Category Archives: housing inventory

2016 existing-home sales hit highest peak since 2006

Posted on by

2016 was the best year for existing home sales in the past decade, according to the National Association of Realtors®.

Previously, 2015 had the best year in the past decade for existing home sales with 5.25 million, but 2016 saw sales of 5.45 million, the highest it has been since sales hit 6.48 million in 2006. Sales slipped a bit in December 2016, but still saw an increase of .7 percent from December 2015.

The median existing-home price in December 2016 was $232,200, an increase of 4 percent from December 2015’s average of $223,200.

“Solid job creation throughout 2016 and exceptionally low mortgage rates translated into a good year for the housing market,” he said. “However, higher mortgage rates and home prices combined with record low inventory levels stunted sales in much of the country in December,” said Lawrence Yun, NAR’s chief economist. “While a lack of listings and fast rising home prices was a headwind all year, the surge in rates since early November ultimately caught some prospective buyers off guard and dimmed their appetite or ability to buy a home as 2016 came to an end.”

Housing inventory continues to remain an issue. In December, inventory fell to 1.65 million, a decrease of 10.8 percent from November,and the lowest NAR has seen since it began the reports in 1999. Properties were on the market for an average of 52 days, representing an increase of nine days compared to November, but a decrease of six days from December 2015.

Throughout 2016, nearly one-third of buyers were first-time homebuyers, a number that remained consistent throughout the past two years.

Region-wise, in the Northeast, the median price was $245,900 in December 2016, a 3.8 percent decrease from December 2015. Additionally, sales slipped 6.2 percent in December to an annual rate of 760,000, an increase of 2.7 percent, compared to 2015.

Mortgage rates causing hesitations in first-time homebuyers

Posted on by

The rising of mortgage rates at the end of 2016 is causing some would-be first-time homebuyers a little hesitation in house hunting this spring.

In October 2016, 55 percent of potential homebuyers were planning to make their first home purchase in the spring. This number has dropped to 44 percent this month, according to realtor.com®. The website reported that the average 30-year conforming rate rose .8 percent from September to December 2016, and would cost, on average, an extra $720 per year in interest.

“Last fall, we saw a large jump in the number of first timers planning home purchases, which was very encouraging because their market share is still well below pre-recession levels,” said Jonathan Smoke, chief economist for realtor.com®. “But, as evidenced by their decline in share, first-time buyers are really dependent on financing and affordability is one of their largest barriers to home ownership. This number could continue to decline with anticipated increases in interest rates and home prices.”

While first-time buyers accounted for nearly one-third of buyers in November 2016, first-time buyers were almost five times more likely than repeat buyers to report that they struggled to qualify for a mortgage.

In addition to mortgage rates, the continued lack of inventory on the market is impacting would-be first-time homeowners. Inventory on realtor.com® in December 2016 was down 11 percent from December 2015. Another aspect of the low amount of inventory is that the cost of homes is still above average. In December 2016, homes on the market cost 9 percent more than they did in 2015.

Realtor.com® also reported that the average listing views saw an increase of 40 to 80 percent during the last few weeks in December 2016, compared to December 2015, as more buyers are striving to purchase the same homes.