Home prices maintained their robust, upward trajectory in a vast majority of metro areas during the second quarter, causing affordability to slightly decline despite mortgage rates hovering at lows not seen in over three years, according to the latest quarterly report by the National Association of Realtors®. The report also revealed that for the first time ever, a metro area – San Jose, California – had a median single-family home price above $1 million.
Lawrence Yun, National Association of Realtors chief economist, says a faster pace of home sales pushed home prices higher in most metro areas during the second quarter. “Steadily improving local job markets and mortgage rates teetering close to all-time lows brought buyers out in force in many large and middle-tier cities.”
The national median existing single-family home price in the second quarter was $240,700, up 4.9 percent from the second quarter of 2015 ($229,400).
At the end of the second quarter, there were 2.12 million existing homes available for sale 3 , which was below the 2.25 million homes for sale at the end of the second quarter in 2015. The average supply during the second quarter was 4.7 months – down from 5.1 months a year ago.
Boosted by a greater share of sales to first-time buyers not seen in nearly four years, existing-home sales maintained their upward trajectory in June and increased for the fourth consecutive month, according to the National Association of Realtors®.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, climbed 1.1 percent to a seasonally adjusted annual rate of 5.57 million in June from a downwardly revised 5.51 million in May.
After last month’s gain, sales are now up 3.0 percent from June 2015 (5.41 million) and remain at their highest annual pace since February 2007 (5.79 million).
Lawrence Yun, NAR chief economist, says the impressive four month streak of sales gains through June caps off a solid first half of 2016 for the housing market. “Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home…” he said. “Sustained job growth as well as this year’s descent in mortgage rates is undoubtedly driving the appetite for home purchases.” Cautions Yun, “Looking ahead, it’s unclear if his current sales pace can further accelerate as record high stock prices, near-record low mortgage rates and solid job gains face off against a dearth of homes available for sale and lofty home prices that keep advancing.”
The median existing-home price 2 for all housing types in June was $247,700, up 4.8 percent from June 2015 ($236,300). June’s price increase marks the 52 and consecutive month of year-over- year gains and surpasses May’s peak median sales price of $238,900.
For the second consecutive week, fixed mortgage rates inched up, but still remain near historical lows, Freddie Mac reports in its weekly mortgage market survey.
“The 10-year Treasury yield remained flat this week in anticipation of the Fed’s July policy meeting,” says Sean Becketti, Freddie Mac’s chief economist. Mortgage rates, on the other hand, rose another 3 basis points to 3.48 percent. Nonetheless, home sales continue to benefit from the persistently low mortgage rates with June’s new home sales coming in at an annualized rate of 592,000 homes — its fastest pace since 2008.”
Freddie Mac reports the following national averages for mortgage rates for the week ending July 28:
· 30-year fixed-rate mortgages: averaged 3.48 percent, with an average 0.5 point, rising from last week’s 3.45 percent average. Last year at this time, 30-year rates averaged 3.98 percent.
· 15-year fixed-rate mortgages: averaged 2.78 percent, with an average 0.5 point, increasing from last week’s 2.75 percent average. Last year at this time, 15-year ARMs averaged 3.17 percent.
· 5-year hybrid adjustable-rate mortgages: averaged 2.78 percent, with an average 0.5 point, holding steady from last week. A year ago, 5-year ARMs averaged 2.95 percent.
Lending a hand to help combat neuromuscular disease, Marc Corriveau of ERA Dawson Bradford Co. REALTORS will be “locked up” on Tuesday, August 2 nd at 10 a.m. to raise funds for the Muscular Dystrophy Association (MDA).
Out of every dollar donated to MDA Maine, 77¢ stays here in the state while the rest goes to the research & services of MDA nationally.
The Lock Up is one of hundreds of events organized by MDA. Since 1977, ERA brokers and sales associates have collectively raised more than $30 million to fund research and provide services to help the more than one million Americans affected by neuromuscular diseases.
This year, Marc Corriveau will be locked up and seek to be released by raising funds to benefit MDA. Your donation can help send a child to summer camp for $2,000; provide useful medical equipment for $500; fund a minute of research for $75; or supply a flu shot for $30.
If you would like to help “release” Marc, please contribute to his fundraising goal of $2,500 by visiting the following site: http://www2.mda.org/goto/FreeMarcCorriveau.
Thank you for your help!
The U.S. Senate passed H.R. 3700, the “Housing Opportunity Through Modernization Act,” by unanimous consent. This legislation includes reforms to current Federal Housing Administration restrictions on condominium financing, among other provisions, and is long supported by the National Association of Realtors®.
Changes include efforts to make FHA’s recertification process “substantially less burdensome,” while lowering FHA’s current owner-occupancy requirement from 50 percent to 35 percent.
Tom Salomone, president of NAR, praised the legislation as a significant step towards eliminating barriers to safe, affordable mortgage credit for condos. He said, “Condominiums often represent an affordable option that’s just right for first-time and low-to-moderate income homebuyers. Unfortunately, overly-burdensome restrictions on condo financing have for too long put that option out of reach for many creditworthy borrowers.
“This legislation meets those restrictions head on, putting the dream of homeownership back in reach for more Americans.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries
The Federal Aviation Administration (FAA) has issued its “Small Unmanned Aircraft Rule” or commonly known as “drones”. Realtors have had a strong interest in using this technology in connection with their real estate businesses in the form of access to the potential for enhanced aerial photography. A small unmanned aircraft system (UAS) is a remotely controlled aircraft, weighing less than 55 pounds, designed to hover and maneuver over property.
The final rule encompasses much of what was contained in the proposed rule, and the National Association of Realtors is pleased with the overall outcome. The rule will lead to more predictability in the market for drone-based services and will create a broader base of trained operators and service providers. Specifically, the new rule:
1. Educational Provision: New certification for ‘remote pilot in command’ authority which is less burdensome than a pilot’s license. The FAA will require testing of drone operators which will be preparation for the test, administered at the FAA testing centers. Preparation for the test will take about 20 hours of study time. Operators will still need to pass a background check performed by the Transportation Safety Administration (TSA).
2. Flight Operations Permitted: Flights may be conducted during daylight hours, within visual line of sight, not directly over non-participants, at an altitude limit of 400’, and a 100 MPH max speed.
3. Many of the operational requirements can be waived, which leaves room for innovation and experimentation with the technology.
4. No provisions for notice to bystanders. This could present problems for operations in more dense areas, but REALTORS® can work with UAS service provider to find solutions.
The new Rule will go into effect in August 2016.
Existing-home sales sprang ahead in May to their highest pace in almost a decade, while the uptick in demand this spring amidst lagging supply levels pushed the median sales price to an all-time high, according to the National Association of Realtors®.
Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 1.8 percent to a seasonally adjusted annual rate of 5.53 million in May. With last months gain, sales are now up 4.5 percent from May 2015 (5.29 million) and are at their highest annual pace since February 2007.
Lawrance Yun, NAR chief economist, says existing sales continue to hum along, rising in May for the third consecutive month. “This spring’s sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they’ve accumulated in recent years and finally deciding to trade-up or downsize.”
Recent declines in interest rates due to Great Brittan’s exit from the European Union will have will create an additional unanticipated surge in sales.