Home sales and construction has slowed in light of the in pending recession.
Existing Home Sales fell 1.5% from August to September, per the National Association of Realtors (NAR). Sales were also down 23.8% when compared to September of last year. This is a critical report for taking the pulse of the housing market, as it measures closings on existing homes, which represent around 90% of the market.
What does that really mean? Activity in the housing market has certainly slowed, but home prices are still being supported by continued low inventory. Also, the rise in inventory that occurs every summer so that the family move can be complete prior to the new school year.
The number of available homes declined for the second month in a row, from 1.28 million at the end of August to 1.25 million at the end of September. This equates to a 3.2 months’ supply of homes.
However, there were only 732,000 “active listings” in September, which means that 41% of the “inventory” in the Existing Home Sales report is under contract and not truly available. This speaks to demand, as a normal market has 25% of inventory under contract. When looking at the months’ supply of available homes for sale, it’s really 1.9 months.
And while there are reports that homes are sitting longer on the market, they are still selling quickly when priced correctly. Average days on market increased slightly from 16 days in August to 19 days in September, while 70% of homes were on the market for less than 30 days.
NAR’s chief economist, Lawrence Yun, explained how today’s dynamics are so different than during the housing bubble. “Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory." He added, "The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today."
September also brought a slowdown in home construction as Housing Starts, which measure the start of construction on homes, fell 8.1% from August. Starts for single-family homes, which are the most important because they are in such high demand among buyers, were also down 4.7% from August and 18.5% from September of last year. Building Permits for single-family homes, which are indicative of future supply, also fell 3.1% for the month and 17.3% year over year.
Housing Completions were up 6.1% from August to a 1.427 million unit annualized pace. While this is a step in the right direction, household formations are trending between 1.6 million and 1.7 million annualized, meaning completions are not keeping pace.
What does this really mean? Builders have clearly slowed down production and it appears they have learned their lesson from 2006 and 2007, when they kept building homes despite reduced demand. However, the lack of new supply coupled with the fact that many existing homeowners are staying put with a 3% mortgage should provide some support for home values.
The number of people filing for unemployment benefits for the first time fell by 12,000 in the latest week, as 214,000 Initial Jobless Claims were reported. This decline followed increases of 29,000 and 7,000 in the previous two weeks’ filings. Continuing Claims, which measure people who continue to receive benefits after their initial claim is filed, rose 21,000 to 1.385 million.
Again, what does this tell us? While this report can be the “canary in the coal mine” to show that the job market is starting to soften, the volatility of up and down continues and we’re still waiting for that recession-indicating sustained uptick in filings for unemployment.
No tricks here! This Pumpkin Pudding courtesy of the Food Network is a delicious treat that’s also quick and easy to make.
In a medium saucepan, whisk to combine 3 cups whole milk, one 15-ounce can pumpkin puree, 1 teaspoon ground cinnamon, 1/2 teaspoon allspice, 1/2 teaspoon ground cloves and 1 teaspoon ground ginger. Heat on medium-low and bring to a gentle simmer.
In a large bowl, whisk together 1 1/4 cups sugar, 1/3 cup cornstarch and 1/2 teaspoon salt. Whisk in 5 large egg yolks and 1 cup whole milk.
Whisk half of the hot milk mixture into the egg mixture until smooth, then slowly whisk the egg and milk mixture back into the saucepan. Cook over medium heat until mixture boils, then continue to cook and whisk constantly until pudding has thickened, around 3 to 4 minutes.
Remove from heat and stir in 1 teaspoon pure vanilla extract and 2 tablespoons unsalted butter.
Break 12 ginger snap cookies into smaller pieces. Place a layer into the bottom of a serving dish, then add a layer of the pudding. Repeat with one more layer of cookies and pudding. Cover with plastic wrap and refrigerate until cold, at least 2 hours.
Our goal here is to assistant anyone who has Mortgage or Real Estate questions or needs. Always feel free to contact us for further assistance or clarification of the articles we produce.
Want to find out how much your home costs? Click here and find out in minutes!
Home sales and construction has slowed in light of the in pending recession.
Existing Home Sales fell 1.5% from August to September, per the National Association of Realtors (NAR). Sales were also down 23.8% when compared to September of last year. This is a critical report for taking the pulse of the housing market, as it measures closings on existing homes, which represent around 90% of the market.
What does that really mean? Activity in the housing market has certainly slowed, but home prices are still being supported by continued low inventory. Also, the rise in inventory that occurs every summer so that the family move can be complete prior to the new school year.
The number of available homes declined for the second month in a row, from 1.28 million at the end of August to 1.25 million at the end of September. This equates to a 3.2 months’ supply of homes.
However, there were only 732,000 “active listings” in September, which means that 41% of the “inventory” in the Existing Home Sales report is under contract and not truly available. This speaks to demand, as a normal market has 25% of inventory under contract. When looking at the months’ supply of available homes for sale, it’s really 1.9 months.
And while there are reports that homes are sitting longer on the market, they are still selling quickly when priced correctly. Average days on market increased slightly from 16 days in August to 19 days in September, while 70% of homes were on the market for less than 30 days.
NAR’s chief economist, Lawrence Yun, explained how today’s dynamics are so different than during the housing bubble. “Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory." He added, "The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today."
September also brought a slowdown in home construction as Housing Starts, which measure the start of construction on homes, fell 8.1% from August. Starts for single-family homes, which are the most important because they are in such high demand among buyers, were also down 4.7% from August and 18.5% from September of last year. Building Permits for single-family homes, which are indicative of future supply, also fell 3.1% for the month and 17.3% year over year.
Housing Completions were up 6.1% from August to a 1.427 million unit annualized pace. While this is a step in the right direction, household formations are trending between 1.6 million and 1.7 million annualized, meaning completions are not keeping pace.
What does this really mean? Builders have clearly slowed down production and it appears they have learned their lesson from 2006 and 2007, when they kept building homes despite reduced demand. However, the lack of new supply coupled with the fact that many existing homeowners are staying put with a 3% mortgage should provide some support for home values.
The number of people filing for unemployment benefits for the first time fell by 12,000 in the latest week, as 214,000 Initial Jobless Claims were reported. This decline followed increases of 29,000 and 7,000 in the previous two weeks’ filings. Continuing Claims, which measure people who continue to receive benefits after their initial claim is filed, rose 21,000 to 1.385 million.
Again, what does this tell us? While this report can be the “canary in the coal mine” to show that the job market is starting to soften, the volatility of up and down continues and we’re still waiting for that recession-indicating sustained uptick in filings for unemployment.
No tricks here! This Pumpkin Pudding courtesy of the Food Network is a delicious treat that’s also quick and easy to make.
In a medium saucepan, whisk to combine 3 cups whole milk, one 15-ounce can pumpkin puree, 1 teaspoon ground cinnamon, 1/2 teaspoon allspice, 1/2 teaspoon ground cloves and 1 teaspoon ground ginger. Heat on medium-low and bring to a gentle simmer.
In a large bowl, whisk together 1 1/4 cups sugar, 1/3 cup cornstarch and 1/2 teaspoon salt. Whisk in 5 large egg yolks and 1 cup whole milk.
Whisk half of the hot milk mixture into the egg mixture until smooth, then slowly whisk the egg and milk mixture back into the saucepan. Cook over medium heat until mixture boils, then continue to cook and whisk constantly until pudding has thickened, around 3 to 4 minutes.
Remove from heat and stir in 1 teaspoon pure vanilla extract and 2 tablespoons unsalted butter.
Break 12 ginger snap cookies into smaller pieces. Place a layer into the bottom of a serving dish, then add a layer of the pudding. Repeat with one more layer of cookies and pudding. Cover with plastic wrap and refrigerate until cold, at least 2 hours.
Our goal here is to assistant anyone who has Mortgage or Real Estate questions or needs. Always feel free to contact us for further assistance or clarification of the articles we produce.
Want to find out how much your home costs? Click here and find out in minutes!
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