3 big positive real estate reports to talk about today. So let’s dive right in!
NAR Existing Home Sales
The first bit of good news for the US housing market came from NAR. They reported that existing home sales hit the highest point in almost six years in August 2013. They said that US existing home sales rose 1.70% in August 2013. In the South, existing-home sales increased 3.8% in August and are 13.5% higher than back in August 2012.
This was the highest number of existing home sales since February of 2007.
NAR also reported that the US median home price increased to $212,100 in August 2013. This is a 14.7% year-over-year increase and is the largest annual increase in the US median home price since way back in October 2005. The median price in the South was 14.6% higher than a year ago.
We might assume this means that the recent increases in mortgage rates have NOT prevented buyers from signing on the dotted line. Maybe it has motivated them? We might also assume this is a sign that the inventory shortage is getting better.
Of course, you know what they say about the word “assume”.
Lawrence Yun, NAR chief economist, said:
Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions. Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase.
We may have dodged a bullet when the Fed delayed tapering quantitative easing since it could have meant mortgage rates would start climbing again.
Case-Shiller Reports Increasing Home Prices
Yet another positive sign for real estate came earlier today when Case-Shiller reported US home prices increased 12.3% and 12.4% as measured by their 10- and 20-City Composites. David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices said that we may be seeing the end of the dramatic increases in home prices.
Remember this is talking about US home prices and does NOT reflect what is happening right here in Upstate South Carolina. But it is pretty close since the average home price in the WUAR MLS for August 2013 is up 11.4% and the median price is up 11.9% compared to August 2012.
I will be posting the August 2013 market reports for our area ASAP so check back.
FHFA Also Reports Increasing Prices
Last but not least is the news from FHFA that US home prices increased 1% from the previous month. This is the 18th consecutive month of increasing home prices according to the FHFA. Home prices for July 2013 are 8.8% higher than back in July 2012. Also the FHFA Home Price Index for July 2013 is about the same as way back in March 2005.
Check out the chart from FHFA:
The Take Away:
Wow it sure is nice to talk about 3 positive reports for real estate. But just like every gray cloud has a silver lining, we have to be realistic about some other factors that might throw a monkey wrench into the housing market.
We are still facing uncertainty about QE and the budget battle in Washington. While the budget battle may turn out to be nothing but the typical political grandstanding to keep the sheeple distracted, it is the looming changes to quantitative easing I am more concerned about.
While we don’t know when the Fed will start to taper QE, we do know it will probably mean a dramatic increase in mortgage rates. Plus there are upcoming changes in mortgage lending that will make it harder for some people to get a mortgage.
My advice for anyone interested in buying a home is to get busy. Call the lender of your choice and stop wasting time. Because time is money and it is possible that wasting time will end up costing you money.