We’re starting to see big concerns about pricing and affordability

2015. június 3. szerda, 08:54Glonczi László Kubu

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existing homes decrease to nine

WASHINGTON Sales of previously owned homes fell more than expected in January as a tight supply forced up prices, showing the residential real estate market faces an uneven recovery.

Purchases slowed 4.9 percent to a 4.82 million annualized rate, the least since April, after a 5.07 million pace that was higher than previously estimated, figures from the National Association of Realtors showed Monday in Washington. The median forecast of 74 economists in a Bloomberg survey called for a fall to 4.95 million.

The number of houses on the market dropped http://www.cheapjerseys11.com/ in January for a second straight month compared with last year and price increases were broad based, making it difficult for first time and younger buyers to get into the market. Gains in employment and historically low mortgage rates will probably sustain demand, while rising household formation and a shortage in rental supply should also provide a boost this year over last.

„We’re starting to see big concerns about pricing and affordability,” said Jacob Oubina, a senior economist at RBC Capital Markets in New York, who’s forecast that sales would drop to a 4.8 million pace was the closest in the Bloomberg survey. „There is concern about lack of supply of affordable housing and we’re not just talking about cheap housing. Folks are finding out they are priced out of the market.”

Economist estimates in the Bloomberg survey ranged from a 4.76 million to 5.2 million sales pace, from a previously reported 5.04 million a month earlier.

The median price of an existing home climbed 6.2 percent in January from the same period a year earlier, to $199,600, the report showed.

Increases of this size clearly out pace income gains and general inflation and is probably caused by a lack of supply, Lawrence Yun, NAR chief economist, said at a news conference Monday as the figures were released. This is not a „healthy” sign, he said.

The number of previously owned homes on the market dropped 0.5 percent from January 2014 to 1.87 million, marking the second consecutive year to year after 15 consecutive gains.

The decrease in supply is a „puzzle” and is „not welcome news,” Yun said. It could either be because of the lock in effect in which current owners don’t want to give up there already low mortgage rates or because lingering uncertainty about the outlook for the economy, he said.

Owners are now staying in their homes for about 10 years on average, compared with the more normal seven years, Yun said a recent NAR survey showed.

At the current sales pace, it would take 4.7 months to sell those houses compared with 4.4 months at the end of the prior month. Less than a five months’ supply is considered a tight market, the Realtors group has said.

Home sales will benefit from the improving labor market, which bounded forward in January. Payrolls advanced by 257,000 month over month, according to Labor Department figures, capping the biggest three month gain in 17 years. The unemployment rate cheap jerseys rose to 5.7 percent from 5.6 percent as more than a million Americans streamed into the labor force seeking work.

Low borrowing costs help, too. The average 30 year, fixed rate mortgage was 3.76 percent in the week ended Feb. 19, according to data from Freddie Mac in McLean, Virginia. That’s still close to the record low of 3.31 percent reached in November 2012.

Barriers to credit are easing for first time homebuyers. Fannie Mae, which buys mortgages and packages them into securities, began purchasing loans with down payments as low as 3 percent in December, a drop from its previous floor of 5 percent for most loans. Freddie Mac is preparing a similar reduction beginning in March.

Fannie Mae, Freddie Mac and the FHA also made changes last year to the way they handle mortgages with underwriting flaws to give banks more certainty that they won’t have to absorb the cost of soured loans that they originated with due diligence. The average FICO credit score on purchase loans backed by Fannie Mae or Freddie Mac was 754 in November compared with 759 in 2013, according to mortgage technology company Ellie Mae.

With the report, the Realtors’ group issued annual revisions covering the monthly data for the past three years to reflect changes in seasonal adjustments. The annual totals were unaffected.

Existing home sales, which are tallied only when purchase contracts close, account for more than 90 percent of the residential market. A timelier barometer is new home purchases, because they are tabulated earlier in the process, when contracts are signed. They constitute about 7 percent of the market. Those figures come out Feb. 25.