In three articles, all on Economy Watch at nbcnews.com, this week we’re finding that there are drops in the number of home sales, but prices are still inching upward. Here are the summaries of the three articles:
New home sales drop, but prices tick higher...
The number of new single family homes sold dropped in December. However, the median home sales price rose during that period. The new home sector still seems to be a bright spot in the real estate recovery.
This past week the Commerce Department said that sales dropped 7.3 percent in December of 2012 to a seasonally adjusted 369,000 unit annual rate. This was below the analysts’ forecasts of 385,000 annual units. However, don’t hang your future on any number from the government, as they’re often heavily revised later. November’s numbers were revised upward by almost 6% later. This brought November’s numbers to the fastest pace since April of 2010.
The median price for a new home rose to $248,900 in December from $245,600 in November. Economists think that home building added to economic growth last year for the first time since 2005. The latest report showed 367,000 new homes were sold last year, the most since 2009. Unfortunately, that’s still around a third of the number sold in 2005.
Home prices gain for 10th month in a row...
According to the S&P Case-Shiller Home Price Composite Index, home prices rose nationally by 0.6% in November on a seasonally adjusted basis. This was in line with forecasts. This Index measures home sales prices in 20 metropolitan areas.
Prices in the 20 cities rose 5.5% year over year. This is the 10th month in a row showing home price increases in the composite index. If prices are looked at unadjusted, they fell by 0.1 percent, falling in about half of the cities tracked. Winter is typically a weak period for housing nationally. Prices continue to rise in part due to a tightening of inventory of resale homes.
Many would-be home sellers are postponing that decision for various reasons related to the economy and their ability to purchase another home with current tough mortgage standards. Those who had significant equity prior to 2007 are probably waiting to recoup some of what they lost from then until now.
Pending home sales fall due to dwindling supply...
According to the National Association of Realtors (NAR), signed contracts to buy existing homes fell by 4.3 percent in December from the previous month. They had previously predicted a 1% gain in prices during December. The current monthly index published by NAR shows a 6.9 percent gain in December year-over-year. Part of the problem is low inventory, as NAR states that there is a lot of buyer foot traffic.
Most of last year’s gains were due to foreclosure purchases by investors. A huge influx of cash last year came from investors and investor groups and institutions taking advantage of the low prices and high rents to buy up inventory for long term rental property investment. This demand even created bidding wars in some of the most distressed areas as investors competed over a shrinking inventory.
Analysts point out that these sometimes double-digit gains are not an indicator of an overall market recovery. That won’t be evident until retail buyers again come back into the market in higher numbers.
In three articles, all on Economy Watch at nbcnews.com, this week we’re finding that there are drops in the number of home sales, but prices are still inching upward. Here are the summaries of the three articles:
New home sales drop, but prices tick higher...
The number of new single family homes sold dropped in December. However, the median home sales price rose during that period. The new home sector still seems to be a bright spot in the real estate recovery.
This past week the Commerce Department said that sales dropped 7.3 percent in December of 2012 to a seasonally adjusted 369,000 unit annual rate. This was below the analysts’ forecasts of 385,000 annual units. However, don’t hang your future on any number from the government, as they’re often heavily revised later. November’s numbers were revised upward by almost 6% later. This brought November’s numbers to the fastest pace since April of 2010.
The median price for a new home rose to $248,900 in December from $245,600 in November. Economists think that home building added to economic growth last year for the first time since 2005. The latest report showed 367,000 new homes were sold last year, the most since 2009. Unfortunately, that’s still around a third of the number sold in 2005.
Home prices gain for 10th month in a row...
According to the S&P Case-Shiller Home Price Composite Index, home prices rose nationally by 0.6% in November on a seasonally adjusted basis. This was in line with forecasts. This Index measures home sales prices in 20 metropolitan areas.
Prices in the 20 cities rose 5.5% year over year. This is the 10th month in a row showing home price increases in the composite index. If prices are looked at unadjusted, they fell by 0.1 percent, falling in about half of the cities tracked. Winter is typically a weak period for housing nationally. Prices continue to rise in part due to a tightening of inventory of resale homes.
Many would-be home sellers are postponing that decision for various reasons related to the economy and their ability to purchase another home with current tough mortgage standards. Those who had significant equity prior to 2007 are probably waiting to recoup some of what they lost from then until now.
Pending home sales fall due to dwindling supply...
According to the National Association of Realtors (NAR), signed contracts to buy existing homes fell by 4.3 percent in December from the previous month. They had previously predicted a 1% gain in prices during December. The current monthly index published by NAR shows a 6.9 percent gain in December year-over-year. Part of the problem is low inventory, as NAR states that there is a lot of buyer foot traffic.
Most of last year’s gains were due to foreclosure purchases by investors. A huge influx of cash last year came from investors and investor groups and institutions taking advantage of the low prices and high rents to buy up inventory for long term rental property investment. This demand even created bidding wars in some of the most distressed areas as investors competed over a shrinking inventory.
Analysts point out that these sometimes double-digit gains are not an indicator of an overall market recovery. That won’t be evident until retail buyers again come back into the market in higher numbers.