Even with market frictions related to the mortgage process, home contract activity continues to improve. Home sales are recovering now based solely on fundamental demand and favorable affordability conditions" ~ Lawrence Yun, NAR chief economist
Minneapolis, Minnesota (PRWEB) December 30, 2012
The National Association of Realtors (NAR), "The Voice for Real Estate," represents real estate professionals covering all aspects of the residential real estate industry, and releases the Pending Home Sales Index (PHSI). Their December 19th news release titled November Existing-Home Sales and Prices Maintain Uptrend offers behind the market influencers in the rise in home sales.
Home Destination sums up the report findings and reasons behind the increase in home sales:
1) Fundamental demand from increase in home buyer confidence
2) Rising rents
3) Low inventory supply pressuring home buyers to make decisions
4) Home buyers trying to avoid losing homeowners tax credits expiring in the fiscal cliff
5) Increase in jobs
6) Favorable home affordability conditions from continued low interest rates
7) Household formation bursting out
According to the report, the PHSI peaked at 106.4 in November, a 1.7 percent increase over the October number which was revised down slightly to 104.6 from the 104.8 original reports indicated. The November home sales index was nearly a full 10 percent up, at 9.8 percent above the index of 96.9 in November 2011, after showing a sustained upward trend overall in 2012. After tabulating November's statistics, NAR reports that the housing market has achieved a 19 consecutive monthly year-over-year price gain, which last occurred from September 2005 to May 2006.
Comparing Home Sales Year To Year - November 2012 to November 2011:
HUD and The U.S. Census Bureau released the "New Residential Construction Report" on December 19, 2012 and NAR's report contained the following highlights that effect home prices:
- Privately-owned HOUSING STARTS - were at a seasonally adjusted annual rate of 861,000. This is 21.6 percent (±12.5%) above the November 2011 rate of 708,000.
- Privately-owned HOUSING COMPLETIONS - in November were at a seasonally adjusted annual rate of 677,000. This is 16.1 percent (±9.5%) above the November 2011 rate of 583,000.
- BUILDING PERMITS - in November 2012 were at a seasonally adjusted annual rate of 899,000, up 3.6 percent from the revised October rate and up 26.8 percent from November 2011.
- TOTAL EXISTING HOME SALES - which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 5.9 percent to a seasonally adjusted annual rate of 5.04 million in November. This is 14.5 percent higher than the 4.40 million-unit pace in November 2011.
- The NATIONAL MEDIAN EXISTING HOME SALES PRICE - for all housing types was $180,600 in November, up 10.1 percent from November 2011.
- MIDWEST EXISTING HOME SALES - up 7.2 percent in November to a peak of 1.19 million, coming in at 21.4 percent higher than in November 2011.
- MIDWEST MEDIAN HOME PRICE - was $141,600, which is 7.0 percent above November 2011.
NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., commented on the speculations of a rise in short sales before December 31, 2012 with the pending expiration of the Mortgage Forgiveness Debt Relief Act and Bush tax cuts. "The fact remains it is extremely difficult to expedite a short sale, and banks' response to client urgency is only starting to improve. However, we're hopeful that the act will be extended before it expires on December 31 so sellers don't have to pay taxes on forgiven mortgage debt, which would be unfairly treated as income for owners who are selling properties under duress to willing buyers," he said.
"Even with home sales up, in stark contrast, there's been minute movement in short sales. The short sale market share is staying in a tight range, and taking considerably longer to sell - generally around three months," comments Jenna Thuening, owner of Home Destination.
In a video released yesterday titled "Pending Sales Up, Post 19th Consecutive Year-Over-Year Rise" Robert Freedman from Realtor Magazine and Yun commented on the Dodd Frank rules. As they still need to be implemented, they are an unknown today, creating a "wild card" in 2013 home price estimates. Also, mortgage lending standards are a wild card. If mortgage underwriting becomes less stringent because of abundant bank profits and home price growth, it generate a greater increase in home sales than predicted, according to Yun.
Home Destination has rapidly grown to be an Twin Cities leader in residential home sales. Contact Jenna Thuening, owner of Home Destination, to request an opportunity to meet and gain her guidance through the exciting process of buying or selling your next home. Call 612-396-7832.