“In addition to the steady climb in [existing] home prices over the past year, it’s evident that the quick run-up in mortgage rates earlier this spring has had somewhat of a cooling effect on home sales,” said Lawrence Yun, Chief Economist for the National Association of Realtors® to the Daily Business News on MHProNews, via a release.
“This weakening in affordability has put the most pressure on would-be first-time buyers in recent months, who continue to represent only around a third of sales despite a very healthy economy and labor market,” Yun said.
He added, “Is it reasonable to expect changes in the two bugaboos? Not when important elements of the industry appear uncooperative with potential new lending money and new lender money still feels very uneasy with the reality of MH lending.”
The median existing-home price for all housing types in July was $269,600, up 4.5 percent from July 2017 ($258,100). July’s price increase marks the 77th straight month of year-over-year gains.
“In addition to the steady climb in home prices over the past year, it’s evident that the quick run-up in mortgage rates earlier this spring has had somewhat of a cooling effect on home sales,” said Yun. “This weakening in affordability has put the most pressure on would-be first-time buyers in recent months, who continue to represent only around a third of sales despite a very healthy economy and labor market.”
What Yun said is akin to what Redfin’s CEO Glenn Kelman said recently, see that book-end report, linked below.
“Listings continue to go under contract in under month, which highlights the feedback from Realtors® that buyers are swiftly snatching up moderately-priced properties,” Yun said. “Existing supply is still not at a healthy level, and new home construction is not keeping up to meet demand.”
It’s the last point that manufactured housing professionals should be laser focused on. While Bloomberg and NAR have recently, among others, provided positive news about the industry and its homes, that message has yet to break through in a robust way to the market.
Marty Lavin Sounds Off on Latest…
“Regarding the Bloomberg article, that is the 312th article since 1970 which has appeared, gotten the industry all puffed up, then little changed,” said Marty Lavin, JD, with a tongue in cheek hyperbole. For those who missed it, a look at the Bloomberg piece is found in the item below.
“At no point do they [Bloomberg] explain how the industry will overcome the twin bugaboos of the last 70 years:
1) Who and how will the homes be financed? and
2) Where will they be sited as most older home-sites are unattractive and declining in numbers and NIMBY reigns supreme in new locations, seemingly everywhere?”
“Is it reasonable to expect changes in the two bugaboos? Not when important elements of the industry appear uncooperative with potential new lending money and new lender money still feels very uneasy with the reality of MH lending.”
Lavin well knows the “GreenSeco” history from the late mid-to-late 1990s, and into the early 2000s, that were the excuse the GSEs held to regarding lending on manufactured home for years.
The fact that the industry’s two largest lenders failed to provided data to the GSEs they requested – and that other industry lenders provided – gave the GSEs an excuse to begin a toe in the water lending program. That could be part of what Lavin has in mind, who said also told MHProNews, “So the association [MHI] is not there for the “industry,” unless the interests of the Big Boys join the industry’s.”
Lavin Unload Continues…
“Still needed are substantial industry model changes to reach anywhere near the promise all see in the industry, but which the industry seems bent on avoiding. Note that the present MH model doesn’t mean some are not doing well. They are.”
“Questions remain, however, whether the obstructionist, being in prominent positions industry-wide, are prepared to bare their kimonos in an effort to boost the entire industry. Such has not been the case in the last 40 years.”
That’s about as scathing a rebuke that Lavin has given to date for those who are “obstructionist” in their moat-building behaviors. The MHI award winner, and long-time success story in retail and communities, has pointed a finger at MHI and their “big boy” brands that have pled and postured growth, but have failed to do what’s necessary to actually achieve growth.
For a prior Daily Business News item with additional quotes from Lavin on a related topic, see the related reports, linked below. “We Provide, You Decide.” © ## (News, analysis and commentary.)
(Third party images, content are provided under fair use guidelines.)
1) To sign up in seconds for our MH Industry leading emailed news updates, click here.
2) To provide a News Tips and/or Commentary, click the link to the left. Please note if comments are on-or-off the record, thank you.