More Young Adults Living at Home

More Young Adults Living at Home. Image courtesy of imagerymajestic / FreeDigitalPhotos.net

The job market is rebounding and wages are increasing, yet a higher number of millennials—people born after 1981—are still living with their parents or other adults.

A new Pew Research Center study of U.S. Census Bureau data showed that in the first part of 2015, 26 percent of millennials lived with their parents, which is up from 22 percent in 2007 at the height of the recession, and 24 percent in 2010, at the start of the economic recovery.

There’s also an increase in young people living in “doubled-up” households, Pew reports. A doubled-up household is one in which there is an extra adult who is not the spouse or unmarried partner, often a parent, relative or a roommate. In the first four months of 2015, 48 percent of millennials were living in this type of living situation.

This is despite an improving job climate for young people. The national unemployment rate for millennials was 7.7 percent in the first part of 2015, a sizeable recovery from the 12.4 percent of millennials unemployed in 2010. Wages also increased slightly, with median weekly earnings up $574 this year from $547 in 2010.

“This may have important consequences for the nation’s housing market recovery, as the growing young adult population has not fueled demand for housing units and the furnishings, telecom and cable installations and other ancillary purchases that accompany newly formed households,” says Richard Fry, senior economist at Pew Research Center.

Rising rents across the country may be to blame for keeping young adults from heading out on their own. Recent research from NAR showed that the gap between rental costs and income is widening to unsustainable levels in many parts of the country, and rents throughout the country are showing no sign of slowing down.

Additionally, many millennials are still saddled with student loan debt, making it hard for them to qualify for a mortgage.

The increase of millennials living at home impacts the entire economy. “The decline in the rate at which young adults are forming households from 2007 to 2015 has had a negative impact on the demand for the nation’s housing and, in turn, residential construction,” says Fry. …”In other words, young adults have been a key demographic in the nation’s housing bust.”

Source: “More Millennials Living With Family Despite Improved Job Market,” Pew Research Center (July 29, 2015)

47% of Homes Are Selling in Less Than a Month

47% of Homes Are Selling in Less Than a Month. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

In some cities across the country, homes are selling faster than ever.

Nationally, properties typically stayed on the market for 34 days in June, the shortest number of days since the National Association of REALTORS® began tracking in May 2011. Short sales spent the most time on the market with a median of 129 days, foreclosures sold in 39 days, and non-distressed homes were on the market for 33 days. NAR reports that 47 percent of homes sold in less than a month in June.

The real estate brokerage Redfin’s barometer is showing the median time on the market dropped to just 26 days in June, the shortest time on record. In some hot housing markets, homes were falling under contract in 11 days or less.

Denver homes sold in six days or fewer in June; Seattle’s median was nine days; Portland was 10 days; and Boston was 11 days, according to Redfin.

But some cities are seeing longer selling times. For example, the median time on the market for homes in Brownsville, Texas was 122 days; Myrtle Beach, S.C., was 105 days; Miami was 75 days; and metro New York 68 days, according to June data from realtor.com®, which is based off of information from local MLSs nationwide.

The strength of the local economy, employment and income growth, and low inventories of homes for sale compared to demand are all factors that lead to faster selling times, according to economists.

Source: “Selling Times Reaching New Lows,” The Seattle Times (July 28, 2015) and “Home Prices Reach an All-Time High,” REALTOR® Magazine Daily News (July 23, 2015)

The 8 Biggest Concerns for REALTORS®

The 8 Biggest Concerns for REALTORS®. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

REALTORS® are “strongly confident” about the housing market’s outlook over the next six months, although confidence has eased since the beginning of this spring, according to the latest REALTORS® Confidence Index, a monthly survey of nearly 3,000 REALTORS® about local market conditions.

In general, REALTORS® continued to report “strong” local market conditions last month for single-family and townhome properties. The strong confidence is being buoyed by strong job creation, the reduction in the Federal Housing Administration’s annual mortgage insurance premium rates, and the acceptance of Fannie Mae and Freddie Mac’s 3 percent down payment loans.

Still, REALTORS® are reporting several issues with the market. The survey revealed the following top concerns:

• The upcoming TILA-RESPA Integrated Disclosure regulations, which take effect Oct. 3, and concerns that they could delay closings.
• Tight inventory with a limited number of homes for-sale.
• Affordability issues: Fewer affordable homes so sellers are also hesitant to move.
• Financing issues, such as difficulty in qualifying for a mortgage due to higher FICO credit and down payment standards, protracted mortgage approval process, and condo-financing issues.
• Appraisal issues: conservative estimates, “out-of-town appraisers,” and slow turn-around.
• Rising interest rates.
• Declining demand from international buyers due to a strong U.S. dollar.
• Uncertainty about flood insurance rates and reform.

Source: “June 2015 REALTORS® Confidence Index,”National Association of REALTORS® (June 2015)

3 Reasons Why It’s a Great Time for Sellers

3 Reasons Why It’s a Great Time for Sellers. Image courtesy of ponsulak / FreeDigitalPhotos.net

Rising home prices, demand from home buyers, and less competition is making 2015 a stellar year to sell for many U.S. home owners across the country, says Daren Blomquist, RealtyTrac’s vice president.

Blomquist points to these three factors behind why this year is shaping up more favorably for sellers:

1. Stronger demand coming from buyers: Sellers in many markets are seeing stronger demand from a larger pool of buyers, including first-time buyers, boomerang buyers (previous owners who lost their home to foreclosure), as well as traditional owner-occupant buyers. Particularly of note lately, the number of buyers using Federal Housing Administration – typically low down payment loans often used by first-time home buyers – is on the rise, accounting for 23 percent of all single-family home and condo sales with financing in the second half of 2015. That marks the highest share since the first quarter of 2013, according to RealtyTrac’s Midyear 2015 U.S. Home Sales report.

2. Home prices are skyrocketing: Single-family home and condo sellers in the first half of this year sold for an average of 13 percent above their original purchase price. “So far in 2015, [sellers] are realizing the biggest gains in home price appreciation since 2007,” Blomquist says. “In June, sellers sold for above estimated market value on average for the first time in nearly two years.” Median sales prices of existing-homes pushed above the previous 2006 peak to a record high in June, the National Association of REALTORS® reported this week. The median existing-home price for all housing types was $236,400 in June – surpassing the peak median sales price set in July 2006 at $230,400.

3. Sellers have less competition: Inventories of for-sale homes remains tight, which has forced buyers to have to compete for the limited supply. Distressed sales –properties in the foreclosure process or bank-owned – accounted for 8 percent of all single-family and condo sales in June, the lowest monthly share since January 2011. In 2011, the share of distressed sales had reached a monthly peak of nearly 46 percent of all single-family and condo sales.

Source: “2015 Great Year to Sell,” RealtyTrac (July 22, 2015)

Home Prices Reach an All-Time High

Home Prices Reach an All-Time High. Image courtesy of renjith krishnan / FreeDigitalPhotos.net

The rise in buyer demand combined with a limited number of homes for sale pushed the national median sales price above its 2006 peak and to a record high, according to the National Association of REALTORS®.

The median existing-home price for all housing types reached $236,400 in June – 6.5 percent above year ago levels and surpassing the peak median sales price set in July 2006 at $230,400.

Along with a boost in home prices last month, existing-home sales also reached the highest pace in more than eight years. Lawrence Yun, NAR’s chief economist, calls this year’s spring buying season the strongest since the downturn.

“Buyers have come back in force, leading to the strongest past two months in sales since early 2007,” Yun says. “This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that’s giving more households the financial wherewithal and incentive to buy.”

Yun says that June’s sales also likely got a boost by the spring’s initial phase of rising mortgage rates. That “usually prods some prospective buyers to buy now rather than wait until later when borrowing costs could be higher,” Yun says.

Total sales of completed single-family, townhome, condo, and co-op transactions ticked up 3.2 percent last month to a seasonally adjusted annual rate of 5.49 million and are nearly 10 percent above year ago levels. Sales also are the highest pace since February 2007. All major regions of the U.S. saw sales move higher in June.

The number of homes for-sale across the country remains low, as housing inventories only saw a 0.9 percent increase in June to 2.30 million existing homes for-sale. Inventories are 0.4 percent higher than a year ago. Unsold inventory is at a 5-month supply at the current sales pace.

“Limited inventory amidst strong demand continues to push home prices higher, leading to declining affordability for prospective buyers,” says Yun. “Local officials in recent years have rightly authorized permits for new apartment construction, but more needs to be done for condominiums and single-family homes.”

But with inventories still low, properties are selling faster. Forty-seven percent of homes sold in less than a month in June, according to NAR. Properties typically stayed on the market for 34 days in June, the shortest number of days since NAR began tracking in May 2011. Short sales had the longest days on the market with a median of 129 days, while foreclosures sold in 39 days. Non-distressed homes were on the market for 33 days.

Chris Polychron, NAR’s president, says that real estate professionals are reporting drastic imbalances of supply compared to buyer demand in several metro areas, most notably in the West.

“The demand for buying has really heated up this summer, leading to multiple bidders and homes selling at or above the asking price,” Polychron says. “Furthermore, tight inventory conditions are being exacerbated by the fact that some home owners are hesitant to sell because they’re not optimistic they’ll have adequate time to find an affordable property to move into.”

Source: National Association of REALTORS®