Number of First-Time Home Buyers Growing in USA
Over the last 12 months, the number of new homeowners has grown to over 12 million. Pending contracts (home purchases waiting to close) has grown substantially which according to NAR Chief Economist, Lawrence Yun is a “very good indication that more and more people are taking advantage of the low mortgage interest rates”.
The median house price went up to an all-time high of $285,700 in June 2019 from $278,200 in May and $277,700 twelve months prior. Although the pace at which housing is appreciating is slowing down slightly.
Nationally, inventory remains short of normal levels at four months. The normal level is generally six months of supply. In June, 56% of homes sold in under 30 days. The lack of inventory is forcing many would-be homeowners into rental units. New construction is struggling to keep pace.
Monthly rental rates are still rising at a 4-5% rate annually, far exceeding wage increase rates. Rental availability is extremely low. It seems that the low housing inventory seems to be forcing people to rent not by choice but out of necessity.
Freddie Mac also announced the 30-year fixed-rate mortgage rate fell to its lowest level in three years.
- The share of Americans who say it is a good time to buy a home increased from the same time last year.
- The share of those who say it is a good time to sell a home increased from the same time last year.
- The share of Americans who say they are not concerned about losing their job over the next 12 months increased dramatically (16 percentage points) from the same time last year.
- The share of Americans who say mortgage rates will go down over the next 12 months increased dramatically (24 percentage points) from the same time last year.
How Much Should You List For?
Maybe it’s time to make a change. Wondering how much you can list your house for sale? The best way to do that is to look at the numbers. A Realtor will look at your home, take note of all improvements and the condition of the house as well as it’s location and any other features it has to offer.
This is why it’s so important to have a local Realtor come to your property and see it for themselves. Using this information, they’ll be better able to compare your property with what’s currently listed for sale, what’s sold recently in your area and which ones have failed to sell and at what price. There’s a lot that goes into this type of report. However, if you’d like to get a pretty good price range along with a list of active homes for sale in your area, click to visit my “How Much?” page.
- Existing Home Sales dropped 1.7% from May to a seasonally adjusted annual rate of 5.27 million in June.
- Low inventory levels are still a factor in the market. The current supply of homes for sale is at 4.4 months, which is less than the optimal 6-month supply.
- Median home prices were up 4.3% from June 2018, hitting $285,700. This marked the 88th consecutive month with year-over-year price gains.
Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae explained the uptick in the index:
“Consumer job confidence and favorable mortgage rate expectations lifted the HPSI to a new survey high in July, despite ongoing housing supply and affordability challenges. Consumers appear to have shaken off a winter slump in sentiment amid strong income gains. Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category.”
Generally, the “affordable category” comprises of homes in the low to mid $200,000 range which is appealing to new first-time homeowners. The demand for new affordable housing is high but the number of existing homes coming on the market isn’t keeping up with the demand. This will keep home prices rising for the time being.
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