Spring housing market could be ‘coolest in recent years,’ Realtor.com says
PUBLISHED WED, FEB 27 2019 • 12:10 PM EST | UPDATED WED, FEB 27 2019 • 6:25 PM EST
- The median price of a home listed in February jumped 7 percent annually to $294,800, according to Realtor.com.
- The increase came as the number of listings rose 6 percent, with an additional 73,000 listings compared with a year ago.
The supply of homes for sale is finally rising, but fewer buyers are able to afford these homes. That could result in a much slower spring market.
Spring is usually the high season for housing, but high home prices have been taking their toll for months. The numbers point to potential trouble ahead.
The median price of a home listed in February jumped 7 percent annually to $294,800, according to Realtor.com. The price increase came as the number of listings rose 6 percent, with an additional 73,000 listings compared with a year ago.
“This is the fifth consecutive month that we’ve seen housing inventory increase, especially in large markets,” said Danielle Hale, Realtor.com’s chief economist.
Buyers did come back in January, with signed contracts jumping a wider-than-expected 4.6 percent month to month, according to the National Association of Realtors. Most point squarely to the drop in mortgage rates that occurred in December as the cause for the rebound. Gains were strongest in the South, where prices are relatively low, and weakest in the West, where they are highest.
Volume nationally, however, was still lower than in January of last year.
“That’s a sign that while housing is going to pick up from late 2018′s sluggish level, which we expected given lower mortgage rates, it’s still at a slower pace than we what saw in early 2018. Affordability continues to be a challenge for first-time buyers,” added Hale.
The biggest supply increases were in the nation’s 50 largest metropolitan markets, where inventory overall was 11 percent higher. The West Coast led the way, with San Jose seeing a 125 percent increase in the number of listings. That is likely because more of these pricey listings are going unsold and piling up.
Seattle, also an overheated housing market, saw an 85 percent jump in listings, followed by a 53 percent increase in San Francisco, 39 percent increase in San Diego, and 36 percent increase in Portland, Oregon.
Sellers are starting to respond by cutting prices. In February, 39 of the 50 largest markets saw an increase in share of price cuts, according to the report. Las Vegas saw the biggest change, a 19 percent jump in the number of sellers slashing their asking prices. That is absolutely due to higher supply.
By the end of January, there were 7,254 single-family homes listed for sale without any sort of offer in Las Vegas. That’s up 95 percent from one year ago, according to the Greater Las Vegas Association of Realtors.
Supply nationally, however, differs dramatically by price point. In February, the number of homes priced at or above $750,000, which is close to three times the national median, increased by 11 percent annually, according to Realtor.com.
The opposite is happening at the entry level. The supply of homes priced at $200,000 or below has decreased 7 percent year-over-year, indicating that availability of affordable homes will remain an issue for many potential buyers, especially first-time buyers. The share of first-time buyers fell in January, according to the National Association of Realtors.
“I think the spring housing market will see some signs of a rebound, but it will be slower than expectations, slower than what homebuyer demand would suggest and that’s because housing has these structural headwinds that are not going away, even when interest rates are going slower and even as wages are going up. The structural issues are on the supply side,” said Nela Richardson, a senior investment strategist at Edward Jones.
The nation’s homebuilders are not helping much at the entry level, as they continue to focus on the move-up market. Housing starts and builder permits have shown no major growth and continue to sit at historically low levels, especially given today’s high demand from millennials.
“Looking forward, we continue to point to a more mixed set of fundamentals that will likely result in the housing market recovery continuing at the more tepid pace than seen over the last 1 to 2 years, led by job growth remaining positive although decelerating, credit continuing to ease at a modest pace, affordability declining and new home inventory rising,” wrote Michael Rehaut, a housing analyst with J.P. Morgan.
MA Single-Family Home Sales, Median Price Climb in February
Condo sales up as median sale price edges lower.
PEABODY, March 27, 2019 – Massachusetts single-family home sales spiked on a year-over-year basis as the median sale price reached an all-time high for the month of February, according to a new report from The Warren Group, publisher of Banker & Tradesman.
Last month, there were 2,810 total sales recorded in Massachusetts, an 8.7 percent increase from February 2018 when there were 2,585 transactions. This marked the highest number of sales for the month of February since 2016. Meanwhile, the median single-family sale price increased 7.4 percent on a year-over-year basis to $365,000, which marked an all-time high for the month of February. Year-to-date, there have been 6,044 single family home sales with a median sale price of $365,000.
First Down Program
Financial Assistance for Homebuyers in Rhode Island
In an effort to assist potential homebuyers afford the costs of buying a new home, Rhode Island Housing (RIH) established the First Down Program, a forgivable loan secured by a second mortgage that targets the six Rhode Island communities most affected by the foreclosure crisis: Providence, Pawtucket, Woonsocket, Warwick, Cranston and East Providence. The program aids first-time homebuyers with $7,500 in down payment assistance.
The First Down Program is available to eligible, first-time homebuyers who:
- Are purchasing a one- to four- family home or condominium.
- Meet Rhode Island Housing loan and income limits.
- Are financing their first mortgage through a participating lender or Rhode Island Housing.
- Plan to occupy the home as their primary residence.
The down payment assistance of $7,500 is forgivable after five years of owning the home, as long as borrowers use it as their primary residence (i.e. buyers do not need to repay the amount if they reside in the home for five years). The maximum loan limit allowed is $424,100 for a one- to four-family home or eligible condominium.
n eligible first-time homebuyers’ annual household income must fall under the minimum of $87,360 for a 1-2 person household, or $101,920 for a 3+ person household.
The First Down Program is only available to borrowers financing their home with a Rhode Island Housing first mortgage, available through their network of participating lenders and the Rhode Island Housing Loan Center. RIH requires that a portion of First Down loan be repaid if buyers sell, refinance, or transfer their home within five years of closing the loan.
*The Rhode Island Housing determined the targeted areas that would be eligible for the First Down program by evaluating all communities in the state at a zip code level. RIH identified which areas had higher than average indicators of seriously delinquent mortgage loans, negative equity, distressed sales, short sales, foreclosure rates and vacant homes.