Fast Fact: The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 1.3 percent to 111.3 in July. The index is now at its second highest reading this year after April (115.0).
Pending home sales expanded in most of the country in July and reached their second highest reading in over a decade. Only the Midwest saw a dip in contract activity last month.
Lawrence Yun, NAR chief economist, says a sizable jump in the West lifted pending home sales higher in July. “Amidst tight inventory conditions that have lingered the entire summer, contract activity last month was able to pick up at least modestly in a majority of areas,” he said. “More home shoppers having success is good news for the housing market heading into the fall, but buyers still have few choices and little time before deciding to make an offer on a home available for sale. There’s little doubt there’d be more sales activity right now if there were more affordable listings on the market.”
Recent residential construction data shows that the size and costs of new homes has moved downward over the past year. According to Yun, this is an early indication that homebuilders are beginning to shift away from building larger, more expensive homes for the upper end of the market to focusing more on properties geared for buyers in the middle and lower price tiers.
“Realtors® in several high-cost areas have been saying for quite a while that there is robust demand for single-family starter homes and townhomes at an affordable price point for young buyers,” adds Yun. “The homeownership rate won’t move up from its over 50-year low 2 without a meaningful boost from first-time buyers, whose participation has yet to noticeably increase so far this year despite mortgage rates near all-time lows 3.”
Existing-home sales this year are forecast to be around 5.38 million, a 2.8 percent increase from 2015 and the highest annual pace since 2006 (6.48 million). After accelerating to 6.8 percent a year ago, national median existing-home price growth is forecast to slightly moderate to around 4 percent.
Fast Fact: Realtors® are reporting diminished buyer traffic because of the scarce number of affordable homes on the market.
Slowed by frustratingly low inventory levels in many parts of the country, existing-home sales lost momentum in July and decreased year-over-year for the first time since November 2015. Only the West region saw a monthly increase in closings in July.
Lawrence Yun, NAR chief economist, says existing sales fell off track in July after steadily climbing the last four months. “Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country last month,” he said. “Realtors® are reporting diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.”
Numbers above are in millions.
Adds Yun, “Furthermore, with new condo construction barely budging and currently making up only a small sliver of multi-family construction, sales suffered last month as condo buyers faced even stiffer supply constraints than those looking to purchase a single-family home.”
The median existing-home price for all housing types in July was $244,100, up 5.3 percent from July 2015 ($231,800). July’s price increase marks the 53rd consecutive month of year-over-year gains.
Fast Fact: Your tax dollars help support VA loans, an important and well-earned benefit for America’s military, including over 630,000 who bought homes this year alone!
Test your knowledge with our VA home loan program quiz!
Finally it looks like recent efforts to raise awareness about a program to help our military personnel buy homes has paid off. Five years ago, fewer than 200,000 reached out for this help from the Department of Veteran’s Affairs.
Today that number has grown by 30% — a vast improvement. Yet so many of our country’s heroes still don’t know, or are hesitant about applying for a VA loan.
What Is This Benefit, Exactly?
It’s a Home Loan Guaranty Program, created as part of the GI Bill after WWII. And while the VA doesn’t actually loan any money, it does guarantee part of the loan, which reduces the risk to lenders, enabling them to offer more favorable loan terms to our beloved military personnel and veterans.
And while there’s a perception that it’s for veterans only (probably because of the name) this important benefit is not limited to them. Folks who have served in the military, even for less than a year, and family members may qualify.
Here are a few more interesting facts about our military heroes and VA loans:
Over half of active-duty military home buyers are between the ages of 18 and 35. Only a third of non-military buyers are able to buy a home at this young age today.
They marry and have children at a younger age than non-military and, accordingly, tend to buy larger homes.
They have less student debt and more job stability, most likely because many enter the military before college.
They default on loans less than non-military. The default rate for VA loans is only about 2.78% vs 3.44% for non-VA loans.
More than 22 million soldiers have benefited from the VA home loan program since its inception. Today, it backs more than 630,000 loans valued at over $153 billion. Seems like a good thing, right?
Test your knowledge with our VA home loan program quiz!
Tell us what you think about the importance of ensuring that America’s Heroes Have Homes, or email your questions to firstname.lastname@example.org.
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Around 40,000 veterans across the United States are homeless. This video explains what efforts are underway to address the problem. Homelessness impacts our economy, our communities and our neighborhoods and we need to be sure we do all that we can to resolve it.
In the 2016 Arizona Legislative session, Arizona REALTORS® opposed a bill that would give tax breaks to for-profit universities and shift the tax burden to Arizona property owners.
Senate Bill 1402 would have reduced the universities’ tax rates from 18.5% to 5% while property owners would continue paying 10%. Plus, property taxes would have been increased to make up the difference! This isn’t fair, so the Arizona REALTORS® fought on behalf of Arizona property owners and helped defeat this bill.
Did you know that VA Loans offer significant benefits beyond conventional or even FHA loans including zero down payment, lower credit scores, higher debt to income ratios, special assistance if there’s a problem repaying the loan, and no requirement for mortgage insurance?
When the Governor’s office reached out to the Hawai’i Association of REALTORS® (HAR) asking them to help the island to address it’s homelessness crisis, the association was quick to respond. “We know this is a very difficult and emotional issue for many people and through the efforts of our local REALTORS®, we hope to begin finding some light at the end of this tunnel,” says Hawai’i Association of REALTORS® (HAR) Government Affairs Director Myoung Oh.
Not long before contacting HAR, Gov. David Ige had issued an emergency proclamation to extend and expand the efforts of Hawai’i social service agencies to reduce homelessness. Gov. Ige initially asked HAR if they had a mailing list of landlords they could share. The governor’s office wanted to launch a mailing campaign that would make landlords aware of the newly expanded financial and social support available to renters who participated in the Housing Choice Voucher Program also known as Section 8.
Though the program helps renters who need financial assistance meeting the rent, many landlords still see accepting a Section 8 tenant as a risk. The hope was that by educating landlords about the full scope of social and economic support available to Section 8 renters, they would be more willing to open their doors to the homeless.
Oh and his fellow REALTORS® liked the idea of educating property owners, but felt that a face-to-face event would have a greater impact on the island’s landlords. HAR and the governor’s office worked together to host the first ever Landlord Summit on November 17, 2015. The pilot program was paid for without taxpayer monies through a grant from the National Association of REALTORS (NAR).
The free summit was held at the Pomaikai Ballrooms where Governor Ige delivered the opening remarks and Mayor Caldwell spoke at the end. Attendees were landlords and REALTOR® property managers who were already accepting Section 8 renters and could share their success stories. Perhaps most importantly, service providers and agencies were present with information about a variety of extended support programs, social services and more information about Section 8 and Veterans Affairs Supportive Housing (VASH) payments.
The half-day summit was an enormous success and surpassed expectations both in attendance and response. The summit went far to alleviate many landlord’s concerns about renting to homeless islanders, including some who may be struggling with addiction and mental health issues. Gov. Ige has asked the other islands to host their own Landlord Summit and to date, the REALTORS® Association of Maui and the Hawaii Island have taken the initiative to host their own island summit.