We’re back for another look at what happened in real estate. We’ll go over the most important news and information you can share with your customers.
The big story
The big story of the month so far is that mortgage rates have hit again a new low record. I feel like I’ve been saying this so often lately that I’m going to start to sound like a broken record. However, the most important thing you and your clients need to know is that there will probably never be a better time to get a mortgage.
If you are a real estate agent, this should motivate you to strike while the iron is hot. It’s hard to imagine rates getting lower than they are now.
In addition, you have the opportunity to develop this relationship with former clients even if they are not looking for accommodation at the moment. If they haven’t refinanced in a while, it may be time to review their current rate to see if they can be in a better position.
News you can use
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Retail sales were down 1.1% across all crude all categories, but especially for the group that reads this report, building materials actually rose 1.1% in November. In addition, they are up 10.9% since February.
This is important, because it shows how strong the demand for housing and renovations is at this stage.
Housing market index
The housing market has been incredibly hot and it is only natural that at some point it will be taken off the boiler. With that in mind, homebuilder sentiment fell 4 points to 86 in December, but it remains the index’s second highest in 35 years of record keeping.
There were 4 point declines in each of the major components of the index. Current sales stand at 92. Meanwhile, sales over the next 6 months stand at 85. Finally, traffic from potential buyers visiting homes stood at 73.
New residential construction
The supply of housing is a major concern right now, as it is a very tight market. People struggle to find the home they want at an affordable price.
Completed construction is more likely to have an immediate impact on the market. Unfortunately here, deliveries are down 4.1% from October. However, single-family home completions declined only 0.6% to 879,000. Overall shipments were 1.163 million.
Missing out on construction which has just started, that figure rose 1.2% in November to 1.547 million. As for single-family homes, housing starts rose 0.4% to 1.181 million.
Turning finally to future construction permits, they are up 6.2% to 1.639 million. In addition, it is 8.5% above what they were last year. For the important single-family component, permits are up 1.3% to 1.128 million.
Gross Domestic Product (GDP)
GDP grew 33.4% overall in the third quarter, a significant rebound from virus-related shutdowns in the second quarter. Consumer spending rose 41% in final estimates.
However, if you really want to know how strong the housing market was in the third quarter, this might blow your mind. After falling 35.6% in the second quarter, third-quarter estimates of residential investment showed investment was up 63%.
There was a lot of pent-up demand after home orders were lifted in many parts of the country and it really shows here.
Sales of existing homes
At an annual rate of 6.69 million, existing home sales were down 2.5% from October, but up 25.8% from last November. Meanwhile, the median price of an existing home was $ 310,800, up 14.6% from a year ago.
The market remains tight. Nationally, the typical house sells in just 21 days from the time it is put on the market. There are only 2.3 months of existing homes available on the market at the current pace of sales.
Turning to regional data, sales in the Northeast declined 2.2% to 880,000 per year, which is a 25.7% increase over last year. The median price of an existing home rose 17.4% to $ 354,100 from a year ago at the same time.
Meanwhile, in the Midwest, the annual sales rate was 1.59 million, down 2.5% but up 24.2% from a year ago. The median price of a new home was $ 239,100, up 14.6% for the year.
In the South, sales fell 3.8% to 2.82 million, 25.9% more than last year at the same time. Prices rose 15% to $ 270,000.
Finally, sales in the West are up 27.3% compared to 201.4 million after remaining stable over the month. The average home price rose 13.8% for the year to $ 467,600.
FHFA House Price Index
Overall, home prices rose 1.5% in October and 10.2% since last October. There was a large variation across regions from a 0.9% gain in the south-central and south-central regions to a 2.1% gain in New England. Annual earnings were between 8.4% and 12.5%.
New home sales
There was an 11% decrease in the pace of new home sales to an annual rate of 841,000. However, this is 20.8% above what the numbers were in November 2019. Meanwhile, there were 286,000 new homes for sale and 4.1 months of supply on the market. The median price of a home was $ 335,300 compared to $ 328,000 in November of last year.
Case-Shiller Home Price Index
The average price of a home in the 20 cities measured was up 1.6% on a seasonally adjusted basis in October. By removing this adjustment, prices rose 1.3% and increased 7.9% over the year. These numbers represent a 3-month moving average.
Pending Home Sales Index
Pending home sales were down 2.6% and settled to an index level of 125.7 in November. The number of homes under contract for sale is a leading indicator of existing home sales in the coming month.
The average rate on a 30-year fixed mortgage with 0.7 points of fees paid fell a few basis points to 2.65%, assuming a 20% down payment. This represents a new record and fell 3.64% last year around the same time.
Meanwhile, the average rate on a 15-year short-term fixed mortgage with 0.6 point paid and the same down payment fell one basis point to 2.16% and fell 3.07%. Last year.
Now that you have the knowledge, go share with your customers. For even more tips, tricks and resources, check out Rocket ProSM Overview.
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