Looking at recent reports on home sales and house prices and what it means for you…
Good news for real estate and the economy is that the National Association of REALTORS®recently reported that sales of existing homes for the entire US in June came in at 5.08 million. This is the second highest since November of 2009. Maybe this will help to counter some of the claims that the recovery in housing is weakening?
I am sure you know that the summer is the peak time for home sales. Instead of comparing these numbers to the winter months, I suggest we look at the same time period on year ago to get a better idea of what is happening.
The June 2013 inventory of existing homes improved by 1.90%, which is a 5.2 month supply. The number of available homes in June 2013 was 7.6% lower than in June 2012. We continue to hear stories about a lack of inventory so this increase may prove to be a good thing.
Average Home Prices Continue to Climb
NAR chief economist Lawrence Yun said that existing home inventory is expected to “broadly favor sellers and contribute to above-normal price growth.” Just basic supply and demand but let’s hope that we do not experience any bubbles due to buyers paying more than they should.
The June 2013 US average home price was $214,200, which is up 13.5% year-over-year. This is cause for concern since rising home prices and mortgage rates could cause problems for some home buyers.
Or maybe these buyers will just have to bite the bullet and lower their price range?
Distressed Home Sales
When you hear the term “Distressed Sales” it is referring to foreclosures and short sales. We got some good news since distressed home sales were down from slightly from the May 2013 level. This is the lowest percentage of distressed home sales since 2008. June 2013 sales of distressed homes were also lower than in June 2012 so maybe we are starting to see the end of high levels of foreclosure.
There will always be foreclosures but the extremely high levels we have suffered through in recent years really hurt sellers. And NAR is saying that falling levels of distressed sales are causing existing home prices to increase .
FHFA on Home Prices
More good news is that earlier this week FHFA reported that home prices for homes increased by 0.70% in May 2013 compared to the April 2013 level. Check out the chart below from FHFA:
Also the FHFA said that home prices were up by 7.3% year-over-year in May 2013. This gets us back to what home prices were back in January 2005 according to the FHFA. However we are still 11.2% below the peak in home prices back in April 2007.
This info from FHFA shows us that home prices for the entire US are steadily growing. Exactly what is happening in a specific area or for your home means looking at local data. Still this is great news!