The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, reported an 18% annual gain in June, down from 19.9% in May. The 10-City Composite and 20-City Composite annual indices both posted increases lower than the previous month in June, at 17.4% and 18.6% year-over-year growth, respectively.

“Year-over-year deceleration in home price growth, like we saw in today’s home price report, needs to keep happening for the coming months,” says Zonda chief economist Ali Wolf. “The rapid rise in home prices over the past couple years combined with higher mortgage rates have pushed buyers to their limit. Slowing home price growth is critical for a more healthy and sustainable housing market.”

According to the index, Tampa, Florida (+35%), Miami (+33%), and Dallas (+28.2%) reported the highest year-over-year gains in home prices among the 20 cities analyzed in June. Only one of the 20 cities, Chicago, reported higher price increases in the year ending June 2022 compared with the year ending May 2022.

“Relative to May’s 19.9% gain (and April’s 20.6%), prices are clearly increasing at a slower rate,” says Craig Lazzara, managing director at S&P Dow Jones Indices. “This pattern is consistent with our 10-City Composite (up 17.4% in June vs. 19.1% in May) and our 20-City Composite (up 18.6% in June vs. 20.5% in May). It’s important to bear in mind that deceleration and decline are two entirely different things, and that prices are still rising at a robust clip.”

According to Lazzara, June’s growth rate for all three composite indices are “at or above the 95th percentile of historical experience.” The 10.6% year-to-date increase in the National Composite index is the fifth largest increase during the same period in the last 35 years.

Before seasonal adjustment, the U.S. National Index posted a 0.6% month-over-month increase in June, while the 10-City and 20-City Composites both posted increases of 0.4%. Thirteen cities reported price increases before and after seasonal adjustments on a month-over-month basis.

“We’ve noted previously that mortgage financing has become more expensive as the Federal Reserve ratchets up interest rates, a process that continued as our June data were gathered,” Lazzara says. “As the macroeconomic environment continues to be challenging, home prices may well continue to decelerate.”

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builderonline.com/data-analysis/

• Existing-home sales declined for the fourth straight month to a seasonally adjusted annual rate of 5.41 million. Sales were down 3.4% from April and 8.6% from one year ago.
• At $407,600, the median existing-home sales price exceeded $400,000 for the first time and represents a 14.8% increase from one year ago.
• The inventory of unsold existing homes rose to 1.16 million by the end of May, or the equivalent of 2.6 months at the current monthly sales pace.

WASHINGTON (June 21, 2022) – Existing-home sales retreated for the fourth consecutive month in May, according to the National Association of Realtors®. Month-over-month sales declined in three out of four major U.S. regions, while year-over-year sales slipped in all four regions.

Total existing-home sales,¹ https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 3.4% from April to a seasonally adjusted annual rate of 5.41 million in May. Year-over-year, sales receded 8.6% (5.92 million in May 2021).

“Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance,” said NAR Chief Economist Lawrence Yun. “Also, the market movements of single-family and condominium sales are nearly equal, possibly implying that the preference towards suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions.”

Total housing inventory² registered at the end of May was 1,160,000 units, an increase of 12.6% from April and a 4.1% decline from the previous year (1.21 million). Unsold inventory sits at a 2.6-month supply at the current sales pace, up from 2.2 months in April and 2.5 months in May 2021.

“Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year,” Yun added. “Nonetheless, homes priced appropriately are selling quickly and inventory levels still need to rise substantially – almost doubling – to cool home price appreciation and provide more options for home buyers.”

The median existing-home price⁵ for all housing types in May was $407,600, up 14.8% from May 2021 ($355,000), as prices increased in all regions. This marks 123 consecutive months of year-over-year increases, the longest-running streak on record.

Properties typically remained on the market for 16 days in May, down from 17 days in April and 17 days in May 2021. Eighty-eight percent of homes sold in May 2022 were on the market for less than a month.

First-time buyers were responsible for 27% of sales in May, down from 28% in April and down from 31% in May 2021. NAR’s 2021 Profile of Home Buyers and Sellers – released in late 2021⁴ – reported that the annual share of first-time buyers was 34%.

All-cash sales accounted for 25% of transactions in May, down from 26% in April and up from 23% recorded in May 2021.

Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in May, down from 17% in April and 17% in May 2021.

Distressed sales⁵ – foreclosures and short sales – represented less than 1% of sales in May, essentially unchanged from April 2022 and May 2021.

According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage was 5.23% in May, up from 4.98% in April. The average commitment rate across all of 2021 was 2.96%.

Realtor.com®’s Market Trends Report(link is external) in May shows that the largest year-over-year median list price growth occurred in Miami (+45.9%), Nashville (+32.5%), and Orlando (+32.4%). Austin reported the highest growth in the share of homes that had their prices reduced compared to last year (+14.7 percentage points), followed by Las Vegas (+12.3 percentage points) and Phoenix (+11.6 percentage points).

Single-family and Condo/Co-op Sales

Single-family home sales declined to a seasonally adjusted annual rate of 4.80 million in May, down 3.6% from 4.98 million in April and down 7.7% from one year ago. The median existing single-family home price was $414,200 in May, up 14.6% from May 2021.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 610,000 units in May, down 1.6% from April and down 15.3% from one year ago. The median existing condo price was $355,700 in May, an annual increase of 14.8%.

“Declining home purchases means more people are renting, and the resulting rent price escalation may spur more institutional investors to buy single-family homes and turn them into rental properties – placing additional financial strain on prospective first-time homebuyers,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “To counter this trend, policymakers should consider incentivizing an inventory release to the market by temporarily lowering capital gains taxes for mom-and-pop investors to sell to first-time buyers.”

Regional Breakdown

Existing-home sales in the Northeast climbed 1.5% in May to an annual rate of 680,000, falling 9.3% from May 2021. The median price in the Northeast was $409,700, a 6.7% rise from one year ago.

Existing-home sales in the Midwest dropped 5.3% from the previous month to an annual rate of 1,240,000 in May, slumping 7.5% from May 2021. The median price in the Midwest was $294,500, up 9.5% from one year before.

Existing-home sales in the South declined 2.8% in May to an annual rate of 2,410,000, down 8.4% from the previous year. The median price in the South was $375,000, a 20.6% jump from one year ago. For the ninth consecutive month, the South recorded the highest pace of price appreciation in comparison to the other three regions.

Existing-home sales in the West slid 5.3% compared to the month before to an annual rate of 1,080,000 in May, down 10.0% from this time last year. The median price in the West was $633,800, an increase of 13.3% from May 2021.

The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.

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For local information, please contact the local association of Realtors® for data from local multiple listing services (MLS). Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

NOTE: NAR’s Pending Home Sales Index for May is scheduled for release on June 27, and Existing-Home Sales for June will be released on July 20. Release times are 10 a.m. Eastern.

¹ Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

² Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).

³ The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

⁴ Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.

⁵ Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at nar.realtor.

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nar.realtor/newsroom/

In a further sign of a housing slowdown, new home sales posted a double-digit percentage decline in April, falling to their weakest pace in two years, as rising mortgage interest rates and worsening affordability conditions continue to take a toll on the housing market.

Sales of newly built, single-family homes in April fell 16.6% to a 591,000 seasonally adjusted annual rate from a downwardly revised reading in March, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. New home sales are down 26.9% compared to April 2021.

“The volume of signed sales contracts significantly declined in April as the cost of purchasing a home increased in 2022 as interest rates surged higher,” said Jerry Konter, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Savannah, Ga. “Higher construction costs fueled by rising material prices and supply-side constraints along with limited existing home inventory are pricing many potential home buyers out of the market.”

In another indicator that deteriorating affordability conditions are particularly hurting the entry-level market, a year ago, 25% of new home sales were priced below $300,000, while in April this share fell to just 10%.

“The April drop for new home sales is a clear recession warning,” said NAHB Chief Economist Robert Dietz. “The median price of a newly-built single-family home increased 19.7% year-over-year. The combination of higher prices and increased interest rates are generating a notable slowing of the housing market. While the nation needs additional housing, home sales are slackening as tightening monetary policy continues to put upward pressure on mortgage rates and supply chain disruptions raise construction costs.”

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the April reading of 591,000 units is the number of homes that would sell if this pace continued for the next 12 months. 

In an indication that builders will be slowing construction, new single-family home inventory jumped to a 9 months’ supply, up 40% over last year, with 444,000 available for sale. However, just 38,000 of those are completed and ready to occupy.

The median sales price rose to $450,600 in April from $435,000 in March and is up more than 19% compared to a year ago, due primarily to higher development costs, including materials.

Regionally, on a year-to-date basis, new home sales fell in three regions, down 16.8% in the Midwest, 19.3% in the South and 0.6% in the West. New home sales were up 6.5% in the Northeast.

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nahb.org

Fueled by low mortgage interest rates and strong demand, existing home sales increased for a third straight month in November, according to the National Association of Realtors (NAR). However, supply has continued to lag due to ongoing supply-chain disruptions, keeping home price elevated and pricing out first-time and young buyers.

Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, rose 1.9% to a seasonally adjusted annual rate of 6.46 million in November, the highest level since January. However, on a year-over-year basis, sales were 2.0% lower than a year ago, the fourth annual decline since August 2020.

The first-time buyer share fell to 26% in November, down from 29% in October and down from 32% a year ago. The November inventory level declined from 1.23 to 1.11 million units and is still down from 1.28 million units a year ago.

At the current sales rate, November unsold inventory sits at a 2.1-month supply, down from 2.3 month both last month and a year ago. This low supply of resale homes is good news for home construction.

Homes stayed on the market for an average of just 18 days in November, to the same as October and down from 21 days a year ago. In November, 83% of homes sold were on the market for less than a month.

The November all-cash sales share was 24% of transactions, equal to October’s share and up from 20% a year ago.

Tight supply continues to push up home prices. The November median sales price of all existing homes was $353,900, up 13.9% from a year ago, representing the 117^th consecutive month of year-over-year increases, the longest-running streak on record. The median existing condominium/co-op price of $283,200 in November was up 4.4% from a year ago.

Geographically, three of four regions saw an increase in existing home sales in November, ranging from 0.7% in the Midwest to 2.9% in the South. Sales in the Northeast remained flat in November. On a year-over-year basis, however, sales declined in three major regions, ranging from 0.7% in the Midwest to 11.6% in the Northeast.

Meanwhile, the Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI increased 7.5% from 116.5 to 125.2 in October. On a year-over-year basis, sales were 1.4% lower than a year ago per the NAR data.

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eyeonhousing.org

Since July 2021, the city has gained an estimated 6,332 permanent movers, indicating a gradual return to New York City.

Residents who fled New York City during the early days of the pandemic, particularly the wealthiest neighborhoods, are beginning to return.

New York City Comptroller Scott Stringer released a comprehensive analysis earlier this week (Nov. 15) of the pandemic’s impact on monthly migration patterns into and out of the city. Using data published by the United States Postal Service (USPS) from change of address forms, the analysis confirms that New York City’s net residential out-migration tripled from 2019 to 2020. The data show that the city’s wealthiest neighborhoods experienced the most population loss; residents in the wealthiest 10% of city neighborhoods, as measured by median income, were 4.6 times more likely to move than other residents during 2020.

In more recent months, the reopening of office buildings, the return of in-person school, and the rebirth of arts and entertainment have helped to attract movers to the city. Since July 2021, USPS data has shown an estimated net gain of 6,332 permanent movers, mainly in neighborhoods that experienced the greatest flight, according to the report.

“New York City is steadily reopening and New Yorkers are returning to the city we love—that’s why it’s vital that we invest in the value proposition that is New York City and make sure we continue to be the best place to live, work, and raise a family,” said New York City Comptroller Stringer. “That means investing in our classrooms and teachers so our children get the very best education, investing in affordable and accessible child care so parents can return to work, and investing in our streetscapes and green spaces to ensure that our neighborhoods are walkable and breathable. We have a once-in-a-generation opportunity to reimagine our city and build back stronger than ever from the losses of the pandemic.”

Despite recent gains, certain neighborhoods have a long road ahead to regain pre-pandemic population. Whether or not these gains continue and accelerate will depend on the trajectory of the pandemic and the city’s ability to maintain in-person activities and attractions, as well as the endurance of telework arrangements and workers’ ability and desire to live farther from their place of work as commuting becomes less burdensome.

Major findings of the analysis include:

• In the first three months of the pandemic, from March to May 2020, more than 60% of net moves from city addresses were marked as temporary, indicating that the person or household intended to return, but since then 79% of net moves have been marked as permanent.

• Excluding moves marked as “temporary,” net out-migration from the city increased by an estimated 130,837 from March 2020 through June 2021, as compared to pre-pandemic trends.

• Residents from the city’s wealthiest neighborhoods were the most likely to leave. Residents in the wealthiest 10% of city neighborhoods, as measured by median income, were 4.6 times more likely to leave than other residents during 2020, recording 109 net move-outs per 1,000 residents vs 24 elsewhere. Moves from wealthier neighborhoods were also more likely to be recorded as temporary. About half of net out-migration from the wealthiest 10% of neighborhoods was marked as temporary in 2020, compared to 44% in the next wealthiest decile and less than 30% elsewhere.

• In September 2021, New York City public schools and colleges opened to full-time, in-person learning; some employers, including city government, called office workers back; and the curtains rose on Broadway after an 18-month shutdown. Not surprisingly, these events coincided with an improvement in net residential migration to the city, particularly in the neighborhoods that experienced the greatest flight in the spring of 2020.

• Since July 2021, USPS data has shown an estimated net gain of 6,332 permanent movers, indicating a gradual return to New York City, mainly in neighborhoods that experienced the greatest flight. On a per-capita basis, the largest net gains over the summer were in Chelsea/Midtown, Murray Hill/Gramercy, Battery Park City/Greenwich Village, and Chinatown/Lower East Side.

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realestateindepth.com/news/

S&P Dow Jones Indices (S&P DJI) today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for August 2021 show that home prices continue to increase across the U.S. More than 27 years of history are available for the data series and can be accessed in full by going to https://www.spglobal.com/spdji/.

YEAR-OVER-YEAR 

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 19.8% annual gain in August, remaining the same as the previous month. The 10-City Composite annual increase came in at 18.6%, down from 19.2% in the previous month. The 20-City Composite posted a 19.7% year-over-year gain, down from 20.0% in the previous month.

Phoenix, San Diego, and Tampa reported the highest year-over-year gains among the 20 cities in August. Phoenix led the way with a 33.3% year-over-year price increase, followed by San Diego with a 26.2% increase and Tampa with a 25.9% increase. Eight of the 20 cities reported higher price increases in the year ending August 2021 versus the year ending July 2021. 

MONTH-OVER-MONTH

Before seasonal adjustment, the U.S. National Index posted a 1.2% month-over-month increase in August, while the 10-City and 20-City Composites both posted increases of 0.8% and 0.9%, respectively.

After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.4%, and the 10-City and 20-City Composites both posted increases of 0.9% and 1.2%, respectively. In August, all 20 cities reported increases before and after seasonal adjustments.

ANALYSIS

“The U.S. housing market showed continuing strength in August 2021,” says Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. Every one of our city and composite indices stands at its all-time high, and year-over-year price growth continues to be very strong, although moderating somewhat from last month’s levels.

“In August 2021, the National Composite Index rose 19.84% from year-ago levels, marginally ahead of July’s 19.75% increase. This slowing acceleration was also evident in our 10- and 20-City Composites, which rose 18.6% and 19.7% respectively, modestly less than their rates of gain in July. Price gains were once again broadly distributed, as all 20 cities rose, although in most cases at a slower rate than had been the case a month ago.

“We have previously suggested that the strength in the U.S. housing market is being driven in part by a reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. More data will be required to understand whether this demand surge represents an acceleration of purchases that would have occurred anyway over the next several years, or reflects a secular change in locational preferences. August’s data are consistent with either explanation. August data also suggest that the growth in housing prices, while still very strong, may be beginning to decelerate.

“Phoenix’s 33.3% increase led all cities for the 27^th consecutive month. San Diego (+26.2%) continued in second place, but in August, Tampa (+25.9%) edged Dallas and Seattle for the bronze medal. As has been the case for the last several months, prices were strongest in the Southwest (+24.1%), but every region logged double-digit gains.”

SUPPORTING DATA 

Table 1 below shows the housing boom/bust peaks and troughs for the three composites along with the current levels and percentage changes from the peaks and troughs.

Table 2 below summarizes the results for August 2021. The S&P CoreLogic Case-Shiller Indices could be revised for the prior 24 months, based on the receipt of additional source data.

Table 3 below shows a summary of the monthly changes using the seasonally adjusted (SA) and non-seasonally adjusted (NSA) data. Since its launch in early 2006, the S&P CoreLogic Case-Shiller Indices have published, and the markets have followed and reported on, the non-seasonally adjusted data set used in the headline indices. For analytical purposes, S&P Dow Jones Indices publishes a seasonally adjusted data set covered in the headline indices, as well as for the 17 of 20 markets with tiered price indices and the five condo markets that are tracked.

For more information about S&P Dow Jones Indices, please visit https://www.spglobal.com/spdji/.

Freddie Mac today released the results of its Primary Mortgage Market Survey^® (PMMS^®), showing that the 30-year fixed-rate mortgage (FRM) averaged 3.09 percent.

“As expected, mortgage rates continued to inch up but are still hovering around three percent, keeping interested buyers in the market,” said Sam Khater, Freddie Mac’s Chief Economist. “However, residential construction has declined for two consecutive months and given the very low inventory environment, competition among potential homebuyers is a challenging reality, especially for first-time homebuyers.”

News Facts

• 30-year fixed-rate mortgage averaged 3.09 percent with an average 0.7 point for the week ending March 18, 2021, up from last week when it averaged 3.05 percent. A year ago at this time, the 30-year FRM averaged 3.65 percent.
• 15-year fixed-rate mortgage averaged 2.40 percent with an average 0.7 point, up from last week when it averaged 2.38 percent. A year ago at this time, the 15-year FRM averaged 3.06 percent.
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.79 percent with an average 0.3 point, up from last week when it averaged 2.77 percent. A year ago at this time, the 5-year ARM averaged 3.11 percent.

The PMMS is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.