Discussing new home sales and new home prices, the level of home ownership and economic recovery, the best state for home owners and more
New Home Sales May 2018
New Home Sales
Sales of new single-family houses in May 2018 were 6.7% above the revised April 2018 rate and 14.1% above the May 2017 estimate. This is the highest level of home sales this year and the 2nd highest sales since the Great Recession.
New Home Sales Price
The median sales price of new houses sold in May 2018 was $313,000. The average sales price was $368,500. Remember that they are talking about the entire country…
There are many NICE new homes in the Anderson area that roughly half of these prices!
Inventory and Months’ Supply of New Homes
The seasonally adjusted estimate of new houses for sale at the end of May was 299,000. This represents a supply of 5.2 months at the current sales rate.
6 months is considered a balanced market. Below 6 months is a seller’s market and above 6 months is a buyer’s market.
Again, they are talking nationally. Because of household formation and population growth, we need many more homes built! The lack of homes for sale combined with higher prices and mortgage rates is hampering the housing market.
Does High Level of Home Ownership Hamper Economic Recoveries?
Evidence suggests that countries with relatively high homeownership rates may be more susceptible to severe growth slowdowns and reversals in homeownership.
While all major advanced economies were negatively affected by the 2007-09 financial crisis, their experiences varied greatly. That said, new research reveals a common thread: A country’s homeownership rate in 2005 turned out to be a powerful negative predictor of both its post-crisis growth trajectory and subsequent change in national homeownership rate.
It makes sense for these outcomes to be related, since problems in housing and mortgage markets were at the center of the financial crisis and Great Recession. Does this prior global experience now suggest caution when advocating high homeownership rates? Could such rates increase various countries’ susceptibility to sharp economic downturns?
Correlation is not causation BUT this is very interesting stuff.
We want a sustainable level of home ownership instead of artificially inflating it with government policies and too easy lending. Which is something I have said many times since the economy/housing market crashed.
I am a firm believer in the benefits of home ownership for both the owner and society. But not if it means we are setting ourselves up for pain later on.
Which States Are Best for Home Owners?
Homeownership is a hallmark of American society. Data from the Federal Reserve Bank of St. Louis shows that 64.2% of homes in America are owner-occupied, and a Pew Research survey from 2016 found that 72% of renters would like to own a home at some time in the future. But the benefits to home ownership are different based on which state you live. Some states have seen fast-growing home values while others offer affordable mortgages, thanks to low property tax rates.
In order to find the best states for homeowners, we looked at nine metrics. Specifically we looked at average price per square foot, the one-year percent change in value per square foot, foreclosures per 10,000 homes, average effective property tax rate, median annual property taxes, average closing costs, average homeowners insurance and the burglary rate.
So where does South Carolina come in? Well NOT in the top 25 but exactly where is unknown since they only shared the top 25.
Strange that a website/company that calls itself smart would only include half the states…
Supreme Court Rejects Nomura and RBS Appeal in MBS Case
The U.S. Supreme Court declined on Monday to hear an appeal brought by Nomura Holdings Inc and the Royal Bank of Scotland Group PLC seeking to overturn an order requiring them to pay $839 million for making false statements while selling mortgage-backed securities to Fannie Mae and Freddie Mac.
The award stemmed from a lawsuit brought against Nomura and RBS by the Federal Housing Finance Agency in 2011. The FHFA has acted as conservator of mortgage agencies Fannie Mae and Freddie Mac since their 2008 takeover by the federal government after the collapse of the U.S. housing market.
Not really surprising that they are trying to get out of paying for their part in wrecking the economy and housing market…
Well that is all I have time for today!