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Thursday, February 27, 2020

Home Sales Jump


Sales of new homes jumped in January to an annualized rate of 764,000, according to the Census Bureau and the Department of Housing and Urban Development.
According to Census data, January’s pace increased from December, which was upwardly revised from 694,000 to 708,000.
January’s total, which is 7.9% above December’s pace, was also 18.6% higher than January 2019, when new home sales hit an annualized rate of 644,000.
During the month, new home sales surged boosted by lower interest rateswarm weather and an uptick in home building, said Robert Frick, corporate economist for Navy Federal Credit Union. 
“We can expect the trend to continue as mortgage rates have fallen even lower in recent weeks, and more jobs are driving up demand,” Frick said. “However, scant evidence exists that home builders are making more low-priced homes, which are sorely needed by first-time homebuyers.”

Tuesday, February 18, 2020

Home Prices Jumped in December



In December, home prices climbed by 4% from the previous year, according to CoreLogic’s latest Home Price Forecast.
The CoreLogic HPI projects future home price growth based on several economic variables and measures the number of owner-occupied households in each state.
According to CoreLogic’s data, home prices increased by 0.3% from November 2019 and are now projected to increase by 5.2% come December 2020.
Frank Nothaft, CoreLogic’s chief economist, said the nation’s housing affordability has worsened as a lack of inventory continues to drive home price growth.
“Moderately priced homes are in high demand and short supply, pushing up values and eroding affordability for first-time buyers,” Nothaft said. “Homes that sold for 25% or more below the local median price experienced a 5.9% price gain in 2019, compared with a 3.7% gain for homes that sold for 25% or more above the median.”
CoreLogic indicates these price gains are negatively impacting the nation’s Millennial homebuyers, who not only tend to fall into the first-time buyer category but also continue to grapple with affordability woes.
During the second quarter of 2019, CoreLogic conducted a survey measuring consumer-housing sentiment among the nation’s younger and older Millennials, aged between 21 and 29, and 30 and 38, respectively.  
The company’s findings revealed while 79% of younger Millennial renters express a desire to purchase a home in the future, many still cite affordability as a top concern.
“On a national level, home prices are on an upswing. Price growth is likely to accelerate in 2020. And while demand for homeownership has continued to increase for Millennials, particularly those in their 30s, 74% admit they have had to make significant financial sacrifices to afford a home,” Frank Martell, CoreLogic’s president and CEO said. “This could become an even bigger factor as home prices reach new heights during 2020.”
This is concerning for the demographic, considering CoreLogic’s recent MCI report revealed that 40% of the nation’s metropolitan areas had an overvalued housing market as of January.
The MCI, which details the housing values in America’s 100 largest housing markets, categorizes home prices in individual markets as undervalued, at value or overvalued, by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals such as disposable income and more, according to CoreLogic.
During the month, 40% of the country’s top 100 metropolitan areas were overvalued, 26% were undervalued and 41% were at market value, according to the company.
NOTE: The CoreLogic HPI is based on public record, servicing and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends.