US property prices up year on year for 16th month in a row
Existing home prices in the United States have increased by 13.5% in the last 12 months, according to the latest data from the National Association of Realtors. It is the seventh month in a row of double digit year on year increases, taking the national median existing home price for all housing types to $214,200.
There have also been 16 consecutive months of year on year price increases, which last occurred from February 2005 to May 2006. Some owners who were hurt by the downturn are now in the market according to NAR President Gary Thomas. ‘Rising values have improved the position of home owners and 16% of realtors surveyed in June report they worked with a client that previously had an underwater mortgage,’ he pointed out.
Of those previously underwater owners, 53% were planning to buy another home and 22% intend to rent, but 25% weren’t sure what they’d do. ‘Also 47% of realtors report they have potential sellers who are waiting for additional price appreciation before they sell,’ added Thomas. Although existing home sales declined in June they have stayed well above year ago levels for the past two years. Total sales fell by 1.2% to a seasonally adjusted annual rate of 5.08 million in June from a downwardly revised 5.14 million in May, but are 15.2% higher than the 4.41 million unit level in June 2012.
Quote from PropertyCommunity.com : “Sales of homes to international buyers in the United States have reached their second highest level, according to the latest data from the National Association of Realtors. The association’s 2013 Profile of International Home Buying Activity shows that sales to overseas buyers now amount to 6% of total existing home sales.”
Regionally, existing home sales in the Northeast declined 1.6% to an annual rate of 630,000 in June but are 16.7% above June 2012. The median price in the Northeast was $270,400, which is 6.8% above a year ago. Existing home sales in the Midwest were unchanged in June at a pace of 1.21 million and are 17.5% higher than a year ago. The median price in the Midwest was $170,100, up 8.9% from June 2012.
In the South, existing home sales fell by 1.5% to an annual level of 2.03 million in June but are 16% above June 2012. The median price in the South was $186,300 which is 13.7% above a year ago. Existing home sales in the West fell 1.6% to a pace of 1.21 million in June but are 11% above a year ago. With ongoing supply constraints, the median price in the West was $282,000, a jump of 19.9% from June 2012.
NAR chief economist Lawrence Yun said that there is enough momentum in the market, even with higher interest rates. ‘Affordability conditions remain favourable in most of the country, and we’re still dealing with a large pent up demand. However, higher mortgage interest rates will bite into high cost regions of California, Hawaii and the New York City metro area market,’ he explained. According to Freddie Mac, the national average commitment rate for a 30 year, conventional, fixed rate mortgage rose to 4.07% in June from 3.54% in May and is the highest since October 2011 when it was also 4.07%. This compared with 3.68% in June 2012.
Total housing inventory at the end of June rose 1.9% to 2.19 million existing homes available for sale, which represents a 5.2 month supply at the current sales pace. This is up from five months in May although listed inventory remains 7.6% below a year ago, when there was a 6.4 month supply.
‘Inventory conditions will continue to broadly favour sellers and contribute to above normal price growth,’ Yun pointed out.