Looking at the latest data on new home sales and prices, Realtor confidence, how long it takes to save a down payment, 2 economic reports and more!
US New Home Sales Decrease
From the Census Bureau and HUD:
New Home Sales
Sales of new single‐family houses in September 2018 were 5.5% below the revised August rate and 13.2% below the September 2017 estimate.
You can see that new home sales are higher than they were after the housing bust but are much lower than they were before the bust.
This is the lowest level of new home sales in almost 2 years! Also, new home sales have decreased for 4 consecutive months which means this is a trend and NOT a blip…
The median sales price of new houses sold in September 2018 was $320,000. The average sales price was $377,200.
New home prices have steadily climbed since the housing crash…
For Sale Inventory and Months’ Supply
The seasonally‐adjusted estimate of new houses for sale at the end of September was 327,000. This represents a supply of 7.1 months at the current sales rate.
A balanced market will have 6 months of inventory. Less than 6 months is considered a sellers market and over 6 months is buyers market.
7.1 months of supply is the highest level since 2011 BUT this does not take into account the price range of the available homes. Lots of high end homes does not mean much since the demand is stronger for lower priced entry level homes…
A combination of higher mortgage rates, low inventory and home prices increasing faster than incomes is the culprit for weak new home sales in my opinion. It is possible to find affordable new homes in the Anderson area BUT some potential buyers are finding themselves priced out due to rising rates and prices.
REALTOR Confidence September 2018
Highlights from NAR’s September 2018 REALTOR Confidence Index:
- Buyer traffic down compared to September 2017
- Seller traffic down compared to September 2017
- Properties typically on the market for 32 days
- Home price up or same compared to one year ago
- First time buyers accounted for 32% of sales
- 21% of sales were for all cash
- Distressed sale ( foreclosures or short sales ) made up only 3% of sales
- 74 of contracts settled on time in September 2018
- The major issues reported were “low inventory” and “interest rates”
This is a survey of REALTORS from all over the country so it may not reflect what is happening in every local real estate market. That being said, the decrease in activity from buyers and sellers is not a good sign…
Saving a Down Payment Takes Longer
Home values have grown almost twice as much as incomes have over the past 20 years. Buyers these days need 7.2 years to save a 20 percent down payment on the median valued home.
It hasn’t taken this long to save for a down payment since early 2008, shortly after home values hit their highest point during the mid-2000s housing bubble. Home values have seen strong, steady growth since the housing crisis, and nationally the typical home is worth more than ever.
Twenty years ago, it took 5.5 years to save for a 20 percent down payment. Since then, home values have grown nearly twice as much as incomes have, increasing by 98.6 percent, while incomes have risen 52.6 percent.
Let me remind you that not all buyers must put down 20% to buy a home. This article has some interesting stuff BUT it could lead to some misconceptions about what it takes to buy a home in the Anderson area!
If you want to buy a home, then sitting down with several mortgage lenders to discuss your options is highly recommended. You may be pleasantly surprised to find that it is possible to buy a home with a much smaller down payment.
Fifth District Service Sector Activity Softened
From the Richmond Fed:
Fifth District service sector activity softened in October, according to the results of the latest survey by the Federal Reserve Bank of Richmond. Measures of demand and local business conditions also fell but remained in expansionary territory. However, firms were optimistic, expecting to see growth in the coming months.
Service sector firms reported softening employment growth but strengthening wage growth. Difficulty finding workers with necessary skills persisted in October…
Firms reported faster growth of both prices paid and received in October. Growth in prices received reached its highest value since November 2000 but continued to trail growth of prices paid. Firms believe the gap between growth of prices paid and received will narrow in the next six months.
Remember that South Carolina is in the Fifth District so this is an important indicator of the economy in our region.
Fifth District Manufacturing Activity Expanded
From the Richmond Fed:
Fifth District manufacturing activity expanded moderately in October…
The composite index fell from 29 in September to 15 in October, as indexes for shipments and new orders dropped, while the third component, employment, rose. However, survey respondents were optimistic, expecting to see positive growth across most measures in the coming months.
While the employment index rose in October, the indexes for wages and workweek dropped but remained positive, indicating continued but weaker growth. Firms were unable to find workers with skills they needed…
Both prices paid and prices received grew at an accelerated rate in October. Growth of prices paid continued to outpace growth of prices received and hit its highest rate since May 2011. Firms expect price growth to continue in the near future.
A better report than the Service Sector report BUT we again heard that employers are having a hard time finding qualified workers. This is a real opportunity for America to improve our future…
US Home Prices Increase 7.1%
Clear Capital just reported that US home prices grew 0.9% quarter-over-quarter (QoQ), and increased 7.1% year-over-year for October. Clear Capital uses a rolling quarter index that is better than indexes that may have a several month lag time.
That being said, this is a national report and does not reflect what is happening in every local housing market. For those interested in more local data, you can read the Anderson County SC Real Estate Market Reports
Well that is all I have time for today! Be sure to subscribe so you are notified by email when there are new posts and as always, if you have any questions about buying or selling real estate in Anderson County SC, Contact Me!