2.2 percent to 104.5 in May and are 13 percent above a year ago.

Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 063015

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Pending Home Sales Rise in October

Pending Home Sales Rise in October
Article by: Daily Real Estate News (November 29, 2012)

Pending home sales rose strongly in October with mixed regional results, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 5.2 percent to 104.8 in October from an upwardly revised 99.6 in September and is 13.2 percent above October 2011 when it was 92.6. The data reflect contracts but not closings.

Lawrence Yun, NAR chief economist, said buyers are responding to favorable market conditions. “We’ve had very good housing affordability conditions for quite some time, but we’re seeing more impact now from steady job creation, and rising consumer confidence about home buying now that home prices have clearly turned positive,” he explained.

Pending home sales are at the highest level since March 2007 when the index also reached 104.8. On a year-over-year basis, pending home sales have risen for 18 consecutive months.

Yun noted there are clear regional patterns. “Contract activity surged in the Midwest and is showing very healthy gains in the South, but was down slightly in both the Northeast and West,” he said.

“The Northeast saw some impact from Hurricane Sandy, but limited inventory in the West is keeping a lid on the market. All regions are up from a year ago, with double-digit gains in every region but the West,” Yun said.

The PHSI in the Northeast slipped 0.1 percent to 79.2 in October but is 13.3 percent above a year ago. In the Midwest, the index jumped 15.6 percent to 104.4 in October and is 20 percent above October 2011. Pending home sales in the South rose 5.5 percent to an index of 117.3 in October and are 17.4 percent higher than a year ago. In the West the index declined 1.1 percent in October to 105.7, but is 0.9 percent above October 2011.

Source: Daily Real Estate News, Pending Homes Sales Rise in October (November 29, 2012); National Association of REALTORS® | Blog distribution provided by Kenneth Bargers and Bargers Solutions, member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee

Good to Know: 4.82m; the total number of home sales expected this year…

Good TO KNOW: 4.82M; THE TOTAL NUMBER OF HOME SALES EXPECTED THIS YEAR……

Article by: Lawrence Yun; Chief Economist and Senior Vice President of Research at the NATIONAL ASSOCIATION OF REALTORS®
November/December 2012 Market Pulse

Sales and prices are up and the length of time it takes to complete sales is down, but NAR’s data for August suggests real estate isn’t out of the woods.

The national median home price, at $187,400, is up 9.5 percent from year-ago levels, and the market is on pace to see 4.82 million home sales this year, a 9.3 percent improvement over last year. Almost two-thirds of sales are completed within three months, a big jump from a year earlier. But practitioner confidence, a good indicator of how the market will look down the road, has barely budged for months. All trend lines are from August 2011 to August 2012.

Existing-home sales is a seasonally adjusted annual rate, which is the actual rate of sales for the month, multiplied by 12 and adjusted for seasonal sales differences. Pending home sales is an index that measures ­housing contract activity. An index of 100 is equal to the level of activity during 2001, the benchmark year. Inventory measures the number of existing homes on the market at the end of the month. Buyer and seller traffic, current conditions, six-month expectations, and time on market derive from a monthly REALTOR® Confidence Index. Results are based on 3,421 responses to 6,000 surveys sent to large and small real estate offices. The survey asks practitioners to indicate whether conditions are strong (100 points), moderate (50), or weak (0). Some data may be revised from previous issues.

Source: NAR, November/December 2012 Market Pulse, Lawrence Yun article | Blog distribution provided by Kenneth Bargers and Bargers Solutions, member of Pilkerton Realtors, residential real estate services located in Nashville, Tennessee