This Week in Real Estate: October 30, 2017

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While the Pending Home Sales Index is at it’s lowest level since January 2015, data released by HUD and the Census Bureau This Week in Real Estate revealed a significant jump in new home sales in September. Year-to-date through September new home sales is running 8.6% higher than the same time a year ago. Below are a few highlights from the fourth week of October that influence our business:

* Jump for New Home Sales in September. Contracts for new home sales expanded by 18.9% in September to a 667,000 seasonally adjusted annual rate, according to estimates from the joint data release of HUD and the Census Bureau. The solid reading in September returns new home sales to the positive growth trend it has been on for several years. This expansion is supported by ongoing job growth and improving household formations, as well as tight existing home inventory. September marks the fifth month in 2017 at an annual sales pace of more than 600,000. New home sales through September are running 8.6% higher than this time in 2016. Regionally, there was sales growth in all regions. On a year-to-date basis, new home sales are up 28% in the Northeast, up 12% in the West, 6% higher in the South, and up 4% in the Midwest compared to this time in 2016. Full Story… http://eyeonhousing.org/2017/10/jump-for-new-home-sales-in-september/

* Pending Home Sales Flatten in September. The Pending Home Sales Index, unchanged in September, has fallen on an annual basis in five of the past six months, and is at its lowest level since January 2015. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), remained unchanged at 106.0 from a downwardly revised August level. The PHSI is now 3.5% below its level a year ago. The PHSI increased 1.9% in the West, 1.4% in the Midwest and 1.2% in the Northeast, but fell 2.3% in the South. Year-over-year, the PHSI decreased in all four regions, ranging from 2.4% in the Northeast to 5.0% in the South (2.9% in the West). Full Story… https://www.nar.realtor/newsroom/pending-home-sales-flatten-in-september

* Cash Sales Retreat as a Share of New Home Purchases. NAHB analysis of the most recent Quarterly Sales by Price and Financing published by the Census Bureau reveals that cash sales accounted for just 4.8% of the total, down from 6.5% in the second quarter. The share of new home sales financed with conventional mortgages rose to 72.8%, the highest share since the third quarter of 2016.

FHA-loans financed 14.3% of new home sales during the third quarter of 2017. Census data and NAHB calculations show that new home sales backed by VA products fell to 11,000 (-4,000) in the third quarter of 2017, and market share declined from 8.8% to 7.5%. Although cash sales make up a small portion of new home sales, they constitute a larger share of existing home sales. Roughly 20% of existing home transactions were all-cash sales in September, according to estimates from the National Association of Realtors.
Full Story… http://eyeonhousing.org/2017/10/cash-sales-retreat-as-a-share-of-new-home-purchases/

Have a productive week!

Jason

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