According to the National Association of Realtors This Week in Real Estate the annualized pace of existing home sales through August reached a 14-year high while homeowners equity exceeded $620 billion in the second quarter, as reported by CoreLogic. Below are a few newsworthy events from the fourth week of September that influence our business:
Sales of Existing Homes Surge to a 14-Year High. Sales of existing homes rose to a 14-year high of 6 million at an annualized pace in August, the National Association of Realtors said in a report on Tuesday. “Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” said Lawrence Yun, NAR’s chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.” The number of properties on the market at the end of August totaled 1.49 million, down 18.6% from the year-ago month, the report said. The cheapest home financing costs on record are driving demand for homes, Yun said. Mortgage rates have reached new lows nine times since the Federal Reserve began buying mortgage bonds in March to expand access to credit, according to a weekly survey by Freddie Mac.
Homeowners Gain Over $620 Billion in Equity in Second Quarter. U.S. homeowners with mortgages witnessed a 6.6% year-over-year increase in their equity in the second quarter of 2020 – representing a cumulative gain of $620 billion for the nation and an average $9,800 hike in equity per homeowner, according to a new report by CoreLogic. “Homeowners’ balance sheets continue to be bolstered by home price appreciation, which in turn mitigated foreclosure pressures,” said Frank Martell, president and CEO of CoreLogic.
New Home Sales at Highest Pace Since September 2006. New single-family home sales surged in August, as housing demand was supported by low-interest rates, a renewed consumer focus on the importance of housing, and rising demand in lower-density markets like suburbs and exurbs. Census and HUD estimated new home sales in August at a 1.01 million seasonally adjusted annual pace, an approximate 4.8% gain over revised July rate of 965,000 and is 43.2% above the August 2019 estimate of 706,000. This is the strongest seasonally adjusted annual rate since September 2006. The gains for new home sales are consistent with the NAHB/Wells Fargo HMI, which soared to an all-time high of 83 in September, demonstrating that housing is the leading sector for the economy. Consider that despite high unemployment, new home sales are estimated to be 14.9% higher for the first eight months of 2020 compared to the first eight months of 2019. Thus far in 2020, new home sales are higher in all regions. Sales on a year-to-date basis are 12% higher in the West, 14% in the South, 24% higher in the Midwest and the Northeast.