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Existing home sales in US above year ago levels for first time in 12 months
Existing home sales rose in the US increased in October for the second straight month and are now above year on year levels for the first time in a year, according to the latest report from the National Association of Realtors. Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 1.5% to a seasonally adjusted annual rate of 5.26 million in October from an upwardly revised 5.18 million in September. Sales are at their highest annual pace since September 2013 when they were also 5.26 million and are now above year on year levels for the first time since last October. Lawrence Yun, NAR chief economist, said that the housing market this year has been a tale of two halves. ‘Sales activity in October reached its highest annual pace of the year as buyers continued to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,’ he explained. ‘Furthermore, the job market has shown continued strength in the past six months. This bodes well for solid demand to close out the year and the likelihood of additional months of year on year sales increases,’ he added. The data also shows that the median existing home price for all housing types in October was $208,300, which is 5.5% above October 2013 and the 32ndconsecutive month of year on year price gains. Total housing inventory at the end of October fell 2.6% to 2.22 million existing homes available for sale, which represents a 5.1 month supply at the current sales pace, the lowest since March. Unsold inventory is now 5.2% higher than a year ago, when there were 2.11 million existing homes available for sale. ‘The growth in housing supply this year will likely prevent the drastic sales slowdown and coinciding spike in home prices we saw last winter due to low inventory. However, more housing starts are needed to increase supply, meet current demand and keep price growth in check,’ said Yun. All cash sales were 27% of transactions in October, up from 24% in September but down from 31% in October of last year. Individual investors, who account for many cash sales, purchased 15% of homes in October, up from 14% from the previous month but below October 2013 when it was 19%. Some 65% of investors paid cash in October. The percent share of first time buyers in October remained at 29% for the fourth consecutive month. First time buyers have represented less than 30% of all buyers in 18 of the past 19 months. A separate NAR survey has found that the annual share of first time buyers fell to its lowest level in nearly three decades. Distressed sales were in the single digits for the third month this year, decreasing to 9% in October from 10% in September and 14% a year ago. Some 7% of October sales were foreclosures and 2% were short… Continue reading
Value of UK housing up 57% in last decade, new research shows
The current value of the UK's private housing stock is estimated at £5.06 trillion, up from £3.22 trillion in 2004, a rise of 57% over the past decade. New research from the Halifax says that the increase of £1.83 trillion is equivalent to £79,262 per household in the owner occupied and private rented sectors since 2004. It means that the increase in the value of the UK private residential housing stock has outstripped rises in consumer prices, with the retail price index up by 37% in the past decade. The data also shows that in the past year, the value of the UK's private housing stock has grown 14% or £630 billion, the fastest annual growth since 2002 when it was 21%. Regionally, over the last 12 months the value of housing stock in London is estimated to have grown by £217 billion and by £123 billion in the South East with the two regions accounting for more than half of the total growth of the value of housing stock across the UK. An increase in average property values combined with a rise in the number of private new build homes coming on to the market have been the main contributing drivers. The value of the housing stock has grown in all 12 UK regions over the past year, and all regions have also seen a significant increase in the value of their private housing stock during the last 10 years. The largest increase was in London where the value of housing stock has more than doubled at 109% from £545 billion in 2004 to £1.14 trillion in 2014. The capital is closely followed by Scotland, which has seen a rise of 96% from £170 billion to £333 billion. However, there have been much smaller increases elsewhere with the smallest rises in the West Midlands at 32% and the North East at 33%. The research also found that the value of mortgage debt has risen by 47% since 2004 from £877 billion to £1.29 trillion, but at the same time the value of the private housing stock has grown by more than four times as much as outstanding mortgage debt. As such, housing equity has increased by £1.42 trillion or 61% over the decade from £2.34 trillion in 2002 to £3.76 trillion. Regionally, there is a wide variation in the level of housing equity, with a higher balance in the south compared to northern areas. On average, the highest amounts of equity are in London where housing equity is estimated at £820 billion, which is equivalent to £313,466 per household. The capital is followed by the South East at £726 billion or £219,163 per household, and the East at £447 billion or £203,462 per household. Outside southern England, the highest average equity levels are in Scotland at £249 billion or £126,930 per household, the North West with £278 billion or £106,011 per household and the West Midlands at £248 billion or £125,532 per household. The lowest housing equity is… Continue reading
House price recovery spreads out in UK, but growth is slowing, says Hometrack index
The top 20 cities in the UK are all registering annual house price growth of 5% or more for the first time in a decade, according to a new index. It is a sign that the housing recovery is spreading, however upward price momentum is slowing, Hometrack’s UK Cities House Price Index shows. It also points out that the annual house price growth is more than three times the current growth in average UK earnings which is 1.3% and explains that pent up demand has fed back into the market supported by low mortgage rates and a pick up in the economy. However, there is clear evidence that the upward pressure on house price is starting to slow on weaker demand for housing. In the last three months, average UK house prices have grown by 0.6% per month compared to 1.1% in the three months to May 2014. The majority of cities are now starting to show signs of a deceleration in the underlying rate of growth but cities with the lowest growth in Spring 2014 such as Glasgow, Edinburgh and Newcastle, have recorded an acceleration as house prices rise off a low base. This latest analysis shows that 11 cities have an average house price below that of the UK with Liverpool and Glasgow house prices 41% lower than the UK average. However, London bucks the trend with an average house price of more than double that of the UK at 117%, illustrating how the capital dominates the rest of the country and is distorting the national picture. The Cities Index also showed a post-referendum bounce in house prices in Edinburgh and Glasgow as confidence improves with average prices up 4.1% and 2.2% respectively in the last quarter. However the market in Aberdeen was down 2% in last quarter and the report says it is being impacted by a weak oil price with house prices declining off a high base. Oxford and Cambridge have seen average prices come off the boil quite sharply in the last three months with a fall of 1.2% and 2.3% respectively, with house prices starting to fall back after very strong gains of 42% and 52% in the last four years. The firm says that these smaller cities are seeing pricing levels respond more quickly to weaker demand. ‘The pick-up in house prices that started two years ago has spread across all UK cities with growth ranging from 5.5% in Liverpool and Glasgow to 18% in London. This latest analysis shows that momentum in house price increases is starting to slow with less pent up demand for housing than two years ago,’ said Richard Donnell, research director at Hometrack. ‘Whilst mortgage rates remain low, new mortgage affordability tests and loan to income caps are impacting on the ability of marginal buyers to access the market, especially in the higher value markets such as London. On top of this, concerns over… Continue reading
