Existing-Home Sales Rebound 3.0 Percent in February

Washington, D.C. – Despite consistently low inventory levels and faster price growth, existing-home sales bounced back in February after two straight months of declines, according to the National Association of Realtors®. Sizeable sales increases in the South and West offset declines in the Northeast and Midwest.  NAR Logo

Total existing-home sales which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 3.0 percent to a seasonally adjusted annual rate of 5.54 million in February from 5.38 million in January. After last month’s increase, sales are now 1.1 percent above a year ago.

Lawrence Yun, NAR chief economist, says sales were uneven across the country in February but did increase nicely overall. “A big jump in existing sales in the South and West last month helped the housing market recover from a two-month sales slump,” he said. “The very healthy U.S. economy and labor market are creating a sizeable interest in buying a home in early 2018. However, even as seasonal inventory gains helped boost sales last month, home prices – especially in the West – shot up considerably. Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar.”

Added Yun, “The unseasonably cold weather to start the year muted pending sales in the Northeast and Midwest in January and ultimately led to their sales retreat last month. Looking ahead, several markets in the Northeast will likely see even more temporary disruptions from the large winter storms that have occurred in March.”

The median existing-home price(2) for all housing types in February was $241,700, up 5.9 percent from February 2017 ($228,200). February’s price increase marks the 72nd straight month of year-over-year gains.

Total housing inventory(3) at the end of February rose 4.6 percent to 1.59 million existing homes available for sale, but is still 8.1 percent lower than a year ago (1.73 million) and has fallen year-over-year for 33 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace (3.8 months a year ago).

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage moved higher for the fifth straight month to 4.33 percent in February (highest since 4.34 percent in April 2014) from 4.03 percent in January. The average commitment rate for all of 2017 was 3.99 percent.

Properties typically stayed on the market for 37 days in February, which is down from 41 days in January and 45 days a year ago. Forty-six percent of homes sold in February were on the market for less than a month.

“Mortgage rates are at their highest level in nearly four years, at a time when home prices are still climbing at double the pace of wage growth,” said Yun. “Homes for sale are going under contract a week faster than a year ago, which is quite remarkable given weakening affordability conditions and extremely tight supply. To fully satisfy demand, most markets right now need a substantial increase in new listings.”

Realtor.com®’s Market Hotness Index, measuring time-on-the-market data and listings views per property, revealed that the hottest metro areas in February were San Francisco-Oakland-Hayward, Calif.; Midland, Texas; Vallejo-Fairfield, Calif.; San Jose-Sunnyvale-Santa Clara, Calif.; and Sacramento-Roseville-Arden-Arcade, Calif.

First-time buyers were 29 percent of sales in February, which is unchanged from last month and down from 31 percent a year ago. NAR’s 2017 Profile of Home Buyers and Sellers – released in late 2017(5) – revealed that the annual share of first-time buyers was 34 percent.

NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty, says first-time buyers are seeing stiff competition for the available listings in their price range. “Realtors® in several markets note that entry-level homes for first-timers are hard to come by, which is contributing to their underperforming share of overall sales to start the year.” she said. “Prospective buyers should start conversations with a Realtor® now on what they want in a new home. Even with the expected uptick in new listings in coming months, buyers in most markets will likely have to act fast on any available listing that checks all their boxes.”

All-cash sales were 24 percent of transactions in February, which is up from 22 percent in January and the highest since last February (27 percent). Individual investors, who account for many cash sales, purchased 15 percent of homes in February, which is down from 17 percent in January and unchanged from a year ago.

Distressed sales(5) – foreclosures and short sales – were 4 percent of sales in February, down from 5 percent in January and 7 percent a year ago. Three percent of February sales were foreclosures and 1 percent were short sales.

Single-family and Condo/Co-op Sales
Single-family home sales rose 4.2 percent to a seasonally adjusted annual rate of 4.96 million in February from 4.76 million in January, and are now 1.8 percent above the 4.87 million pace a year ago. The median existing single-family home price was $243,400 in February, up 5.9 percent from February 2017.

Existing condominium and co-op sales declined 6.5 percent to a seasonally adjusted annual rate of 580,000 units in February, and are now 4.9 percent below a year ago. The median existing condo price was $227,300 in February, which is 5.7 percent above a year ago.

Regional Breakdown
February existing-home sales in the Northeast fell 12.3 percent to an annual rate of 640,000, and are now 7.2 percent below a year ago. The median price in the Northeast was $258,900, which is 3.6 percent above February 2017.

In the Midwest, existing-home sales dipped 2.4 percent to an annual rate of 1.22 million in February (unchanged from a year ago). The median price in the Midwest was $179,400, up 4.5 percent from a year ago.

Existing-home sales in the South jumped 6.6 percent to an annual rate of 2.41 million in February, and are now 3.4 percent above a year ago. The median price in the South was $215,700, up 5.4 percent from a year ago.

Existing-home sales in the West surged 11.4 percent to an annual rate of 1.27 million in February, and are now 2.4 percent above a year ago. The median price in the West was $370,600, up 9.6 percent from February 2017.

The National Association of Realtors® is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

The Face of Social Media in 2018

Pew Research Report on Social Media

Facebook and YouTube dominate this landscape, as notable majorities of U.S. adults use each of these sites. At the same time, younger Americans (especially those ages 18 to 24) stand out for embracing a variety of platforms and using them frequently. Some 78% of 18- to 24-year-olds use Snapchat, and a sizeable majority of these users (71%) visit the platform multiple times per day. Similarly, 71% of Americans in this age group now use Instagram and close to half (45%) are Twitter users.

Roughly two-thirds of U.S. adults (68%) now report that they are Facebook users, and roughly three-quarters of those users access Facebook on a daily basis. With the exception of those 65 and older, a majority of Americans across a wide range of demographic groups now use Facebook.

The video-sharing site YouTube – which contains many social elements, even if it is not a traditional social media platform – is now used by nearly three-quarters of U.S. adults and 94% of 18- to 24-year-olds.

Facebook remains the most widely used social media platform by a relatively healthy margin: some 68% of U.S. adults are now Facebook users. Other than the video-sharing platform YouTube, none of the other sites or apps measured in this survey are used by more than 40% of Americans.

With the exception of those 65 and older, Facebook is used by a majority of Americans across a wide range of demographic groups. But other platforms appeal more strongly to certain subsets of the population. In addition to the age-related differences in the use of sites such as Instagram and Snapchat noted above, these are some of the more prominent examples:

Pinterest remains substantially more popular with women (41% of whom say they use the site) than with men (16%).
LinkedIn remains especially popular among college graduates and those in high-income households. Some 50% of Americans with a college degree use LinkedIn, compared with just 9% of those with a high school diploma or less.
The messaging service WhatsApp is popular in Latin America, and this popularity also extends to Latinos in the United States – 49% of Hispanics report that they are WhatsApp users, compared with 14% of whites and 21% of blacks.

Click Here for the Full Report

 

NJ Gains $12K Home Equity in 2017

 Homeowner Equity Q4 2017
CoreLogic analysis shows U.S. homeowners with mortgages (roughly 63 percent of all properties*) have seen their equity increase by a total of $908.4 billion since the fourth quarter 2016, an increase of 12.2 percent, year over year.

*Homeownership mortgage source: 2016 American Community Survey.

Homeowners Emerge from the Negative Equity Trap
In the fourth quarter 2017, the total number of mortgaged residential properties with negative equity decreased 1 percent from the third quarter 2017* to 2.5 million homes, or 4.9 percent of all mortgaged properties. Compared to the fourth quarter 2016, negative equity decreased 21percent from 3.2 million homes, or 6.3 percent of all mortgaged properties.

 National Aggregate Value of Negative Equity: Q4 2017
The national aggregate value of negative equity was approximately $283.1 billion at the end of the fourth quarter of 2017. This is up quarter over quarter by approximately $5.7 billion (or 2.1 percent), from $277.4 billion in the third quarter of 2017 and down year over year by approximately $3.2 billion (or 1.1 percent), from $286.3 billion in the fourth quarter of 2016.

Negative equity peaked at 26 percent of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis which began in the third quarter of 2009.

National Homeowner Equity
In the fourth quarter 2017, the average homeowner gained approximately $15,100 in equity during the past year. California had the highest year-over-year average increase at $44,500. No states posted a decrease.

 

Elders Projected to Outnumber Children in 2030

MARCH 13, 2018 — The year 2030 marks an important demographic turning point in U.S. history according to the U.S. Census Bureau’s 2017 National Population Projections. By 2030, all baby boomers will be older than age 65. This will expand the size of the older population so that 1 in every 5 residents will be retirement age.

“The aging of baby boomers means that within just a couple decades, older people are projected to outnumber children for the first time in U.S. history,” said Jonathan Vespa, a demographer with the U.S. Census Bureau. “By 2035, there will be 78.0 million people 65 years and older compared to 76.4 million under the age of 18.”

The 2030s are projected to be a transformative decade for the U.S. population. The population is expected to grow at a slower pace, age considerably and become more racially and ethnically diverse.  Net international migration is projected to overtake natural increase in 2030 as the primary driver of population growth in the United States, another demographic first for the United States.

Although births are projected to be nearly four times larger than the level of net international migration in coming decades, a rising number of deaths will increasingly offset how much births are able to contribute to population growth. Between 2020 and 2050, the number of deaths is projected to rise substantially as the population ages and a significant share of the population, the baby boomers, age into older adulthood. As a result, the population will naturally grow very slowly, leaving net international migration to overtake natural increase as the leading cause of population growth, even as projected levels of migration remain relatively constant.

Other highlights:

Population Growth
Driving Population Growth: Projected Number of People Added to U.S. Population by Natural Increase and Net International MigrationBy 2060, the United States is projected to grow by 78 million people, from about 326 million today to 404 million. The population is projected to cross the 400-million threshold in 2058.
  • In coming years, the rate at which the U.S. population grows is expected to slow down. The population is projected to grow by an average of 2.3 million people per year until 2030. But that number is expected to decline to an average of 1.8 million per year between 2030 and 2040, and continue falling to 1.5 million per year from 2040 to 2060.

Aging

As the population ages, the ratio of older adults to working-age adults, also known as the old-age dependency ratio, is projected to rise. By 2020, there will be about three-and-a-half working-age adults for every retirement-age person. By 2060, that ratio will fall to just two-and-a-half working-age adults for every retirement-age person.
  • The median age of the U.S. population is expected to grow from age 38 today to age 43 by 2060.

Race and Ethnicity An Aging Nation: Projected Number of Children and Older Adults

  • The non-Hispanic White-alone population is projected to shrink over the coming decades, from 199 million in 2020 to 179 million in 2060 — even as the U.S. population continues to grow. Their decline is driven by falling birth rates and a rising number of deaths over time among non-Hispanic Whites as that population ages. In comparison, the White-alone population, regardless of Hispanic origin, is projected to grow from about 253 million to 275 million over the same period.
  • The Two or More Races population is projected to be the fastest growing over the next several decades, followed by single-race Asians and Hispanics of any race. The causes of their growth are different, however. For Hispanics and people who are Two or More Races, their high growth rates are largely the result of high rates of natural increase, given the relatively young age structures of these populations. For Asians, the driving force behind their growth is high net international migration.

Children

  • By 2020, less than half of children in the United States are projected to be non-Hispanic white alone (49.8 percent of the projected 73.9 million children under age 18). In comparison, about 72 percent of children are projected to be White alone, regardless of Hispanic origin.
  • The share of children who are Two or More Races is projected to more than double in coming decades, from 5.3 percent today to 11.3 percent in 2060.
  • The racial and ethnic composition of younger birth cohorts is expected to change more quickly than for older cohorts. In 2060, over one-third of children are projected to be non-Hispanic white alone compared with over one-half of older adults (36.5 percent compared with 55.1 percent, respectively).

Link to the Press Release

Online Mortgage Orginations Increase Part 2

Lowest Price Isn’t Always the Answer
J.D. Power cited that many things determine the buyer’s choice of lender, which does includes: price and rate. The lowest price doesn’t always win but rather what buyers are most likely to look for is the combination of trust in the brand and reasonable price. Faster is not always seen to be better. In some cases, customers are seeing a slower mortgage process, according to the J.D. Power 2017 U.S. Primary Mortgage Origination Satisfaction Study. This is affecting overall customer satisfaction.

The speed of processing often is slowed down by the customer, cites the J.D. Power 2017 U.S. Primary Mortgage Origination Satisfaction Study.

Other Findings
Overall satisfaction with primary mortgage originators is down 8 points (on a 1,000-point scale) in 2017. This is driven in part by reports of longer times from initial application to closing. On average, the purchasing process took 36 days this year, an increase of almost a week from 2016.

Representatives play a key role in building customer trust: Overall satisfaction among mortgage customers with high levels of trust in their loan representatives is 358 points higher than among those with low levels of trust. The top three elements driving that perception of trust are representatives always calling back when promised; continuity in working with a single representative throughout the process; and representatives proactively providing status updates.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.

Online Mortgage Originations Grow Part 1

A recent study conducted by J.D. Power, the 2017 J.D. Power U.S. Primary Mortgage Origination Study, showed, for the first time, refinance and purchase customers cited online/website as the most frequent method of submitting a mortgage application.

Even though it did not cross the 50% threshold, a total of 43% of mortgage customers reported applying digitally in 2017, which is up from 28% in 2016.

The J.D. Power study showed that there is a clear trend toward heavy tech development in the mortgage space.

In a different study, the J.D. Power 2017 U.S. Retail Banking Satisfaction Study, it found that more Americans than ever are now using digital banking:
49% of Millennials
31% of Gen Xers
16% of Baby Boomers

Customer satisfaction appears not to track exactly with the implementation of the digital platform. According to the press release put out by J.D. Power, “The mortgage industry’s promise of technology creating a faster and easier mortgage origination process does not appear to be fully recognized, as mortgage customers are reporting slower purchase processes.”

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.

New Jersey Foreclosures Hit 11 Year High

According to a recent ATTOM Data Solutions report, foreclosures in the State of New Jersey hit an 11-year high in 2017. This represented a foreclosure peak for the state’s crisis real estate industry. Yet, this also presents itself as an opportunity for those with the assets and ability to scoop up these distressed properties now coming to market.

The injection of listings will most likely be seen as timely for housing market.

There are a number of net effects from this wave of foreclosures, one of which is a growing number of displaced former homeowners originally from the lower- and middle-income brackets who are unable to get another mortgage, who are now being forced to rent.

Another trend that is emerging is that the experienced real estate investors, home flippers, are buying REOs, which is attracting other potential investors who believe that they will cash-in on the inventory squeeze.

There is another niche of professional investors who have been able to acquire these homes in bulk, which will convert into a solid cash-flow system. This inventory couldn’t come at a better time for the buyer-starved New Jersey home flippers who are looking to buy homes and convert them to rentals.

Investors flipped more than 207,000 single-family houses and condos in the U.S. last year.

The average flip generated gross returns of 50% in 2017, compared to 28% in 2006. Last year 35% of flippers financed their acquisitions, representing the highest share since 2008. This compares with the 63% who financed their flips in 2006.

In some ways, New Jersey has bucked the national trend, which is marked by bank repossessions nationwide falling to an 11-year low in 2017. The primary reason is attributed to New Jersey’s practice of “judicial foreclosure,” where foreclosures are handled through the court system, causing the process to be more advantageous to the owners who are in foreclosure.

Currently, New Jersey leads the nation with 1.61% of the state’s homes in foreclosure during 2017. In December, the number of new bank-owned homes nearly doubled to 2,308 from 1,448 in November.

The number of foreclosures is coming to the market at a time when the inventory of homes across the state is currently under the 6-month threshold, which is considered to be normal. In addition to the inventory shortage, buyers are entering the market with renewed vigor as demonstrated by January figures. Homes remained on the market for an average of 72 days, according to data from New Jersey Realtors, which is down from 86 days for the same month in 2017 and 94 days in January 2016.

Inventory Shortages Spurring Creation of Construction Jobs

According to the Bureau of Labor Statistics, of the 313,000 jobs created by the U.S. economy in February, the construction sector came out on top, resulting in 60,000 new jobs in February. The construction industry has added 185,000 jobs over the past four months.

The smashing Wall Street report continued to demonstrate that the U.S. is clearly in an economic recovery.

The Labor Report exceeded analyst expectations.

Job Gains Averaged 242,000 Over the Last 3 Months
“Job gains occurred in construction, retail trade, professional and business services, manufacturing, financial activities, and mining,” the Bureau of Labor Statistics said Friday in a release.

Average Workweek Increases
The average workweek for all employees rose with the average week increasing 0.1 hours to 34.5 hours in February, and even the number of manufacturing employees increasing by 0.2 hours on average.

Retail
Surprisingly, even the retail industry added 50,000 in February according to the recent report. This improvement is clearly reflects that even retail’s up-and-down numbers show that it is benefiting from the expanding economy. Within the industry, employment rose in general merchandise stores and in clothing stores.

The government explained that the retail space usually sees a swell in hiring and layoffs over the course of the holiday months, but that the industry is little changed over the whole period.

Financial Services
Financial services and businesses also posted positive results, up 28,000 and 50,000, respectively. Employment in insurance carriers, securities, commodities contracts and investments climbed.

Manufacturing
Manufacturing joined in the upward trend by adding 31,000 jobs in February and is up 224,000 over the past 12 months.

Information and Technology
The information industry, which includes telecommunications as well as non-internet broadcasting and publishing, fell by 12,000 jobs.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.

Mortgage Apps Don’t Tell the Whole Story

Expectation isn’t what drives markets, but rather investable assets, demand and supply.

Last week, the Mortgage Bankers Association [MBA] reported that mortgage applications for last week were flat. Well, considering the historic low inventory, the creeping upward trend of the markets and the fact that the eastern seaboard sustained a powerful Nor’easter, it is amazing that applications didn’t fall!

Even before spring starts, the hype about flat mortgage apps is ridiculous!

MBA stated, ” Mortgage applications increased 0.3% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 2, 2018.”

Volume was 5% lower than the same week from 2017.”The average loan amount on purchase applications, at $320,100, was the highest since November 2017, as supply constraints likely continued to weigh down lower dollar purchase transactions,” MBA economist Joel Kan said.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased slightly, but hit its highest level since January 2014 — 4.65%, from 4.64%. Points decreased to 0.58 from 0.63 — including the origination fee — for 80% loan-to-value ratio loans.

According to the MBA, homebuyers are less concerned about mortgage rates than they are about the inventory crisis, especially as it affects the entry-level home.

Low inventory across the nation continues to push home prices higher, with property values increasing 6.6% in January as compared to 2017.

The refinance share of mortgage activity remained unchanged from the previous week at 41.8% of total applications. The adjustable-rate mortgage (ARM) share of activity increased to 7.3% of total applications, its highest level since June 2017.

The FHA share of total applications decreased to 10.1% from 10.3% the week prior. The VA share of total applications decreased to 9.9% from 10.7% the week prior. The USDA share of total applications increased to 0.9% from 0.8% the week prior.

Homes with purchase prices that are less than 75%  of the local area median had price growth of 9% during 2017, according to CoreLogic analysts.

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