Welcome or Register

Real Estate News

Latest Realty News from NAR

March 2018 Housing Affordability Index

At the national level, housing affordability is down from last month and down from a year ago. Mortgage rates rose to 4.42 percent this March, up 8.2 percent compared to 4.28 percent a year ago.

  • Housing affordability declined from a year ago in March moving the index down 7.0 percent from 150.4 to 161.7. The median sales price for a single family home sold in March in the US was $252,111 up 5.9 percent from a year ago.
  • Nationally, mortgage rates were up 35 basis point from one year ago (one percentage point equals 100 basis points), while median family incomes rose 2.7 percent.

  • Regionally, the West recorded the biggest increase in price at 8.5 percent. The South had an increase of 6.0 percent while the Midwest had a gain of 5.1 percent. The Northeast had the smallest incline in price of 3.5 percent.
  • Regionally, all four regions saw a decline in affordability from a year ago. The West had the biggest drop in affordability of 9.2 percent. The South had a decline of 7.3 percent followed by the Midwest with a drop of 5.7 percent. The Northeast had the smallest drop of 2.7 percent.
  • On a monthly basis, affordability is down from last month in all four regions. The West had a decline of 4.7 percent followed by the Northeast with a dip of 5.6 percent. The South had a drop of 5.9 percent followed by the Midwest, which had the biggest; dip in affordability of 8.6 percent.
  • Despite month-to-month changes, the most affordable region was the Midwest, with an index value of 194.7. The least affordable region remained the West where the index was 105.6. For comparison, the index was 151.8 in the South, and 163.5 in the Northeast.

  • Mortgage applications are currently down 2.5 percent. Mortgage credit availability in April was flat. Rates are rising which will increase-housing costs. Home prices are up 5.9 percent while median family incomes are only growing 2.7 percent. Inventory gains will help ease the pressure on home prices.
  • What does housing affordability look like in your market? View the full data release here.
  • The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation here.

More Properties Were Sold at or Above the List Price in March 2018

In a monthly survey of REALTORS®, the survey asks, “Compared to the original listing price, at how much of a net discount or net premium did the property sell?”

According to a survey of REALTORS® who responded to the March 2018 REALTORS® Confidence Index Survey, 37 percent of properties that closed in February 2018 sold at or above the list price. One year ago, 35 percent sold at or above the list price, and during the months of January in 2012 through 2015, about one in four sold at or above the list price. Buyer demand continues to outpace supply of homes being listed for sale in the market, sustaining the upward pressure on home prices.

According to respondents who reported closing a sale, 17 percent of properties sold at a net premium in March 2018, an increase from the nine percent share in 2014 and 2015. Of properties that sold at a premium, 87 percent sold at 101 to 110 percent of the list price, seven percent were sold at a premium of 11 to 20 percent, and five percent were sold at more than 20 percent premium.

The price distribution continues to skew to the right. In 2012, 34 percent of properties were typically listed at $150,000 in 2012, but as of March 2018, only 22 percent of properties listed were typically at this price level.[1]

Use the data visualization below to view the median listing price of properties listed on Realtor.com in March 2018. Red areas are areas where the listing price is higher than the U.S. median sales price of all existing homes sold in March 2018, at $250,400. Hover on the map to see the distribution of listing prices from June 2012 through March 2018 on Realtor.com data.

 

Dashboard 4

 


 

[1] To access Realtor.com data, go to https://www.realtor.com/research/data/.

 

 

REALTORS® Expect Home Prices to Increase by Four Percent in the Next 12 Months

In a monthly survey of REALTORS®, respondents are asked “In the neighborhood(s) or area(s) where you make the most sales, what are your expectations for residential property prices over the next year?

Among the respondents, the median expected price change is four percent. The chart below shows median expected price change by state based on survey responses collected during January–March 2018[1], according to the  March 2018 REALTORS® Confidence Index Survey

Respondents from the states of Washington, Oregon, Idaho, Nevada, Utah, Wyoming, Colorado, Rhode Island, and the District of Columbia expect the highest price growth in the next 12 months, with the expected median price growth at more than five to nearly eight percent. Respondents from California, Arizona, Wisconsin, Michigan, Tennessee, South Carolina, Florida, and New Hampshire also expect strong price growth, with the median expected price growth in the range of more than four to five percent.

House prices have increased steeply since 2012 compared to the growth in income. Nationally, U.S. home prices rose 44 percent during the period 2012 Q1 –2017 Q4, based on the FHFA Home Price Index expanded, not seasonally adjusted data set.[2] Meanwhile, personal per capita income only increased by 17 percent during this period. Strong demand because of employment growth, historically low interest rates (though slowly creeping up), and inadequate home building (though steadily rising) have all contributed to the steep price increase since 2012.

According to Realtor.com data, listing prices were higher in March 2018 compared to one year ago in many metro areas, even in areas where prices are at or near the $1 million level, such as San Jose-Sunnyvale-Sta. Clara (+31%) and San Francisco-Oakland-Hayward (+6%). However, the median listing price decreased in Sta. Maria-Sta. Barbara (-28%) and Napa (-15%).

In high tax areas that were the most affected by the $10,000 total limit on deductions for property, state, and local income taxes, prices are still rising, such as in New York, Newark-Jersey City (+13%), Bridgeport-Stamford-Norwalk (+10%), New Haven-Milford (+5%), and Hartford (+4%).

Use the data visualization below to view the change in median listing prices in March 2018 from one year ago. Red areas are areas where prices rose compared to one year ago. Hover on the map to view the historical median listing prices of properties listed on Realtor.com from June 2012 through March 2018.[3]

Dashboard 1



[1] Because each month’s survey asks about the outlook in the next months, the responses collected from January-March 2018 covers the outlook for January 2018-March 2019.

[2] The FHFA HPI is a repeat price index. The expanded data set includes county recorder data set. See https://www.fhfa.gov/DataTools/Downloads/pages/house-price-index.aspx

[3] Realtor.com data is freely available and can be download from https://www.realtor.com/research

Property Values By State from 2005-2017

Home price appreciation is an important topic in today’s economy. Using data from the American Community Survey (ACS), we can analyze the gains and losses of property values over time. I estimated the median property values by state in 2017 using the FHFA index and the median property values from the (ACS). I then calculated the growth rate from 2005 -2017. [1]

The states with the highest estimated median property values in 2017 are Hawaii ($637,892), District of Columbia ($605,756), California ($522,431), Massachusetts ($396,992), and Colorado ($342,967).

The states with the lowest estimated median property values in 2017 are Alabama ($141,714), Oklahoma ($137,387), Arkansas ($129,902), West Virginia ($122,791) and Mississippi ($118,019).

On a regional level, the estimated price growth appears to be the strongest in the South, West, and Midwest. Price growth is weakest in the Northeast states. Overall, all regions are displaying growth in property values with only a few states showing no growth or loses. Below is a breakdown of the Census four regions by state.

  • In the South, which typically leads all regions in sales, Texas led the region with 63 percent estimated price growth from 2005 to 2017. Although Florida experienced strong price growth since 2012, home prices have only increased by 14 percent since 2005 when house prices were still generally at peak levels.

  • In the West, the least affordable region[2], Montana led all states with 71 percent price growth from 2005 to 2017. Despite the strong price growth in California since 2012, prices have only increased by 9 percent since 2005. Nevada shows a negative 5 percent price change over this time.

 

  • In the Midwest where affordability is most favorable, North Dakota led all states with 111 percent price growth from 2005 to 2017. The increase is likely due to the boom in shale oil production up until 2014 when oil prices started collapsing. Illinois, while having the smallest growth in the region had an estimated 7 percent price growth over this time.

  • In the Northeast where price growth is typically slow, Pennsylvania lead the region with a 40 percent price growth from 2005 to 2017. Rhode Island was the only state to have a decline of negative 4 percent price change over this time.

Click on the data visualization below to view the historical prices by state from 2005-2017.

Dashboard 1

 


[1] I used the FHFA expanded data set, not seasonally adjusted data.

[2] Based on NAR housing affordability index

March 2018 Existing-Home Sales

  • NAR released a summary of existing-home sales data showing that housing market activity this March increased 1.1 percent from last month but fell 1.2 percent from last year. March’s existing home sales reached 5.60 million seasonally adjusted annual rate.
  • The national median existing-home price for all housing types was $250,400 in March, up 5.8 percent from a year ago. This marks the 73nd consecutive month of year over year gains.
  • Regionally, all four regions showed growth in prices from a year ago, with the West leading all regions with an incline of 7.9 percent. The South had a gain of 5.7 percent followed by the Midwest with a gain of 5.1 percent. The Northeast had the smallest gain of 3.3 percent from March 2017.

  • March’s inventory figures are up 5.7 percent from last month to 1.67 million homes for sale. However, compared with March of 2017, fewer homes are available, with inventory down 7.2 percent, marking 34 months of year over year declines. It will take 3.6 months to move the current level of inventory at the current sales pace. Transactions are moving faster and it takes approximately 30 days for a home to go from listing to a contract in the current housing market, down from 37 days a year ago.

  • From February, two of the four regions experienced declines in sales. The West had the biggest decline of 3.1 percent followed by the South with a drop of 0.4 percent. The Midwest increased 5.7 percent followed by the Northeast, which had the biggest gain of 6.3 percent.
  • Two of the four regions showed modest inclines in sales from a year ago. The West had the biggest gain in sales of 0.8 percent followed by the South with an increase of 0.4 percent. The Northeast had the biggest drop in sales of 9.3 percent followed by the Midwest with a decline of 1.5 percent. The South led all regions in percentage of national sales, accounting for 42.9 percent of the total, while the Northeast had the smallest share at 12.1 percent.

  • In March, single-family sales increased 0.6 percent and condominiums sales rose 5.2 percent compared to last month. Single-family home sales fell 1.8 percent and condominium sales were down 3.2 percent compared to a year ago. Both single-family and condominiums had an increase in price with single-family up 5.9 percent at $252,100 and condominiums up 4.8 percent at $236,100 from March 2017.

 

 


Jack McSweeney, CDPE, PVS, e-PRO, SRES
REMAX Estate Properties

63 Malaga Cove Plaza, Palos Verdes Estates, CA., 90274
Phone: 310 346-0391     Lic. #01027223
Email: jack@mcsweeney.com

Contact Me







* fields are required