House and Home July 2016
More Sales, More Competition in the National Housing Market
Photo: Jay Spooner - iStockphoto

Existing-home sales increased for the second month in a row. According to the National Association of Realtors (NAR), existing-home sales climbed in April by 1.7 percent to a seasonally adjusted annual rate of 5.45 million; this is 6 percent higher than a year ago. While sales dipped slightly in the South and West, an impressive increase in the Midwest coupled with a more modest increase in the Northeast more than offset the losses.
Affordability Factors
Continuing housing shortages and climbing home prices are hampering sales. According to Lawrence Yun, chief economist of NAR, affordable mortgage rates have helped offset rising home prices, making home ownership a viable option for more buyers, "but there's growing concern a number of buyers will be unable to find homes at affordable prices if wages don't rise and price growth doesn't slow." Yun predicts there will be more competition for entry-level and mid-priced homes in the coming months, due to high demand and low supply.
More Competition
This competition for entry-level homes will come from first-time buyers. This group accounted for 32 percent of the market in April, which is 2 percent higher than both a month and a year ago. For all of 2015, the share of first-time buyers in the market for a home averaged 30 percent. Investors who target distressed homes will also be facing increased competition, as the number of distressed sales fell for the second consecutive month. Distressed sales accounted for 7 percent of all sales activity in April, down from 8 percent a month ago and 10 percent a year ago. Foreclosures accounted for 5 percent of April sales, while 2 percent were short sales.
Sale Time
On average, it took a home 39 days to sell in April, down from 47 days in March but unchanged from a year ago. Properties haven't stayed on the market for so short a duration since June 2015, when it took an average 34 days for a property to sell.

Regional Home Sales

  • Northeast: Existing-home sales' annual rate: 740,000, an increase of 2.8 percent. Sales are 17.5 percent higher than April 2015.

  • Midwest: Existing-home sales' annual rate: 1.39 million, an increase of 12.1 percent. Sales are also 12.1 percent higher than April 2015.

  • South: Existing-home sales' annual rate: 2.19 million, a decrease of 2.7 percent. Sales are still 4.3 percent higher than April 2015.

  • West: Existing-home sales' annual rate: 1.13 million, a decrease of 1.7 percent. Sales are 3.4 percent lower than April 2015.

William Brundage  -  (248) 980-2455 House and Home  -  July 2016 

William Brundage, Coldwell Banker Weir Manuel, 294 E Brown St , Birmingham MI 48009
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