Tag Archives: crisis
Existing home sales in the US bounced back in December, latest index shows
Existing home sales in the United States bounced back in December and climbed above an annual pace of five million sales for the sixth time in seven months, according to the latest index figures. Meanwhile, median home prices for 2014 rose to $208,500, their highest level since 2007 and 5.8% higher than 2013, the data from the National Association of Realtors shows. Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 2.4%. Compared to December 2013 sales were up 3.5% and are now above year-over-year levels for the third straight month. Lawrence Yun, NAR chief economist, says sales picked up in December to close a 2014 that got off to a sluggish start but showed encouraging signs of activity the second half of the year. ‘Home sales improved over the summer once inventory increased, prices moderated and economic growth accelerated. Sales were measurably better in the second half, up 8% compared to the first six months of the year,’ he added. Total housing inventory at the end of December dropped 11.1% to 1.85 million existing homes available for sale, which represents a 4.4 month supply at the current sales pace, down from 5.1 months in November. Unsold inventory is now 0.5% lower than a year ago when it was 1.86 million. ‘A drop in housing supply in December raises some affordability concerns in the months ahead as minimal selection and the potential for faster price appreciation could offset the demand from buyers encouraged by a stronger economy and sub 4% interest rates,’ explained Yun. ‘Housing costs, both rents and home prices, continue to outpace wages and are burdensome for potential buyers trying to save for a down payment while looking for available homes in their price range,’ he pointed out. The data also shows that the share of first time buyers was 29% percent in December, down from 31% in November but up from a year ago when it was 27%. First time buyers in 2014 represented an average of 29% for the second straight year. All cash sales were 26% of transactions in December, up from 25% in November and 32% in December 2013. Individual investors, who account for many cash sales, purchased 17% of homes in December, up 2% from the previous month but down 4% from December 2013. Some 63% of investors paid cash in December 2014. Distressed sales, foreclosures and short sales were up slightly in December at 11% compared with 9% in November but were down from 14% in December 2013. Some 8% were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 15% below market value in December compared with 17% in November, while short sales were discounted 12% compared to 13% in November. Properties typically stayed on the market the same amount of time in December at 66 days as November but for a slightly… Continue reading
UK buyers less concerned about interest rates, survey suggests
The drop in inflation in the UK to 0.5% in December 2014 has corresponded with a steep drop in the proportion of consumers viewing interest rates as one of the main barriers to buying a property, it is claimed. According to the latest Halifax Housing Market Confidence Tracker index over the last 12 months, the proportion of consumers citing concern about rises in interest rates as a barrier to buying property rise steadily from 14% in the fourth quarter of 2013 to 19% in the third quarter of 2014, the highest since the Tracker began at 22%. However, this fell back to 13% in the fourth quarter of 2014, the lowest level in over a year, at the same time as inflation began to fall sharply in the last few months of the year. ‘Speculation over a potential rate rise was high on the news agenda at certain times in 2014 and the Housing Market Confidence Tracker showed consumers becoming increasingly anxious about interest rate rises,’ said Martin Ellis, housing economist at the Halifax. ‘But with inflation falling sharply in the last few months it’s taken away some of risk of an imminent rise and worries have fallen accordingly. While a rate rise will happen eventually, lenders take this into account as part of our affordability checks in the mortgage application process. Going forward the key factor in how they adjust to any changes in rates will be the way in which borrowers manage their disposable income,’ he explained. It is not only interest rates that consumers perceive as being a barrier to buying a property. The largest single barrier is perceived to be the ability to raise a deposit, cited by 61% in the fourth quarter of 2014. However, in the last few years there have been a number of schemes launched specifically aimed at supporting borrowers with smaller deposits such as the Help to Buy scheme, which has loaned buyers deposits and guaranteed loans. ‘Mortgage affordability has improved significantly in recent years with record low mortgage rates a major contributor behind this improvement. Figures from the 2014 Halifax First Time Buyer annual review show that the number of first time buyers is at its highest level since 2007 and last year the number of first-time buyers increased by 22%. This was the third successive annual increase with a 50% rise in the past two years,’ Ellis pointed out. Continue reading
Gross mortgage lending in UK stalled in December, latest CML figures show
Gross mortgage lending in the UK reached £16.5 billion in December, unchanged month on month compared to November but down 1% compared to December 2013, the latest data shows. The figures from the Council of Mortgage Lenders also shows that the gross lending estimate for the fourth quarter of 2014 is £51.6 billion, down 8% on quarter three but up 1% on the fourth quarter of 2013. Overall, for 2014 the gross lending estimate is £205.6 billion, up 17% on 2013's £176 billion gross lending figure. ‘Housing market activity has been cooling and house price growth slowing in recent months, but 2014 was still the strongest year for mortgage lending since 2008,’ said CML chief economist Bob Pannell. ‘First time buyers were a key driver, helped by government initiatives such as Help to Buy. As a result, the number of first time buyers topped the 300,000 mark. While a far cry from the half million that we might regard as normal, this was the highest number of first time buyers since 2007,’ he pointed out. ‘Although lending remained muted in December, the previous monthly pace of decline in approvals appeared to moderate. So, alongside the big picture of a softer market, we are beginning to detect signs that underlying market conditions may be stabilising,’ he added. Adrian Gill, director of Your Move and Reeds Rains estate agents, said that while many places across the country have witnessed a recent lull in house price growth, the underlying sentiment in the market remains strong. ‘It will continue to carry the housing recovery further forwards, with unprecedented fundamentals for growth this year and 2014 will stand out as the best year for new buyers since the recession,’ he explained. ‘Towards the latter end of the year, demand was slightly spooked by the introduction of loan to income caps, but stamp duty reform provided some new comfort for prospective buyers. Along with the continued support of the Help to Buy scheme, aspiring home owners can more easily stomach the upfront costs of buying a home and save up for the necessary deposit,’ he added. Continue reading
