This Week in Real Estate: July 30, 2018

While the Census Bureau believes the national homeownership rate seems to be on a sustainable upward trend, homeowners who sold in Q2 2018 sold their home for the highest average price gain since Q3 2007. According to ATTOM Data Solutions’ Q2 2018 Home Sales Report released This Week in Real Estate, sellers in Seattle and Portland ranked third and fifth, respectively, with the highest average percentage gain. Below are a few highlights from the last full week of July that influence our business:

* Strong Owner Household Formations in the Second Quarter. According to the Census Bureau’s Housing Vacancy Survey (HVS), the U.S. homeownership rate was 64.3% in the second quarter 2018. After dropping to a cycle low of 62.9% in the second quarter 2016, the national homeownership rate seems to be on a sustainable upward trend. Compared to the peak of 69.2% in 2004, the homeownership rate is lower by five percentage points. The count of total households, however, increased to 121 million in the second quarter 2018 from 119 million at the same period in 2017. The gains were predominantly driven by owner households, while renter households only increased 146,000. The homeownership rates among all age groups under 54 increased over the last year. Household ages 45-54 registered the largest gains among all households, a 1.3 percentage points increase from a year ago. The homeownership rates of millennials, mostly first-time homebuyers, continued the upward growing trend, from 35.3% to 36.5%. It suggests that millennials are gradually returning to the for-sale housing market. However, current homeownership rates for adults ages under 35 are still 5.4 percentage points lower than before the Great Recession. Households ages 35-44 experienced a 1.2 percentage points increase on an annual basis. The number of homeowner households has been rising since the third quarter 2016, while the number of renter households has been on the downward trend. In the second quarter 2018, the number of homeowners increased by 2.2 million, while the number of renter households rose by 146,000.
Full Story… http://eyeonhousing.org/2018/07/strong-owner-household-formations-in-the-second-quarter/

* U.S. Median Home Price Appreciation Decelerates in Q2 2018 to Slowest Pace in Two YearsATTOM Data Solutions released its Q2 2018 U.S. Home Sales Report on Thursday, which shows that U.S. single family homes and condos sold for a median price of $255,000 in the second quarter, up 6.3 percent from a year ago to a new all-time high but the slowest annual appreciation since Q2 2016. “Annual home price appreciation nationwide has now slowed for five consecutive quarters following a post-election spike to double-digit appreciation in the first quarter of 2017,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Although home sellers are still in the driver’s seat of this housing market, moderating home price appreciation is good news for prospective homebuyers and signals that rising mortgage rates and other housing headwinds are cooling red-hot home price appreciation in some areas.” Annual home price appreciation in Q2 2018 decelerated from the previous quarter in 80 of the 122 metros (66 percent) analyzed for median home prices, including Los Angeles, Chicago, Dallas-Fort Worth, Houston and Philadelphia. Counter to the national trend, annual home price appreciation accelerated from the previous quarter in 42 of the 122 metros analyzed (34 percent), including New York, Washington, D.C., Boston, San Francisco and Detroit. Among 122 metropolitan statistical areas analyzed in the report, those with the biggest year-over-year increase in median prices were San Jose, California (up 25.0 percent); Flint, Michigan (up 23.7 percent); Seattle, Washington (up 14.3 percent); Boise, Idaho (up 14.3 percent); and San Francisco, California (up 14.2 percent). Homeowners who sold in Q2 2018 sold for an average of $58,000 more than their original purchase price, the highest average home seller price gain since Q3 2007. Among 147 metropolitan statistical areas analyzed for average home seller gains, those with the highest average percentage gain were San Jose, California (116.6 percent); San Francisco, California (85.0 percent); Seattle, Washington (76.5 percent); Boston, Massachusetts (64.3 percent); and Portland, Oregon (62.1 percent).
Full Story… https://www.attomdata.com/news/market-trends/home-sales-prices/q2-2018-u-s-home-sales-report/

* Foreign Buyers Lessen Their Investments in U.S. Real Estate. Ongoing housing shortages and rising home prices are prompting international buyers to pause in their recent home buying sprees in the United States. International sales in the U.S. totaled $121 billion from April 2017 to March 2018, a 20 percent decline from a year ago, the National Association of REALTORS® reports. Foreign buyers and recent immigrants accounted for 8 percent of existing home sales, a decrease from 10 percent during the 12-month period that ended March 2017, according to NAR’s 2018 Profile of International Transactions in U.S. Residential Real Estate.  “After a surge in 2017, we saw a decrease in foreign activity in the housing market in the latest year, bringing us closer to the levels seen in 2016,” says Lawrence Yun, NAR’s chief economist. “Inventory shortages continue to drive up prices, and sustained job creation and historically low interest rates mean that foreign buyers are now competing with domestic residents for the same, limited supply of homes.” Foreign buyers usually purchase properties that are pricier than the average existing home. The median price for a foreign buyer was $292,400 compared to a median price of $249,300 for all existing homes. Chinese buyers tend to purchase the most expensive properties in the U.S. at a median price of $439,100. Five countries comprised nearly half—49 percent—of the dollar volume of purchases by foreign buyers: China, Canada, India, Mexico, and the United Kingdom. China—for the sixth consecutive year—continued to have the largest dollar volume of purchases. Still, Chinese buyers’ involvement in the market decreased; they purchased an estimated $30.4 billion in residential property in the U.S., a drop of 4 percent from last year.
Full Story… https://magazine.realtor/daily-news/2018/07/26/foreign-buyers-lessen-their-investments-in-us-real-estate

Have a productive week.

Jason

 


This Week in Real Estate: July 23, 2018

Through the first five months of 2018 the number of single-family residential permits issued realized an 8% year-over-year increase. The nationwide increase is due in large part to the increases in the Southern and Western states, 17.9% and 17.0%. According to a report by data and analytics provider Black Knight Inc. Below are a few highlights This Week in Real Estate from the third week of July that influence our business:

* Western States Lead Single-Family Residential Permits Growth. Over the first five months of 2018, the total number of single-family permits issued year-to-date (YTD) nationwide reached 363,327. On a year-over-year basis, this is an 8.0% increase over the May 2017 level of 336,410. The results from the SOC are similar, year-to-date single-family permits over the first five months of 2018 was, 363,700 which is 8.6% ahead of its level over the same period of 2017, 335,000. Year-to-date, across the country, single-family permits grew in all the regions except in the Northeast where it declined by 1.0% compared to May 2017 YTD. Western region had the highest growth in single-family while South recorded the highest multifamily permits growth during the last 12 months. The 8.0% increase in the nationwide growth rate of year-to-date single-family permits, is largely due to the aggregate increase in single-family permits across the Western states. Out of the 13 which are classified as Western states, nine states recorded single-family permit growth exceeding the national average. A total of 20 states recorded growth rates higher than the national average. Nine of these came from the Western region of the county, seven from the South, and three from the Midwest. Year-to-date, ending in May 2018, the total number of multifamily permits issued nationwide reached 187,605. This is 13.3% ahead of its level over the first five month of 2017, 165,645. The increase in nationwide growth rate is due to the increases across Southern and Western states which posted growth rates of 17.9% and 17.0% respectively.
Full Story…http://eyeonhousing.org/2018/07/western-states-lead-single-family-residential-permits-growth-northeast-lags/

* Builder Confidence Stays at Healthy Level in July. Builder confidence in the market for newly-built single-family homes remained unchanged at a solid 68 reading in July on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Builders are optimistic about housing market conditions, basing their confidence on continued solid demand for single-family homes. However, persistent increases in construction costs make it increasingly challenging to produce homes at competitive price points, especially for the entry-level market where inventory is most needed. The HMI index measuring current sales conditions remained unchanged at 74. Meanwhile, the component gauging expectations in the next six months dropped two points to 73 and the metric charting buyer traffic rose two points to 52. Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 57 while the Midwest remained unchanged at 65. The West and South each fell one point to 75 and 70, respectively.
Full Story…http://eyeonhousing.org/2018/07/builder-confidence-stays-at-healthy-level-in-july/

* Most Areas See Growth in Single-Family Starts. NAHB analysis of the Survey of Construction (SOC) shows that, nationally, there were 847,830 new single-family units started in 2017, 9% higher than the units started in 2016. Among all of the nine Census divisions, new single-family units started in the South Atlantic, West South Central and Mountain Divisions exceeded 100k in 2017. These three divisions represent 21 states, approximately 41% of the 50 states and Washington, D.C., but the number of new single-family housing starts in these three divisions accounted for about 60% of the total new single-family housing starts in 2017. In addition, there were 95,689 new single-family units started in the Pacific Division and 77,053 units started in the East North Central Division in 2017. The Pacific Division accounted for 11% of the total new single-family housing starts, while the East North Central Division accounted for 9%. The other four divisions, including East South Central, West North Central, Middle Atlantic and New England, accounted for the remaining 20% of the total new single-family housing starts. In addition, there were 95,689 new single-family units started in the Pacific Division and 77,053 units started in the East North Central Division in 2017. The Pacific Division accounted for 11% of the total new single-family housing starts, while the East North Central Division accounted for 9%. The other four divisions, including East South Central, West North Central, Middle Atlantic and New England, accounted for the remaining 20% of the total new single-family housing starts. According to NAHB analysis of the SOC data, national new single-family housing starts reached 63% of the pre-recession normal (the average of housing starts between 2000 and 2003) in 2017.
Full Story…http://eyeonhousing.org/2018/07/most-areas-see-growth-in-single-family-starts/

Have a productive week.

Jason

 


This Week in Real Estate: July 16, 2018

According to a report by data and analytics provider Black Knight Inc. This Week in Real Estate, tappable equity now totals $5.8 trillion nationwide, the highest volume ever recorded. Tappable equity is the share of equity that a borrower can borrow before reaching a maximum combined loan-to-value ratio of 80 percent. Below are a few highlights from the second week of July that influence our business:

* Tappable Equity Skyrockets, But HELOC Loans Decline. The tappable equity held by homeowners increased by $820 billion dollars over the 12 months that ended in March, $380 billion in the first quarter of 2018 alone. Those numbers equate to 16.5 percent growth year-over-year, and 7 percent for the quarter. Equity growth is generally highest in the first and second quarters of the year, but the first quarter growth this year was up 30 percent from the same quarter in 2017. It was the highest single-quarter increase recorded by Black Knight since it began keeping records in 2005. Tappable equity is the share of equity that a homeowner can borrow before reaching a maximum combined loan-to-value (CLTV) ratio of 80 percent.  That equity now totals $5.8 trillion nationwide, the highest volume ever recorded and 16 percent higher than at the mid-2006 peak. The majority – nearly 80 percent – of the tappable equity nationwide is held by borrowers with mortgage rates under the current prevailing rates of around 4.5 percent and 60 percent have rates under 4 percent. The average mortgage holder gained $14,700 in tappable equity over the past year and has $113,900 in total available equity to borrow against.
Full Story… http://www.mortgagenewsdaily.com/07112018_black_knight_mortgage_monitor.asp

* 362,275 U.S. Properties with Foreclosure Filings in First Six Months of 2018, Down 15% From a Year AgoAttom Data Solutions released Thursday its Midyear 2018 U.S. Foreclosure Market Report, which shows a total of 362,275 U.S. properties with foreclosure filings – default notices, scheduled auctions or bank repossessions – in the first six months of 2018, down 15 percent from the same period a year ago and down 78 percent from a peak of 1,654,634 in the first six months of 2010. Counter to the national trend, 26 of the 219 metropolitan statistical areas analyzed in the report (12 percent) posted a year-over-year increase in foreclosure activity in the first six months of 2018. A total of 188,843 U.S. properties had a foreclosure filing in Q2 2018, down 1 percent from the previous quarter and down 14 percent from a year ago. The second quarter of 2018 was the seventh consecutive quarter in which U.S. foreclosure activity was below the pre-recession average of 278,912 properties with foreclosure filings per quarter in 2006 and 2007.
Full Story… https://www.attomdata.com/news/market-trends/foreclosures/midyear-2018-u-s-foreclosure-market-report/

* Time Needed to Build a Single-Family Home in 2017. The 2017 Survey of Construction (SOC) from the Census Bureau shows that the average completion time of a single-family house is around 7.5 months, which usually includes almost a month from authorization to start and another 6.5 months to finish the construction. The average completion time in 2017 was the same as it was in 2016, but it was longer than the time needed in 2015 (7 months). The time from authorization to completion varies across the nation and depends on the geographic location, metropolitan status, and whether the house is built for sale or custom-built. According to the 2017 SOC, it takes anywhere from less than a month to 77 months to build a single-family home from obtaining a permit to completion. Among all the single-family houses completed in 2017, houses built for sale took the shortest time, 6.9 months from obtaining building permits to completion, while houses built by owners required the longest time, 12.3 months. Homes built by hired contractors normally needed around 9 months. A large proportion of single-family homes built for sale and custom homes built by contractors on owners’ land began construction within the same month after obtaining building authorizations. However, custom homes built by owners serving as general contractors had a one-month lag between obtaining permits and construction start in 2017. The average time from authorization to completion also varies across divisions. The division with the longest time was New England (10.4 months), followed by the Middle Atlantic (10.3 months), East South Central (9.4 months), East North Central (8.2 months) and Pacific (8.5 months) in 2017. The average waiting period from permit to construction start varies from the shortest time of 17 days in the Mountain division to the longest one of 39 days in Pacific.
Full Story… http://eyeonhousing.org/2018/07/time-needed-to-build-a-single-family-home-in-2017/

Have a productive week.

Jason


This Week in Real Estate: July 9, 2018

According to a release from CoreLogic This Week in Real Estate, home prices realized the biggest annual jump in four years in May. Below are a few highlights from the first week of July that influence our business:

* Home Prices Make The Biggest Jump in Four Years. Home prices jumped 7.1 percent annually in May, according to a new report from CoreLogic. That’s the biggest jump in four years. Annual price gains had been shrinking slightly, as mortgage rates rose, but apparently higher rates are not hurting demand. They are, however, exacerbating the already critical supply shortage. “During the first quarter, we found that about 50 percent of all existing homeowners had a mortgage rate of 3.75 percent or less,” said Frank Nothaft, chief economist for CoreLogic. “May’s mortgage rates averaged a seven-year high of 4.6 percent, with an increasing number of homeowners keeping the low-rate loans they currently have, rather than sell and buy another home that would carry a higher interest rate.” The median price of an existing home sold in May was $264,800, according to the National Association of Realtors. Of course, all real estate is local, and certain markets are hotter than others. Seattle, Denver, and San Francisco continue to see some of the biggest price gains, as they also have the leanest supply. The supply of homes for sale has been dropping on an annual basis for the past 36 months, according to the National Association of Realtors. Full Story… https://www.cnbc.com/2018/07/02/housing-is-getting-more-expensive-as-home-sellers-retreat.html

* American City Growth Rate Catching Up to SuburbiaFor the first time in decades, U.S. cities are catching up to the population growth of suburban America, according to the latest report from the Urban Land Institute. ULI discovered that between 2010-2015, denser urban locations grew significantly faster than residential neighborhoods, suggesting that new urban residents are demonstrating a preference for mixed-use environments. Urban residents now account for more than 29 million Americans, which is 17% of the total population in just 1% of the land area in the 50 largest metropolitan statistical areas, according to ULI. The report also attributes urban population growth to rental apartment development. In the years between 2010 and 2017, the rate of rental apartment inventory in urban places grew 32%, while inventory in the suburbs only grew 16%. Employment is also an indication of population growth, notably between 2005 and 2015, suburban areas accounted for 30% of existing jobs and 36% of new job growth. Economic centers, which are established urban employment cores, in downtown areas increased at a faster rate than the number of jobs in any other type of neighborhood during this time. Although urban population growth is catching up to suburbia, affordability is still hindering the growth of the urban market. The average monthly rent of a multifamily apartment in an urban area is $1,650, which exceeds the $1,275 suburban residents typically pay. Full Story… https://www.housingwire.com/articles/43846-american-city-growth-rate-catching-up-to-suburbia

* Cost Across Time. Even with the projection that interest rates will climb to 5.1% by this time next year, we are still well below historic numbers. The average interest rate and mortgage payment in the 1970s was 8.86% and $1,986, compared to the 1980s 12.7% and $2,707, the 1990s 8.12% and $1,855, the 2000s 6.29% and $1,546 and today 4.55% and $1,274. The impact your interest rate makes on your monthly mortgage cost is significant. Full Story… https://www.keepingcurrentmatters.com/2018/07/06/cost-across-time-infographic-4/

Have a productive week.

Jason

 


This Week in Real Estate: June 25, 2018

According to reports released by the Census Bureau, HUD and Ellie Mae, single-family starts are up 9.8% through the first five months of 2018 compared to the same time period in 2017 and purchase loans now represent the largest share of loans since the recessionBelow are a few highlights from the third week of June that influence our business:


* Housing Starts Reach Post-Recession High in May as Permits Soften.Total housing starts increased in May with gains in both the single-family and multifamily sectors. Starts increased 5% month-over-month to a 1.35 million seasonally adjusted annual rate, according to the joint data release from the Census Bureau and HUD. This pace is a post-recession high. The rate of single-family starts was 3.9% higher in May, reaching a 936,000 annual rate. Recent growth trends for single-family starts match ongoing healthy levels of the NAHB/Wells Fargo Housing Market Index, now registering a score of 68. However, builders continue to report concerns about ongoing labor access issues and dramatic price increases for softwood lumber. Recent price increases for lumber are adding about $9,000 in price per newly-built single-family home. On a year-to-date basis, single-family starts are 9.8% higher as of May relative to the first five months of 2017, performing better than our forecast. However, single-family permits, a useful indicator of future construction activity, declined 2.2% in May. With respect to housing’s economic impact, 54% of homes under construction in May were multifamily (612,000). The current count of apartments under construction is roughly unchanged over the last year. In May, there were 515,000 single-family units under construction, a gain of more than 12% from this time in 2017.


* Mortgage Application Volume Second Highest of the YearMortgage interest rates waffled, moving in different directions depending on the product last week, but the volume of mortgage applications increased rather decisively.  The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, surged by 5.1 percent during the week ended June 15. It was the largest increase in total mortgage volume since the week ended January 5, 2018. On an unadjusted basis the volume was up 3 percent. Applications for both refinancing and home purchases increased compared to the week ended June 8. The Refinance Index gained 6 percent and the refinancing share of applications grew from 35.6 percent to 36.8 percent.  The seasonally adjusted Purchase Index increased by 4.0 percent from one week earlier and the unadjusted Purchase Index by 1.0 percent.  The latter was up 3.0 percent from the same week one year ago.


* Ellie Mae: Purchase Loan Share at Post-Recession Highs. Loans for home purchasing continue to dominate mortgage originations and Ellie Mae says they may now represent the largest share of loans since the recession.  The company’s May Origination Insight Report put the purchasing share at 70 percent, the largest percentage at least since they started tracking the figure in 2011.  Purchase loans made up had 66 percent of closed conventional loans, 75 percent of VA loans, and 80 percent of those backed by FHA. The 30-year interest rate for loans closed during the month was also the highest in Ellie Mae’s history, up 5 basis points from April to 4.84 percent. The distribution of loans across loan types was unchanged for conventional and FHA loans at 66 percent and 28 percent respectively while VA loans upped its  share from 9 to 10 percent.  The percentage of originations that were adjustable rate mortgages (ARMs) stayed at 6.6 percent for the second month, the highest since June 2014. Closing time for all loans held steady across the board at 41 days for the third month.  Refinance loans took an average of 37 days and purchase loans 43 days. Overall FICO scores increased slightly for the fourth consecutive month to 724. LTV remained at 79 and front and back DTI’s averaged 26/39.

Have a productive week!

Jason

This Week in Real Estate: June 18, 2018

According to the Financial Accounts of the United States, published by the Board of Governors of the Federal Reserve System, the value of owners’ equity in real estate reached $15 trillion in the first quarter of 2018Below are a few highlights from the second week of June that influence our business:
* Homeowners’ Equity Reaches a New High. Over the first quarter of 2018, the value of owners’ equity in real estate expended and hit a new high on a nominal and not seasonally adjusted basis, according to the Financial Accounts of the United States for the first quarter of 2018. This data is published by the Board of Governors of the Federal Reserve System. On a nominal and not seasonally adjusted basis, households’ owner-occupied real estate increased to $25.1 trillion totally in the first quarter of 2018, $544 billion more than the fourth quarter of 2017 and $1,674 billion more than the first quarter of 2017. The value of owners’ equity in real estate, the difference between the value of owner-occupied real estate and home mortgage debt, rose by $1.4 trillion over the past four quarters and reached $15.0 trillion in the first quarter of 2018.

* These Are The 5 Issues Impacting Real Estate Right NowThe Counselors of Real Estate, an advisory organization that monitors real estate, released its latest report detailing the top 10 issues affecting the real estate industry. This year, the organization divided its annual list to focus on five issues currently impacting the industry and five issues to watch for potential long-term impact over the next three to seven years. Leading the list of current issues to watch is interest rates and the economy. While interest rates continue to climb, both the commercial and residential real estate markets are feeling changes. Leading the list of long-term issues impacting real estate is infrastructure – and what the organization says is a lack of effort by the U.S. to address deterioration. The five issues impacting real estate right now are: rising rates and the economy, politics and political uncertainty, housing affordability, generational change and demographics and e-commerce and logistics. The five issues to look out for in the future are: infrastructure, disruptive technology, natural disasters and climate change, immigration and energy and water.

* The Number of Days Homes Spend on the Market Hits Post-Recession Low. In yet another sign of the ultra-competitive housing market buyers now face, the time homes spend on the market has never been shorter since the recession began. List to sale time has dropped by more than 50% since 2010. The median list-to-sale time, which is the period of time between when a listing is officially posted and when the home is officially sold, was just 64 days, down from 77 a year ago, according to real-estate website Trulia. This figure has consistently dropped every year since 2010. The figure set this month now represents an all-time low, according to Trulia’s calculations. The fastest moving markets are all located in the West: The median period for Seattle, San Francisco and San Jose, Calif., is just 36 days.

This Week in Real Estate: June 11, 2018

According to CoreLogic’s Q1 2018 Home Equity Report that was released This Week in Real Estate, homeowners with mortgages saw their equity increase 13.3 percent year-over-year, representing a gain of more than $1 Trillion since the first quarter of 2017. Below are a few highlights from the first week of June that influence our business:

* Where Are Millenials Moving. Where are milliennials headed, at least in terms of places they are moving to. For the second year running, SmartAsset set about finding out. Washington received the largest influx of millennials both in terms of net influx and net influx relative to population. This state received nearly 40,000 more millennials than it lost, which is around 0.55% of the overall population. Seattle was the main beneficiary of these millennials, which we’ll discuss in the section below. Washington was not the only western state to crack this top 10: Colorado, Oregon, Nevada and Arizona are also in the top 10. Colorado and Oregon in particular were popular landing spots for millennials. Colorado received over 26,500 more millennials than it lost and for Oregon that number was just under 12,000. Nevada and Arizona had slightly less spectacular numbers, receiving 8,800 and 7,000 millennials, respectively. The South makes up the rest of the states in our top 10. The no. 2 ranking state is Texas, with a net influx of nearly 34,000 millennials, followed by Virginia which gained 18,300 more millennials than it lost. Georgia, North Carolina and Florida round out the top 10.

* Home Equity Gains Topped $1 Trillion in the First Quarter of 2018CoreLogic released Thursday the Home Equity Report for the first quarter of 2018, which shows that U.S. homeowners with mortgages (which account for roughly 63 percent of all properties) have seen their equity increase 13.3 percent year over year, representing a gain of $1.01 trillion since the first quarter of 2017. Additionally, the average homeowner gained $16,300 in home equity between the first quarter of 2017 and the first quarter of 2018. While home equity grew nationwide, western states experienced the largest increase. Washington homeowners gained an average of approximately $44,000 in home equity, and California homeowners gained an average of approximately $51,000 in home equity. “Home-price growth has accelerated in recent months, helping to build home-equity wealth and lift underwater homeowners back into positive equity the primary driver of home equity wealth creation,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The CoreLogic Home Price Index grew 6.7 percent during the year ending March 2018, the largest 12-month increase in four years. Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years. Washington led all states with 12.8 percent appreciation, and its homeowners also had much larger home-equity gains than the national average.”

* U.S. Home Flipping Rate Matches Six Year High in Q1 2018. ATTOM Data Solutions released Thursday its Q1 2018 U.S. Home Flipping Report, which shows that 48,457 U.S. single family homes and condos were flipped in the first quarter of 2018, down 4 percent from the previous quarter and down 3 percent from a year ago to a two-year low. The 48,457 homes flipped in the first quarter represented 6.9 percent of all home sales during the quarter, up from 5.9 percent in the previous quarter and unchanged from a year ago – matching the highest home flipping rate since Q1 2012. Homes flipped in Q1 2018 sold at an average gross profit of $69,500, up from an average gross flipping profit of $68,250 in the previous quarter and up from $66,287 in Q1 2017 to the highest average gross flipping profit since ATTOM began tracking in Q1 2000. The average gross flipping profit of $69,500 in Q1 2018 translated into an average 47.8 percent return on investment compared to the original acquisition price, down from a 48.9 percent average gross flipping ROI in Q4 2017 and down from an average gross flipping ROI of 50.3 percent in Q1 2017 to the lowest level since Q2 2015 – a nearly three-year low.

This Week in Real Estate: June 4, 2018

According to the most recent report from the Census Bureau, which was released This Week in Real Estate, the dollar value of new construction spending is 7.6% higher than the same time period last year at $1.31 trillion. Below are a few highlights from the last week of May that influence our business:

* ShowingTime: High Consumer Demand Continues to Propel Showing Activity to Near-Record Levels. Showing activity across the U.S. increased 4.6 percent year-over-year in April, according to the ShowingTime Showing Index, as buyer demand continues to rise throughout most of the country. The South region experienced the highest regional year-over-year increase for the second consecutive month, jumping 9.3 percent, while the Northeast (4.9 percent) and Midwest (4 percent) regions also saw a rise in showing activity. Activity in the West region dropped 8.3 percent compared to April 2017, marking the region’s third consecutive year-over-year monthly decrease. ShowingTime Chief Analytics Officer Daniil Cherkasskiy says the near-record level of showing activity across the country indicates high consumer demand remains despite rising home prices. “Overall, we continue to see record levels of activity across the U.S.,” says Cherkasskiy. “Showing activity only declined in the West region, while other regions throughout the country have consistently experienced increased demand.”

* Residential and Private Construction Numbers Solid in AprilApril turned out to be a solid month for construction. The Census Bureau said that dollar value of new construction activity on residential, non-residential, and public projects was at a seasonally adjusted and annual total of $1.31 trillion. This represented a 1.8 percent increase from March’s total of 1.29 trillion and was 7.6 percent higher than the $1.22 trillion rate in April 2017. Privately funded construction was at a seasonally adjusted annual rate of $1.01 trillion, a 2.8 percent gain from March, and up 7.6 percent from the previous April. Through the end of April private construction totaled $305.27 billion, a 6.3 percent increase. Residential spending is the largest component of private construction. Spending there was up 4.5 percent from March to a seasonally adjusted annual rate of $556.30 billion, 9.5 percent higher than spending in April 2017. Single-family construction was at a rate of $285.70 billion, unchanged from March but up 9.6 percent year-over-year.  Multifamily construction spending rose 3.6 percent for the month but was 4.0 lower than a year earlier. Public construction spending slowed by 1.3 percent from March at $296.12 billion but was 7.7 percent higher year-over-year. The residential component was down 0.2 percent to an annual rate of $7.14 billion but is 26.4 percent greater than last year. That spending is also 7.5 percent higher across the first four months of 2018.

* Homeowners Who Remodel Will Spend an Estimated $7,893 Per Home in 2018. In the average zip code, owners who improve their homes in 2018 will spend $7,893 per home; but, as you would expect in a country as large as the U.S., there is considerable variation. There are many zip code areas where spending per improved home is under $5,5000, and many where it is over $11,000.  Zip codes with high spending per improved home tend to cluster around large metro areas—especially in the Northeast. At the very top are 17 zip codes where estimated spending per improved home is over $18,000.  Ten of these are in the New York-Newark-Jersey City Metropolitan Statistical Area, two are in Fairfield County, Connecticut; and one is in a suburb of Boston.  Of the remaining four, two are zip codes on Lake Michigan in Cook County north of Chicago, and two are close-in suburbs of San Francisco.

This Week in Real Estate: May 29, 2018

The National Association of Realtors 2018 midyear forecast was released This Week in Real Estate, predicting a moderate and multi-year increase in home sales despite some headwinds. Below are a few highlights from the fourth week of May that influence our business:

* Home Sales, Prices to Rise Despite Inventory, Affordability Challenges. A stronger economy, wage growth and an improving job market are expected to march home sales and prices higher in 2018, but low supply and weakening affordability will tamper the rate of increases, according to speakers at a residential real estate forum during the 2018 Realtors Legislative Meetings & Trade Expo. Lawrence Yun, chief economist of the National Association of Realtors®, presented his 2018 midyear forecast and said despite headwinds a moderate and multiyear increase in home sales is likely ahead. After accelerating 3.8 percent in 2016, existing home sales rose only 1.1 percent to 5.5 million in 2017 and are forecast to finish 2018 at a pace of around 5.6 million (up 1.8 percent). He projects 5.7 million sales for 2019. Home price growth, up 48 percent from 2011 to 2017 and likely to rise an additional 4 percent in 2018.

* Who Is Tomorrow’s Borrower? What We’re Learning Might Surprise YouThe borrower of the future is affected, and in many ways shaped, by current and emerging demographic and generational trends. For example: The digital age has allowed for work to be done from anywhere. And more Americans today work two or three different jobs, versus being full-time, salaried employees. By the year 2020, it’s estimated that 43% of all workers will be freelancers, either by choice or because of new business models. With more millennials now living with their parents than with a spouse, they represent a reservoir of pent-up demand for housing. And although some boomers are downsizing for economic reasons or moving to be closer to family, many are choosing to “age in place.” America is on track to become a “majority-minority” country. This demographic shift will result in Hispanic Americans making up 50% of first-time homebuyers by 2020. And multi-generational household trends are increasing, with children, parents and grandparents living under one roof.

* Single-Family Home Size Increases at the Start of 2018. Counter to the recent prevailing trend, new single-family home size increased at start of 2018. New home size had been falling over the last two years due to an incremental move to additional entry-level home construction. According to first quarter 2018 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area increased to 2,436 square feet. Average (mean) square footage for new single-family homes increased to 2,641 square feet. Since cycle lows (and on a one-year moving average basis), the average size of new single-family homes is 10% higher at 2,602 square feet, while the median size is 14% higher at 2,392 square feet. The post-recession increase in single-family home size is consistent with the historical pattern coming out of recessions. Typical new home size falls prior to and during a recession as home buyers tighten budgets, and then sizes rise as high-end homebuyers, who face fewer credit constraints, return to the housing market in relatively greater proportions.

This Week in Real Estate: May 29, 2018

The National Association of Realtors 2018 midyear forecast was released This Week in Real Estate, predicting a moderate and multi-year increase in home sales despite some headwinds. Below are a few highlights from the fourth week of May that influence our business:

* Home Sales, Prices to Rise Despite Inventory, Affordability Challenges. A stronger economy, wage growth and an improving job market are expected to march home sales and prices higher in 2018, but low supply and weakening affordability will tamper the rate of increases, according to speakers at a residential real estate forum during the 2018 Realtors Legislative Meetings & Trade Expo. Lawrence Yun, chief economist of the National Association of Realtors®, presented his 2018 midyear forecast and said despite headwinds a moderate and multiyear increase in home sales is likely ahead. After accelerating 3.8 percent in 2016, existing home sales rose only 1.1 percent to 5.5 million in 2017 and are forecast to finish 2018 at a pace of around 5.6 million (up 1.8 percent). He projects 5.7 million sales for 2019. Home price growth, up 48 percent from 2011 to 2017 and likely to rise an additional 4 percent in 2018.

* Who Is Tomorrow’s Borrower? What We’re Learning Might Surprise YouThe borrower of the future is affected, and in many ways shaped, by current and emerging demographic and generational trends. For example: The digital age has allowed for work to be done from anywhere. And more Americans today work two or three different jobs, versus being full-time, salaried employees. By the year 2020, it’s estimated that 43% of all workers will be freelancers, either by choice or because of new business models. With more millennials now living with their parents than with a spouse, they represent a reservoir of pent-up demand for housing. And although some boomers are downsizing for economic reasons or moving to be closer to family, many are choosing to “age in place.” America is on track to become a “majority-minority” country. This demographic shift will result in Hispanic Americans making up 50% of first-time homebuyers by 2020. And multi-generational household trends are increasing, with children, parents and grandparents living under one roof.

* Single-Family Home Size Increases at the Start of 2018. Counter to the recent prevailing trend, new single-family home size increased at start of 2018. New home size had been falling over the last two years due to an incremental move to additional entry-level home construction. According to first quarter 2018 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area increased to 2,436 square feet. Average (mean) square footage for new single-family homes increased to 2,641 square feet. Since cycle lows (and on a one-year moving average basis), the average size of new single-family homes is 10% higher at 2,602 square feet, while the median size is 14% higher at 2,392 square feet. The post-recession increase in single-family home size is consistent with the historical pattern coming out of recessions. Typical new home size falls prior to and during a recession as home buyers tighten budgets, and then sizes rise as high-end homebuyers, who face fewer credit constraints, return to the housing market in relatively greater proportions.

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