WASHINGTON (MarketWatch) – Sales of new U.S. homes jumped 15.6% in January to an annual rate of 437,000 to mark the highest pace of activity since July 2008, according to Commerce Department data released Tuesday. The rate of sales in January easily surpassed the 384,000 estimate of economists polled by MarketWatch. What’s more, December sales were revised up to 378,000 from an initial read of 369,000. The numbers are seasonally adjusted. The median price of new homes, however, fell more than 9% to $226,400 in January from $249,800, indicating that buyers flocked to less expensive properties. Sales rose the fastest in the West, up 45.3%, and they also climbed 27.6% in the Northeast. Sales might have benefited in the Northeast from unseasonably warm winter weather that persisted from December into early January. The supply of new homes available for purchase fell to 4.1 months at the current sales rate from 4.8 months in December – the lowest level since early 2005. New home sales are almost 29% higher compared to one year ago.
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WASHINGTON (MarketWatch) — Construction on new U.S. homes in March hit the highest rate in almost five years, as starts for apartments jumped, according to data released Tuesday by the Department of Commerce.
The report pointed to an ongoing rebound in housing activity: starts in March were up 47% from the same period in the prior year, the largest year-over-year growth since 1992.
Housing starts rose 7% in March to a seasonally adjusted annual rate of 1.04 million, the highest rate since June 2008. Economists polled by MarketWatch had expected construction starts in March to rise to a rate of 933,000 from an original February estimate of 917,000. The government on Tuesday also revised up February’s starts rate to 968,000.
WASHINGTON (April 2, 2013) – Vacation home sales improved in 2012, while investment purchases remained elevated for a second consecutive year, according to the National Association of Realtors®.
NAR’s 2013 Investment and Vacation Home Buyers Survey,* covering existing- and new-home transactions in 2012, shows vacation-home sales rose 10.1 percent to 553,000 from 502,000 in 2011. Investment-home sales declined 2.1 percent to 1.21 million from 1.23 million in 2011, but those sales had been well under a million during the market downturn. Owner-occupied purchases jumped 17.4 percent to 3.27 million last year from 2.79 million in 2011.
Vacation-home sales accounted for 11 percent of all transactions last year, unchanged from 2011, while the portion of investment sales was 24 percent in 2012, down from 27 percent in 2011, marking the second highest share since 2005.
NAR Chief Economist Lawrence Yun said favorable conditions are driving second-home sales. “We had a strong stock market recovery, which helps more people in the prime ages for buying vacation homes. Attractively priced recreational property is also a big draw,” he said.
Yun notes an ongoing investor presence. “Investors have been very active in the market over the past two years, attracted mostly by discounted foreclosures that could be quickly turned into profitable rentals,” he said. “With rising prices and limited inventory, notably in the low price ranges, investors are likely to step back in coming years.”
The median investment-home price was $115,000 in 2012, up 15.0 percent from $100,000 in 2011, while the median vacation-home price was $150,000, compared with $121,300 in 2011, reflecting a greater number of more expensive recreational property sales in 2012.
All-cash purchases remain common in the investment- and vacation-home market: half of investment buyers paid cash in 2012, as did 46 percent of vacation-home buyers. Forty-seven percent of investment homes purchased in 2012 were distressed homes, as were 35 percent of vacation homes.
Of buyers who financed their purchase with a mortgage in 2012, large downpayments remain typical. The median downpayment for both investment- and vacation-home buyers was 27 percent, the same as in 2011.
Investment-home buyers in 2012 had a median age of 45, earned $85,700 and bought a home that was relatively close to their primary residence – a median distance of 21 miles, although 29 percent were more than 100 miles away. Thirty-five percent of investment buyers purchased more than one property.
“Property flipping modestly increased in in 2012,” Yun said. “However, this isn’t flipping in the sense of what took place during the housing boom. Rather, investors generally are renovating and improving properties before placing them back on the market to resell at a profit.”
Six percent of homes purchased by investment buyers last year have already been resold, and another 8 percent are planned to be sold within a year. In the 2011 study, 5 percent of investment homes were already resold, and 8 percent were planned to be sold within a year. Overall, investment buyers plan to hold the property for a median of 8 years, up from 5 years in 2011.
Seventy-eight percent of all second-home buyers said it was a good time to buy, compared with 68 percent of primary residence buyers. “This suggests that second-home buyers tend to be a step ahead of general buyers in sensing a market recovery,” Yun said.
The typical vacation-home buyer was 47 years old, had a median household income of $92,100 and purchased a property that was a median distance of 435 miles from their primary residence; 34 percent of vacation homes were within 100 miles and 46 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years.
Lifestyle factors remain the primary motivation for vacation-home buyers, while rental income is the main factor in investment purchases.
Buyers listed many reasons buyers for purchasing a vacation home: 80 percent want to use the property for vacations or as a family retreat, 27 percent plan to use it as a primary residence in the future, 23 percent plan to rent to others and 23 percent wanted to diversify their investments or saw a good investment opportunity.
Fifty-five percent of investment buyers said they purchased for rental income, 30 percent wanted to diversify their investments or saw a good investment opportunity, and 20 percent wanted to use the home for vacations or as a family retreat.
Eleven percent of vacation buyers and 16 percent of investment buyers purchased the property for a family member, friend or relative to use, often for a son or daughter to use while attending school.
Forty-five percent of vacation homes purchased last year were in the South, 25 percent in the West, 17 percent in the Northeast and 12 percent in the Midwest.
Thirty-six percent of investment properties purchased last in the South, 28 percent in the West, 20 percent in the Northeast and 16 percent in the Midwest.
Forty-seven percent of investment buyers said they were likely to purchase another investment property within two years, as did 37 percent of vacation-home buyers. Twenty-nine percent of vacation buyers said they were likely to purchase another vacation home within two years, as did 31 percent of investment buyers.
Approximately 42.8 million people in the U.S. are ages 50-59 – a group that dominated second-home sales in the middle part of the past decade and established records. An additional 43.1 million people are 40-49 years old, which is the prime age for current buyers, while another 40.1 million are 30-39.
NAR’s analysis of U.S. Census Bureau data shows there are 7.9 million vacation homes and 43.7 million investment units in the U.S., compared with 75.2 million owner-occupied homes.
NAR’s 2013 Investment and Vacation Home Buyers Survey, conducted in March 2013, includes answers from 2,326 usable responses about homes purchased during 2012. The survey controlled for age and income, based on information from the larger 2012 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents.
The 2013 Investment and Vacation Home Buyers Survey can be ordered by calling 800-874-6500 , or online at www.realtor.org/prodser.nsf/Research. The report is free to NAR members and costs $149.95 for non-members.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries. For additional commentary and consumer information, visit www.houselogic.com and http://retradio.com.
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*Vacation homes are recreational property purchased primarily for the buyer’s (or their family’s) personal use, while investment homes are residential property purchased primarily to rent to others, or to hold for other financial or investment purposes.
WASHINGTON (MarketWatch) — Existing-home sales rose in February to reach the highest rate in more than three years, another sign of a strengthening housing market, as inventories posted an unusually large gain in the month, a trade group said Thursday.
Economists polled by MarketWatch had expected a pace of 5.02 million for February, compared with an original estimate of a 4.92 million rate in January. See economic calendar. On Thursday, NAR upwardly revised January’s rate to 4.94 million.
While sales remain below prerecession and bubble levels, low mortgage rates and an improving jobs picture are supporting demand. Also, rising prices are encouraging activity, luring sellers to place homes on the market.
Inventories rose 9.6% in February to 1.94 million existing homes available for sale. The months’ supply of existing homes rose to 4.7 in February from 4.3 in January, the first increase since April, but still a relatively low figure. January’s months’ supply was the lowest since May 2005.
Compared with February 2012, the median sales price rose 11.6% to $173,600. Elsewhere Thursday, a federal agency reported that home prices in January climbed 6.5% from the same period in the prior year. Read more about the government’s estimate.
“The trend in home sales still looks up; with inventories down sharply, prices are rising as well,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics, wrote in a research note. “While levels are still low, housing is now the strongest part of the economy in growth terms.”
Other housing data released this week indicated a housing market that is growing stronger over the long term, despite some mixed recent indicators. Construction on new U.S. homes recently nudged up, and confidence among home builders declined. Read more about construction.Read more about builder confidence.
Going forward, there’s concern that overly stringent lending standards and ongoing high unemployment could cut the housing market’s improvement.
Still, analysts expect the housing market to continue to add to economic growth this year given the Federal Reserve’s backing and an economy that is adding jobs. Indeed, a recent reading on building permits, which are a sign of future demand, hit the highest level since June 2008.
The recent rises in asking prices has been outpacing the increases in rents, but home buying still may make more financial sense, a new study shows. Owning a house was found to be 44 percent cheaper than renting, according to the latest study from Trulia that compared the costs of the two.
The study found that owning is less than half the cost of renting in 46 of the 100 largest metros. “Buying a home is cheaper than renting in all of the 100 largest metro areas,” according to Trulia.
Falling mortgage rates are helping to keep home buying more affordable. But depending on where you live, the difference between owning versus renting can be big or small. For example, in San Francisco, home ownership was found to be 19 percent cheaper than renting, whereas in Detroit owning a house is 70 percent cheaper than renting.
The following are places where home purchases exceed renting by the highest amounts:
- Dayton, Ohio
- Gary, Ind.
- Cleveland, Ohio
- Warren-Troy-Farmington Hills, Mich.
- Toledo, Ohio
- Memphis, Tenn.-Miss.-Ark.
- Kansas City, Mo.-Kan.
- Birmingham, Ala.
By Ruth Mantell, MarketWatch
Construction on new U.S. homes edged up in February, as longer-term trends signaled a housing market that continued to strengthen, government data show.
WASHINGTON (MarketWatch) — Construction on new U.S. homes nudged up in February with modest gains for single-family residences and apartments, as longer-term trends signaled a housing market that continued to strengthen, according to data released Tuesday.
The U.S. Department of Commerce’s report also showed substantial gains in building permits, which indicate future demand.
Construction on new U.S. homes rose 0.8% in February to a seasonally adjusted annual rate of 917,000, the highest level since December. Economists polled by MarketWatch had expected construction starts in February to rise to a rate of 913,000 from an original January estimate of 890,000. On Tuesday the government upwardly revised January’s starts rate to 910,000. See economic calendar.
Starts for single-family homes rose 0.5% in February to a rate of 618,000, the highest level since June 2008. Meanwhile, starts for structures with at least five units increased 0.7% to a rate of 285,000, the highest level since December.
The longer-term picture points to a rebound in activity — starts in February were up 28% from the same period in the prior year. Despite construction gains, which have been fueled by pent-up demand and affordability, starts remain below a bubble peak of almost 2.3 million in 2006.
“The overall picture on the housing starts front has been somewhat tepid over the past two months. Nevertheless, the housing recovery continues to run at a solid pace, with both broader trends pointing to a steady recovery in the sector,” wrote Gennadiy Goldberg, a strategist at TD Securities, in a research note.
Going forward, there’s concern that overly stringent lending standards and ongoing high unemployment could cut progress. However, a recent report on confidence among home builders signaled that their outlook on upcoming sales increased in March, while their views about present home sales worsened.
Ruth Mantell is a MarketWatch reporter based in Washington. Follow her on Twitter @RuthMantell.
By Jeffry Bartash
By Ruth Mantell
WASHINGTON (MarketWatch) — U.S. home prices rose in December, and saw the largest year-over-year gain since 2006, according to the S&P/Case-Shiller home-price index released Tuesday. The S&P/Case-Shiller 20-city composite posted a nonseasonally adjusted 0.2% increase in December, following a 0.1% decline in November. After seasonal adjustment, home prices rose 0.9% in December. “Home prices ended 2012 with solid gains,” said David Blitzer, index committee chairman at S&P Dow Jones Indices. Looking at longer-term trends, December’s prices were up 6.8% from the same period in the prior year — the largest annual gain since July 2006 – with increases in 19 of 20 cities. New York was the only city with a year-over-year decrease, falling 0.5%. Low inventories and increasing demand have supported prices over the past year. Despite housing-market gains, prices remain about 29% below a bubble peak in 2006, according to Case-Shiller data.