In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses the unemployment rate and payroll data.
NAR Research’s Home Price Monitor Series reviews national home prices by examining several widely cited national measurements. It is released monthly and allows REALTORS® to gain insight into the recent performance of national prices, factors affecting that performance, and the likely direction of prices in the months ahead. The Home Price Monitor includes the same data covered in the national media that clients will expect their REALTORS® to know and be able to comment on and provides different, more complete coverage of the information all in one place. Today’s blog post focuses on the recent release of the FHFA Price Index.
- For the first time since 2007, home prices measured by the government price index put out by FHFA that uses Fannie and Freddie loan data on home purchases increased in the year from February 2011 to February 2012.
- Monthly data from the same source showed that prices were up 0.3 percent nationally from January to February.
- Regionally, year over year prices showed growth in the Mountain, West South Central, East South Central, New England, and South Atlantic divisions. Small declines – less than 1 percent – were seen in other divisions. (For states by region, see the full FHFA report here.)
- One other notable observation, the FHFA house price index does NOT exclude distressed properties from evaluation. Other research has shown that distressed properties typically sell at a discount, and data series that attempt to exclude distressed sales tend to show better price performance.
- Get more information on other house price measures from NAR’s House Price Monitor here .
In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses consumer price index and consumer sentiment.
- Did you know that nearly 10 million more renter households had the income to qualify to buy a home in 2011 versus 2005?
- Many factors have increased the number of renter households qualified to purchase a home in 2011 versus 2000 and 2005: 1) incomes have increased, 2) population has grown, 3) mortgage rates are lower, and 4) prices have fallen since 2005.
- The tables below show the data underlying the change in required income. Because of lower home prices and mortgage rates, qualifying income required to purchase a median priced home has fallen from $56,600 in 2005 and $40,300 in 2000 to $33,100 in 2011.
- Finally, based on all of these factors, we see that while 33 percent of renters qualified to buy the median priced home in 2000 and 24 percent of renters qualified to buy the median priced home in 2005, 47 percent of renters would qualify in 2011[1]. Translating these numbers into households, 7.7 million renters qualified to purchase the median priced home in 2005 while in 2010, 15 million renter households qualify.
- These calculations assume that potential buyers meet credit qualifications and have sufficient cash on hand to close a transaction. Lending standards, credit quality, and access to funds will affect the number of households who will be able to buy a home.
[1] This calculation assumes that income distribution in 2011 is the same as it was in 2010.
Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update discusses personal income and consumer sentiment.
- The government price index put out by FHFA that uses Fannie and Freddie loan data on home purchases showed that prices were roughly steady from the 3rd to 4th quarters nationally, slipping only 0.1 percent. From the 4th quarter of 2010, prices were down 2.4 percent.
- Monthly data from the same source showed that prices were up 0.7 percent in December.
- The map above shows price changes by state from the 4th quarter of 2010 to the 4th quarter of 2011. Twelve states plus DC had price growth in this period. The map shows that many of these states were concentrated in the central plains.
- The metro area with the greatest year over year price growth was Bismarck, ND. Other metro areas in the top 20 were spread across the country from Wyoming to Pennsylvania.
- One other notable observation, the FHFA house price index does NOT exclude distressed properties from evaluation. Other research has shown that distressed properties typically sell at a discount, and data series that attempt to exclude distressed sales tend to show better price performance.
- Identifiably distressed properties are an estimated 7 to 13 percent of the FHFA sample. Thus, non-distressed properties may see even stronger price performance than reported by the FHFA index.
EHS 2011Q4 Release: February 9, 2012
Housing affordability conditions improved in most metropolitan areas from softer existing-home prices and record-low mortgage interest rates in the fourth quarter, with rising sales and lower inventory creating more balanced conditions. Here is a closer look at some highlights from the quarterly release:
NAR’s existing-home sales series is provided for the four major regions and for the nation.
Most state and local associations of Realtors® provide data for their service areas. This information is typically raw counts of sales from local multiple listing services (MLSs) though availability and format of the data varies. The following list of state data providers is given as a courtesy reference. Contact the state or local Realtor® association in your area for more information (find contact information here).
NAR may be able to furnish consultancy services to estimate state-by-state home sales data to analysts. The estimate will not be strictly based on Census benchmarking because of reliability issues at the state sample size, and hence, incorporate more expanded alternative data sources that account for FSBOs, etc., using a number of sources: the Census’ American Community Survey, data from Home Mortgage Disclosure Act, housing permits, and courthouse level data. For this consultancy-for-fee service, please contact Danielle Hale at dhale@realtors.org.
Seasonal Patterns in Home Sales Data
It comes as no surprise to those in the real estate industry that there is a seasonal pattern to home sales data. This concept is also easily understood by those outside of the industry who can picture families with school-age children preferring to purchase homes and move in the summer flooding the market during those months so as to avoid disruption to education. It is also easy to picture singles, young couples, or empty nesters remaining in the market regardless of the season. While there are undoubtedly other potential explanations behind the seasonal pattern in home sales, one does not need to understand all of the possible drivers of a seasonal pattern to understand that it exists.
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