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Rising prices and bad weather hit home sales in the US in February say agents
Home prices in the US continued to show solid growth in most of the country due to limited inventory conditions, but rising prices and severe winter weather caused existing home sales to slip in February. According to the latest existing home sales index report from the National Association of Realtors, completed transactions fell 0.4% to a seasonally adjusted annual rate of 4.60 million in February from 4.62 million in January. Sales were 7.1% below the 4.95 million unit level recorded in February 2013 and the month’s pace of sales was the lowest since July 2012, when it stood at 4.59 million. ‘We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favourable than a year ago,’ said Lawrence Yun, NAR chief economist. ‘Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year,’ he added. The median existing home price for all housing types in February was $189,000, which is 9.1% above February 2013. ‘Price gains have translated into an additional $4 trillion of housing wealth recovery over the past three years,’ Yun explained. The NAR data also shows that distressed homes sales, that is foreclosures and short sales, accounted for 16% of February sales, compared with 15% in January and 25% on February 2013. Some 11% of February sales were foreclosures and 5% were short sales. Foreclosures sold for an average discount of 16% below market value in February, while short sales were discounted 11%. Total housing inventory at the end of February rose 6.4% to two million homes available for sale, which represents a 5.2 month supply at the current sales pace, up from 4.9 months in January. Unsold inventory is 5.3% above a year ago, when there was a 4.6 month supply. The median time on market for all homes was 62 days in February, down from 67 days in January and 74 days on market in February 2013. Short sales were on the market for a median of 94 days in February, while foreclosures typically sold in 60 days and non-distressed homes took 61 days. Some 34% of homes sold in February were on the market for less than a month. First time buyers accounted for 28% of purchases in February, up from 26% in January, but down from 30% in February 2013. NAR president Steve Brown believes that student debt appears to be a factor in the weak level of first time buyers. ‘The biggest problems for first time buyers are tight credit and limited inventory in the lower price ranges. However, 20% of buyers under the age of 33, the prime group of first time buyers, delayed their purchase because of outstanding debt,’ he said. ‘In our recent consumer survey, some 56% of younger buyers who took longer to save for a down payment… Continue reading
Rents in England and Wales rise for first time since October
Rents across England and Wales increased by 1.6% in the 12 months to February, the first month on month rise since October 2013, taking the average rent to £743 a month. Overall seven in 10 regions saw higher rents in February than January when the rate of increase was 1.4%, according to the latest Buy to Let Index from LSL Property Services. The firm, which owns the UK’s largest lettings agents network including Your Move and Reed Rains, also pointed out that February was the second best month on record for tenant finances as proportion of late rent falls to 6.9%. Landlords have earned an average annual return of 9.7%, or over £16,000, over the last 12 months. ‘Property to rent remains in high demand. Despite great improvements in the prospects of many first time buyers, there are still millions of households who rely on a healthy private rented sector for their homes,’ said David Newnes, director of LSL Property Services. ‘February’s annual increase remains below the rate of wider inflation. However, this latest uptick and the high level of demand in the lettings market emphasise the importance of ongoing investment. Landlords have invested heavily in expanding their portfolios and need to continue to do so to keep pace with demand from tenants,’ he added. The sharpest monthly rises were seen in Yorkshire and the Humber and the West Midlands, where in both regions rents rose by 1.2% on a monthly basis. The next fastest monthly rise was in Wales with a 1% increase, while the East Midlands saw rents rise 0.6% between January and February. Of the three regions to see a monthly fall in rents, the fastest drop was in the South East, down by 1.5% since January. Meanwhile rents fell by 0.6% on a monthly basis in the East of England, and by 0.1% in the North West. A majority of regions also saw higher rents on an annual basis. The South West saw the quickest rise, up 4.7% from February 2013. This was followed by 3.3% in London and annual rent increase of 2.2% in the North West. By contrast, rents in the East of England now average 3.1% less than a year ago, followed by a 2.3% annual drop for Wales and a 1.9% annual fall in the West Midlands. ‘Across the UK there has always been a huge level of variation between different local markets. But in the last year some of these differences have become more apparent as the property market has witnessed such a rapid shake up and improvement,’ explained Newnes. ‘Those looking to rent, or to let a property should look into the intricacies of their local market, which can have at least as much bearing on the level of rent as the property itself,’ he pointed out. The index also shows that gross yields on a typical rental property remained steady on a monthly basis, standing at 5.2% in February, the same as in January 2014. However, yields have fallen… Continue reading
Lending for homes in UK up 43% compared to a year ago, latest figures show
Gross mortgage lending in the UK was £15.2 billion in February, down some 6% compared with January but still 43% higher than the £10.6 billion lent in February last year, the latest data from the Council of Mortgage Lenders shows. The CML also pointed out that it is the highest total for a February since 2008. CML chief economist Bob Pannell said that housing market indicators have continued to be strong over recent months, once seasonal factors have been taken into account. ‘First time buyers have benefitted most from the government’s Help to Buy initiatives, with the more recent mortgage guarantee scheme now starting to push typical loan to value levels higher,’ he explained. ‘The housing market got a further boost from this week’s Budget. This, together with benign developments in the economy more widely, should bolster short term sentiment and activity,’ he added. Experts believe that more new homes are needed to help the property market continue its recovery as lack of supply is holding it back. Duncan Kreeger, director of West One Loans, a privately funded short term lender, comments, believes that the market can only go so far without a sustainable supply of new homes. ‘While mortgages might be catching up with pre-recession levels, house building in the UK still falls considerably below these peaks,’ he said but added that building may have got a boost in yesterday’s Budget. ‘However, there are still many questions left unanswered. Some 200,000 new homes looks good on paper but we still don’t know where these will be placed. It’s all very well to build a garden city in Ebbsfleet, but if demand is greatest in urban areas, it’s unclear how this will help,’ he explained. ‘The hard truth is that to really increase the supply of homes where they are most needed requires complex property conversions and refurbishments and it’s still almost impossible to get mainstream funding for these types of projects,’ he added. According to Ian McGrail, managing director, FirstMortgage, the data supports the level of growth that his firm as seen at a company level year on year, as demand for mortgages from first time buyers and home movers remains consistently strong. ‘The results, showing the highest total for a February since 2008, pair well with our in house monthly figures, where similarly we have seen record levels of production. This growth looks set to continue steadily into the year, although we would expect activity to slow down temporarily at the end of April when the Mortgage Market Review comes into effect, as lenders get to grips with the reality of the reforms imposed,’ he added. However, Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), warned that growth could slow this year partly because regulatory changes on 26 April will act as a temporary buffer and also because the bar was significantly raised in the second half of last year. 'But the recovery is well underway and should continue to… Continue reading
