The final quarter of 2019 sees positive momentum building to end the year as the National Association of Realtors reports This Week in Real Estate that existing home sales rose nearly 2% last month. Furthermore, the Housing Market Index, which measures builder confidence, is experiencing the highest sentiment levels of 2019 the past two months. Below are a few highlights from the third week of November that influence our business:
Existing-Home Sales Rebound in October. Despite the slowdown, last month, existing-home sales, released by the National Association of Realtors, climbed more than expected in October. Total existing-home sales, including single-family homes, townhomes, condominiums, and co-ops, rose 1.9% to a seasonally adjusted annual rate of 5.46 million in October. On a year-over-year basis, sales were 4.6% higher than a year ago. Regionally, while existing sales in the Midwest and South grew 1.6% and 4.4% compared to the previous month, sales fell 1.4% and 0.9% in the Northeast and the West. On a year-over-year basis, sales rose in all four major regions except for the Northeast, ranging from 2.4% in the Midwest to 7.8% in the South. Sales in the Northeast remained unchanged to October 2018. Homes stayed on the market for an average of 36 days in October, up from 32 days both last month and equal to a year ago. In October, 46% of homes sold were on the market for less than a month.
Move Over Millenials, Gen Z is Ready For Homeownership. Apparently it is time to shift our total attention from the Millennial generation. A new survey from Freddie Mac introduces the housing hopes and dreams of its successor – Generation Z. This group, defined as those Americans who are now aged 14 to 33. “The dream of homeownership is alive and well” within the generation. It has a more positive perception of what it means to own a home than Millennials at the same age. Eighty-six percent want to own a home someday and 89 percent believe it is at least somewhat likely they will be able to do so. Among that latter group, the median estimate as to when they will achieve that goal is age 30, three years younger than the current median homebuying age of 33. Freddie Mac’s survey data and other research show that the generation believes owning a home provides more privacy, control, and independence than renting. They feel owning a home is a sign of success, is something to be proud of and provides stability and/or financial security.
Builder Confidence Holds Firm in November. Builder confidence in the market for newly-built single-family homes edged one point lower to 70 in November, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The past two months mark the highest sentiment levels in 2019. Single-family builders are currently reporting ongoing positive conditions, spurred in part by low mortgage rates and continued job growth. In a further sign of solid demand, this is the fourth consecutive month where at least half of all builders surveyed have reported positive buyer traffic conditions. There has been substantial year-over-year improvement following the housing affordability crunch of late 2018. Looking at the three-month moving averages for regional HMI scores, the Northeast posted a two-point gain to 62, the West was up three points to 81 and the South moved one point higher to 74. The Midwest remained unchanged at 58.