Data from the National Association of Realtors (NAR) shows that home sales continued their growth in December, as more buyers reached the market before the end of the year. The delayed closings resulting from the rollout of the “Know Before You Owe” initiative pushed a portion of November’s would-be transactions into the December figures.
Sales of existing homes rose 14.7 percent to a seasonally adjusted annual rate of 5.46 million in December from 4.76 million in November. After last month’s turnaround, which was the largest monthly increase ever recorded, sales are now up 7.7 percent above a year ago. The Daily Business News covered the record increase in a story linked here.
The increase caps off the best year of existing home saies since 2006.
“While the carryover of November’s delayed transactions into December contributed greatly to the sharp increase, the overall pace taken together indicates sales these last two months maintained the healthy level of activity seen in most of 2015,” said NAR chief economist Lawrence Yun.
“Additionally, the prospect of higher mortgage rates in coming months and warm November and December weather allowed more homes to close before the end of the year.”
The median existing-home price for all housing types in December was $224,100, an increase of 7.6 percent from December 2014. The price increase marks the 46th consecutive month of year-over-year gains.
Total housing inventory dropped 12.3 percent to 1.79 million existing homes available for sale, and is now 3.8 percent lower than a year ago.
Unsold inventory is at a 3.9-month supply at the current sales pace, down from 5.1 months in November and the lowest since January 2005.
“Although some growth is expected, the housing market will struggle in 2017 to replicate last year’s 7 percent increase in sales,” said Yun.
“In addition to insufficient supply levels, the overall pace of sales this year will be constricted by tepid economic expansion, rising mortgage rates and decreasing demand for buying in oil-producing metro areas.”
The percentage of first-time buyers was at 32 percent, matching an August high, up from 30 percent in November and 29 percent a year ago. First-time buyers in all of 2015 represented an average of 30 percent, up from 29 percent in both 2014 and 2013.
“First-time buyers were for the most part held back once again in 2015 by rising rents and home prices, competition from vacation and investment buyers and supply shortages,” said Yun.
“While these headwinds show little signs of abating, the cumulative effect of strong job growth in recent years and young renters’ overwhelming interest to own a home should lead to a modest uptick in first-time buyer activity in 2016.”
A recent MHLivingNews article covered a National Association of Realtors study, showing the millennial generation’s desire for quality affordable housing. That article is linked here.
A view from the MH Industry
The Manufactured Housing Institute (MHI) tells MHProNews that the industry is poised to experience its seventh consecutive year of growth.
While the final shipment numbers for 2016 are not yet available, MHI estimates place them close to the 80,000 mark, up from somewhere between 78,500 and 80,500.
If estimates are accurate, 2016 would be a double-digit growth year between 10-14 percent ahead of 2015.
MHI is working on obtaining more formal statistics from the Federal Emergency Management Agency to determine the final impact of FEMA units.
Conservative estimates for 2017 from MHI show that shipments will be in the 85,000-87,000 range, a 5 to 8 percent increase from 2016. If regulatory constraints are quickly lifted, then that number could rise.
“There are many unknowns as the US economy moves forward under a Trump Administration,” MHI shared.
“However, the new president’s ‘pro-business, less-regulation’ approach would seem to be in the favor of the manufactured housing industry.” ##
(Image credits are as shown above.)
Submitted by RC Williams to the Daily Business News for MHProNews.