Category: Real Estate News

Media Contact: Walter Molony / 202-383-1177 / Email

WASHINGTON (March 20, 2014) – Home prices continued to show solid growth in most of the country due to limited inventory conditions, but rising prices and severe winter weather caused existing-home sales to slip in February, according to the National Association of Realtors®.

Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 0.4 percent to a seasonally adjusted annual rate of 4.60 million in February from 4.62 million in January, and 7.1 percent below the 4.95 million-unit level in February 2013. February’s pace of sales was the lowest since July 2012, when it stood at 4.59 million.

Lawrence Yun, NAR chief economist, said conditions in February were largely unchanged from January. “We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favorable than a year ago,” he said. “Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year.”

The median existing-home price2 for all housing types in February was $189,000, which is 9.1 percent above February 2013. “Price gains have translated into an additional $4 trillion of housing wealth recovery over the past three years,” Yun added.

Distressed homes3 – foreclosures and short sales – accounted for 16 percent of February sales, compared with 15 percent in January and 25 percent in February 2013.

Eleven percent of February sales were foreclosures, and 5 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in February, while short sales were discounted 11 percent.

Total housing inventory4 at the end of February rose 6.4 percent to 2.00 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, up from 4.9 months in January. Unsold inventory is 5.3 percent above a year ago, when there was a 4.6-month supply.

The median time on market for all homes was 62 days in February, down from 67 days in January and 74 days on market in February 2013. Short sales were on the market for a median of 94 days in February, while foreclosures typically sold in 60 days and non-distressed homes took 61 days. Thirty-four percent of homes sold in February were on the market for less than a month.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage declined to 4.30 percent in February from 4.43 percent in January; the rate was 3.53 percent in February 2013.

First-time buyers accounted for 28 percent of purchases in February, up from 26 percent in January, but down from 30 percent in February 2013.

NAR President Steve Brown, co-owner of Irongate, Inc., Realtors® in Dayton, Ohio, said student debt appears to be a factor in the weak level of first-time buyers. “The biggest problems for first-time buyers are tight credit and limited inventory in the lower price ranges,” he said. “However, 20 percent of buyers under the age of 33, the prime group of first-time buyers, delayed their purchase because of outstanding debt. In our recent consumer survey, 56 percent of younger buyers who took longer to save for a downpayment identified student debt as the biggest obstacle.”

Brown notes the survey results are for recent homebuyers. “It’s clear there are other people who would like to buy a home that are not in the market because of debt issues, so we can expect a lingering impact of delayed home buying,” Brown added.

All-cash sales comprised 35 percent of transactions in February, up from 33 percent in January and 32 percent in February 2013. Individual investors, who account for many cash sales, purchased 21 percent of homes in February, compared with 20 percent in January; they were 22 percent in February 2013. Seventy-three percent of investors paid cash in February.

Single-family home sales edged down 0.2 percent to a seasonally adjusted annual rate of 4.04 million in February from 4.05 million in January, and are 6.9 percent below the 4.34 million-unit level in February 2013. The median existing single-family home price was $189,200 in February, up 9.0 percent from a year ago.

Existing condominium and co-op sales declined 1.8 percent to an annual rate of 560,000 units in February from 570,000 in January, and are 8.2 percent below a year ago. The median existing condo price was $187,900 in February, which is 9.8 percent above February 2013.

Regionally, existing-home sales in the Northeast fell 11.3 percent to an annual rate of 550,000 in February, and are 12.7 percent below February 2013. The median price in the Northeast was $237,800, up 1.5 percent from a year ago.

Existing-home sales in the Midwest declined 3.8 percent in February to a pace of 1.00 million, and are 12.3 percent below a year ago. The median price in the Midwest was $140,900, which is 8.6 percent higher than February 2013.

In the South, existing-home sales rose 1.5 percent to an annual level of 1.98 million in January, but are 0.5 percent below February 2013. The median price in the South was $163,400, up 8.3 percent from a year ago.

Existing-home sales in the West rose 5.9 percent to a pace of 1.07 million in February, but are 10.1 percent below a year ago. The median price in the West was $279,400, up 18.0 percent from February 2013.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

Homeownership Aspirations Among Current Renters Highest in Markets Hard-Hit by Housing Recession, According to Inaugural Zillow Housing Confidence Index

– U.S. Housing Confidence Index currently stands at 63.7.

– If all renters indicating they want to buy a home in the next year actually did, it would represent more than 4.2 million first-time home sales.

– Renters in Miami, Atlanta & Las Vegas expressed the most desire to become homeowners.

– All aspirations unlikely to be realized soon, as homeownership headwinds persist.

SEATTLE, March 13, 2014 /PRNewswire/ —

Millions of current renters nationwide aspire to buy a home in the next year, according to the inaugural edition of the Zillow Housing Confidence Index (ZHCI)i, suggesting strong demand among potential first-time homebuyers if market conditions are favorable. But existing headwinds, including tight inventory, rising mortgage interest rates and growing affordability problems in a handful of areas, may make it difficult for potential buyers to follow through on those aspirations as the market enters the busy spring home shopping season.

In 19 of the 20 large metro areas surveyed, more than 5 percentii of all residents indicated they wanted to buy a home in the next year. Among current renters, homeownership aspirations were particularly strong, with about 10 percent of all renters nationwide saying they would like to buy within the next 12 months. The vast majority of these respondents also said they were confident or somewhat confident they could afford homeownership nowiii. If all renters that indicated they wanted to buy actually did purchase a home in the next year, it would represent more than 4.2 million first-time home salesiv, more than double the roughly 2.1 million first-time home buyers in 2013.

Homeownership aspirations among current renters were the highest in Miami, Atlanta and Las Vegas, three metro areas that were among the hardest-hit by the housing recession, according to the Zillow Homeownership Aspirations Index (ZHAI), a component of the broader ZHCI.

But despite strong desires to own a home, market conditions remain mixed for potential buyers. While inventory is up nationally compared to a year ago (up 11.1 percent), it still remains well below optimal levels, and has fallen year-over-year in eight of the 20 metro areas surveyed by the ZHCI. Recent data from the Census Bureau also indicates that the share of new homes built as rental units has grown, while the share of new construction dedicated to the kinds of single-family homes likely to be favored by first-time buyers is downv.

Mortgage interest rates are also on the rise, currently standing at about 4.2 percent nationally, according to the Zillow Mortgage Marketplace, well above 2013 lows of roughly 3.3 percent. And as interest rates rise, homes in a number of particularly hot markets, including San Francisco, Los Angeles, San Jose and San Diego, are already looking unaffordable for buyers with lower incomes, especially first-time buyers, as more income is devoted to mortgage payments.

“For the housing market to continue its recovery, it is critical that homes are both available and remain affordable to meet the strong demand these survey results are predicting, particularly from first-time homebuyers,” said Zillow® Chief Economist Dr. Stan Humphries. “Even after a wrenching housing recession, this data shows that the dream of homeownership remains very much alive and well, even in those areas that were hardest hit. But these aspirations must also contend with the current reality, and in many areas, conditions remain difficult for buyers. The market is moving toward more balance between buyers and sellers, but it is a slow and uneven process.”

The Zillow Housing Confidence Index, sponsored by Zillow, Inc. and developed by Pulsenomics LLC, is measured on a 0 to 100 scale, with readings above 50 indicating positive sentiment. The overall ZHCI for the U.S. stood at 63.7 at the start of the yearvi. Of the 20 metro areas surveyed, 11 had individual confidence levels higher than the U.S. as a whole. The overall U.S. ZHAI among all households, which measures consumers’ plans to buy and their attitudes toward the social value of homeownership, stood at 62.4.

“While it is reassuring to see all of the headline ZHCIs in positive territory, the underlying indicators of homeownership aspirations, housing market conditions and expectations for each metro area and tenure segment reveal significant variability,” said Pulsenomics Founder Terry Loebs. “Several of these drivers of overall housing confidence registered negative or only marginally positive readings in some cities. These data confirm that real estate recovery and economic healing are relative, local phenomena, and in some instances, likely reflect the lingering psychological impact of the housing bust.”

About Zillow:

Zillow, Inc. (NASDAQ: Z) operates the largest home-related marketplaces on mobile and the Web, with a complementary portfolio of brands and products that help people find vital information about homes, and connect with the best local professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of economists and data analysts produce extensive housing data and research covering more than 350 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. The Zillow, Inc. portfolio includes Zillow.com®, Zillow Mobile, Zillow Mortgage Marketplace, Zillow Rentals, Zillow Digs™, Postlets®, Diverse Solutions®, Agentfolio®, Mortech®, HotPads™ and StreetEasy®. The company is headquartered in Seattle.

Zillow.com, Zillow, Postlets, Mortech, Diverse Solutions, Agentfolio and StreetEasy are registered trademarks of Zillow, Inc. HotPads and Zillow Digs are trademarks of Zillow, Inc.

About Pulsenomics:

Pulsenomics LLC (www.pulsenomics.com) is an independent research and consulting firm that specializes in data analytics, new product and index development for institutional clients in the financial and real estate arenas. Pulsenomics also designs and manages expert surveys and consumer polls to identify trends and expectations that are relevant to effective business management and monitoring economic health. Pulsenomics LLC is the author of The Home Price Expectations Survey, The U.S. Housing Confidence Survey, and The U.S. Housing Confidence Index. Pulsenomics®, The Housing Confidence Index™, and The Housing Confidence Survey™ are trademarks of Pulsenomics LLC.

The ZHCI is computed by Pulsenomics from data compiled by the Zillow-sponsored U.S. Housing Confidence Survey (HCS), consisting of more than 10,000 interviews with adult landline and cellphone users nationwide, collecting more than 300,000 consumer responses pertaining to the real estate market where each survey respondent lives. The headline Housing Confidence Index is comprised of three sub-indices: the Housing Market Conditions Index, measuring recent and prevailing home value trends and current buying/selling conditions; the Housing Expectations Index, which gauges expected changes in local home values, the overall affordability of homeownership and the relative value of homeownership; and the Homeownership Aspirations Index, which measures consumers’ plans to buy and their attitudes toward the social value of homeownership. To view [or download] all 256 index values that comprise the ZHCI data set, or to learn more about the ZHCI calculation methodology, please visit Zillow.com/research or pulsenomics.com.
ii At least 500 HCS questionnaires are completed within each of the 20 metropolitan areas where Pulsenomics conducts this survey research. For each edition of the HCS, Pulsenomics compiles more than 300,000 response data points that are recorded within the 10,000 completed questionnaires. At a 95% confidence interval, the theoretical margin of sampling error for an aggregated, household-weighted sample of 10,000 (comprised of 20 metro-level probability samples of 500 each) is +/- 1.2%. The theoretical margin of sampling error for a probability sample of 500 drawn from a single U.S. metro area population is +/- 4.4%.
iii In 17 of 20 metros surveyed, at least 90 percent of surveyed renters who said they want to buy in the coming year indicated they were “confident” or “somewhat confident” they could afford a home. In Seattle, 82 percent indicated confidence, and in Dallas and San Francisco, 84 percent indicated confidence.
iv For purposes of this analysis, we label current renters that plan to purchase a home as “first-time” homebuyers. We acknowledge that a portion of current renters may have owned a home in the past (but this share is unknown and it is likely the majority of renters that do purchase a home in the next year will be doing so for the first time).
v http://www.census.gov/construction/nrc/
vi The inaugural U.S. Housing Confidence Survey was fielded between Jan. 6 2014 and Jan. 13 2014.

SOURCE Zillow, Inc.

Honolulu and San Francisco Bay Area Will Tip In Favor Of Renting If Mortgage Rates Hit 6 Percent

SAN FRANCISCO, February 26, 2014 – Trulia (NYSE: TRLA), a leading online marketplace for home buyers, sellers, renters, and real estate professionals, today released its Winter 2014 Rent vs. Buy Report, revealing whether buying a home is more affordable than renting in America’s 100 largest metropolitan areas.

Looking at homes for sale and for rent on Trulia between December 2013 and January 2014, this study compares the average cost of renting and owning for all homes on the market within a metro, factoring in all cost components including transaction costs, taxes, and opportunity costs. For the full report and methodology, see here.

Renting Will Beat Buying If Mortgage Rates Hit 10.6 Percent

Despite rising home prices, today’s low mortgage rates have kept homeownership from becoming more expensive than renting both nationally and in each of the 100 largest housing markets. In fact, mortgage rates would need to rise to 10.6 percent for renting to become cheaper than buying nationally – and rates haven’t been that high since 1989. However, some markets might tip in favor of renting this year if prices continue to outpace rents and if mortgage rates rise. Given current home prices and rents, Honolulu would tip at 5.0 percent, followed by San Jose and San Francisco.

Note: Negative numbers indicate that buying costs less than renting. For example, buying a home in Detroit is 66 percent cheaper than renting in 2014. Trulia’s rent vs. buy calculation assumes a 4.5 percent 30-year fixed-rate mortgage with 20 percent down, itemizing tax deductions at the 25 percent bracket, seven years in the home, and conservative annual home-price appreciation assumptions ranging from 1.7 percent to 3.1 percent, depending on the metro. The mortgage rate tipping point is how high rates must rise before renting becomes cheaper than buying. Download the full rent vs. buy cost considerations for the 100 largest U.S. metros here: (PDF) or (Excel)

Where Homeownership Could Be A Big Gamble: California

Buyers during the housing bubble made big bets that home prices would continue to rise forever — and lost. With asking prices up 11.4 percent year-over-year nationally in January 2014, today’s buyers could fall into that same trap. So to help people consider the worst-case scenario, Trulia calculated the cost of renting vs. buying a home with the assumption that prices will appreciate or depreciate as they did during each local housing market’s worst seven-year period over the last 20 years. With this assumption, if the worst does happen, renting would become cheaper than buying in 37 of the 100 largest U.S. metros. For example, buying would become 79 percent more expensive than renting in San Jose if prices fell 2.8 percent annually. This is because even small differences in price appreciation can have a big effect on the future sales price of the home.

Note: This table assumes annual home-price appreciation equal to the worst seven-year period in the past 20 years for each metro, using Federal Housing Finance Agency (FHFA) price data. Download the rent vs. buy cost considerations for the 100 largest U.S. metros, assuming their worst home-price scenarios here: (PDF) or (Excel)

PRE-APPROVED QUOTES

• “Buying remains cheaper than renting across the country even after 2013’s big price rebound,” said Jed Kolko, Trulia’s Chief Economist. “Mortgage rates are still near historic lows, despite rising a point in the past year, and would be the envy of time travelers from the 1980s, 1990s, or 2000s. Even in markets like San Francisco where home prices are high relative to paychecks, buying costs less than renting for people who stay seven years and itemize their deductions.”
• “In many markets, the rent-versus-buy decision depends on the one factor you can’t control or perfectly predict: what happens to home prices after you buy,” said Jed Kolko, Trulia’s Chief Economist. “Sharp price appreciation could make homeownership essentially free, but price declines could mean that renting would have been the better deal in hindsight. The current home-price recovery could lull prospective buyers into thinking that future price gains are inevitable, but when doing the rent-versus-buy math, people should prepare for the worst, not just hope for the best.”

MULTIMEDIA

• View an interactive Rent vs. Buy Map illustrating how mortgage rates, tax deductions, and number of years in the home can affect the rent vs. buy decision
• Find out if renting or buying is a cheaper option for you with Trulia’s Rent vs. Buy Calculator

ABOUT TRULIA, INC.
Trulia (NYSE: TRLA) gives home buyers, sellers, owners, and renters the inside scoop on properties, places, and real estate professionals. Trulia has unique info on the areas people want to live that can’t be found anywhere else: users can learn about agents, neighborhoods, schools, crime, commute times, and even ask the local community questions. Real estate professionals use Trulia to connect with millions of transaction-ready buyers and sellers each month via our hyperlocal advertising services, social recommendations, and top-rated mobile real estate apps. Trulia’s Market Leader subsidiary delivers the leading end-to-end technology and marketing solutions that enable real estate professionals to grow and manage their businesses. Trulia is headquartered in downtown San Francisco. Trulia and the Trulia marker logo are registered trademarks of Trulia, Inc.

For further information: Daisy Kong, pr@trulia.com, 831-710-1388