Over the past year, Arizona has led the way in home price appreciation, showing 12 percent year-over-year gains. Other sensitive metropolitan statistical areas (MSAs) also posted price increases, with Barclays examining certain MSAs in the Sun Belt as bellwethers for recovery.
As migration patterns bring homebuyers back to Sun Belt MSAs (such as California’s Inland Empire, Las Vegas, Arizona’s Phoenix-Mesa-Glendale, and others), analysts are seeing an increase in housing demand, resulting in the absorption of oversupply and a turnaround in home prices.
In addition, Barclays’ data shows that Florida’s housing recovery (previously anticipation in 2013-2015) has arrived early as the state’s home price index soars 10.3 percent over expectations.
“While we had expected long-term outperformance in these markets, the exact timing of recovery was less clear. Now that these markets have exhibited strong [home price appreciation] for the past several quarters, the momentum term in our forecast has switched from negative to positive, and the near-term outlook for Sun Belt MSAs has become significantly more bullish,” said Barclays.
The median price of an existing single-family home rose in June to the highest level since September 2008, the fifth straight month-over-month gain, the National Association of Realtors reported Thursday. The median price was up 7.9 percent from June 2011.
June to the highest level since almost four years, the fifth straight month-month gain, the National Association of Realtors (NAR) reported Thursday. The median price was up 7.9 percent from June 2011.
Existing home sales dropped to 4.37 million in June to the lowest level since last October, the NAR said. It was the fourth drop in the last five months. Economists had expected the sales pace to increase to 4.65 million from 4.62 million in May.
Despite the month-month decline, existing home sales continue a steady, longer-term increase. Sales have averaged 4.54 million in the first half of this year compared with 4.258 million in the same period last year and 4,307 million in the last half of 2011.
The NAR’s Pending Home Sales Index for April – which would have been reflected in the June home sales (closed sales) report — had fallen to 95.5 from 101.1 in March.
The median price of an existing home climbed 5.0 percent from May to its highest level since October 2008 when it was $189,400. The median price is up 7.9 percent in the last year, the strongest year-year increase since February 2006 when it showed an 8.3 percent year-year increase. The median price has shown a year-year gain for four straight months for the first time since mid-2006.
The inventory of homes for sale in June fell to 2.39 million, bringing the months’ supply of homes on the market to 6.6 from 6.4 in May.
Even with the month-month drop in sales, the NAR said June sales were up 4.5 percent in the last year, the 12th straight month of year-year sales increases. However, sales in April and May were ahead of prior year sales by double digit percentages, up 10.0 percent in April over April 2011 and up 11.2 percent in May over May 2011.
Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 25 percent of June sales — 13 percent were foreclosures and 12 percent were short sales —, unchanged from May, the NAR said, but down from 30 percent in June 2011. Foreclosures sold for an average discount of 18 percent below market value in June, while short sales were discounted 15 percent.
Total housing inventory at the end of June fell 3.2 percent from May, the third decline in the last four months and is 24.4 percent below a year ago when the inventory was 3.16 million, a 9.1-month supply.
Regionally, existing-home sales fell in June in all four Census regions, down 11.5 percent month-month in the Northeast, 6.9 percent in the West, 4.4 percent in the South and 1.9 percent in the Midwest.
Sales were up year-year in three of the four regions, falling only in the West where they were down 3.6 percent. Sales improved year-year in the Midwest by 14.6 percent, in the South by 5.5 percent and in the Northeast by 1.9 percent.
The median price of an existing home rose month-month in every region and in year-year in three regions, falling 1.8 percent in the Northeast but increasing 13.3 percent in the West, 8.4 percent in the Midwest and 6.6 percent in the South.
This is good news! Higher loan limits will make mortgages more accessible for hard-working middle-class families throughout the country. In fact, nearly two-thirds of buyers who will be helped by the loan limits extension have incomes below $100,000. On flood insurance, the extension until December 16th ensures no lapse, but we still need to push for Congress to pass the five-year reauthorization.
In 2010, the FHA was used by 56 percent of all first-time homebuyers, and 85 percent of borrowers obtaining homes at the higher loan limits had incomes below $150,000. In addition, 60 percent of all African-American and Hispanic homebuyers used FHA.
The truth is that it actually depends a lot on where in the country the borrower lives. Geography often dictates what the price of “affordable housing” is. Last month’s reset to 115 percent impacted 669 counties in 42 states and territories, with an average loan limit reduction of more than $68,000. We support giving middle-class borrowers the same access to affordable mortgage financing, no matter where they make their home.
For example, many people think of California as a high cost state, and there are many areas where it is. San Francisco will benefit because many middle class homes bump up against the $729,750 limit. What many people don’t know is there are many counties in California that are not considered high cost and will benefit. Take Fresno County, for example, prices will go from $281,750 to $311,250 to qualify. As you can see, this really benefits consumers no matter where they live.
In Arizona the legislation will raise the FHA loan limit from the current $270, 050 to $346.250. This is a whopping $76,200. increases. It may not sound like much but if you have your home listed for sale at $325,000 the new legislation will increase your pool of buyers substantially!