Pending Home Sales Slip, Trampled by West

For the housing market, gaining ground is proving to be a struggle.

On an annual basis—and for the eighth month in a row—pending home sales slipped, according to the August National Association of REALTORS® (NAR) Pending Home Sales Index (PHSI). Activity backtracked 1.8 percent month-over-month and 2.3 percent year-over-year.

According to the Index, activity contracted in all of the regions in the U.S. In the Midwest, activity declined 0.5 percent from July, and 1.1 percent from the prior year; in the Northeast, activity decreased 1.3 percent from July, and 1.6 percent from the prior year; in the South, activity dipped 0.7 percent from July, but rose 1.3 percent from the prior year; and in the West, activity fell 5.8 percent from July, and 11.3 percent from the prior year.

NAR_Pending_Aug18

“Pending home sales continued a slow drip downward, with the fourth month-over-month decline in the past five months,” says Lawrence Yun, chief economist at NAR. “Contract signings also fell backward again last month, as declines in the West negatively impacted overall activity. The greatest decline occurred in the West region, where prices have shot up significantly, which clearly indicates that affordability is hindering buyers—and those affordability issues come from lack of inventory, particularly in moderate price points.”

The good news? Yun anticipates relief—but at what point is uncertain.

“With prices having risen so quickly, many consumers were deciding to wait to list their homes hoping to see additional price and equity gains; however, with indications that buyers are beginning to pull out, price gains are going to decelerate and potential sellers are considering that now is a good time to list and bring more properties to the market,” Yun says.

Additionally, while affordability is being constrained by increasing rates, advancements on the employment front could offset the pressure.

“We have two opposing factors affecting the market: the negative impact of rising mortgage rates and the positive impact of continued job creation,” says Yun. “This should lead to future homes sales staying fairly neutral. As long as there is job growth, rising mortgage rates will hinder some buyers—but job creation means second or third incomes being added to households, which gives consumers the financial confidence to go out and make a home purchase.”

For more information, please visit www.nar.realtor. The post Pending Home Sales Slip, Trampled by West appeared first on RISMedia.

 

Brought you San Diego Real Estate Agent and Real Estate Broker, Glen Henderson.  Glen has been a San Diego Realtor for 15 years and has been involved in over 1,000 home sales throughout San Diego County.  Contact him today with any questions at 619-500-3222 or visit Premier Homes at www.MyPremierHomes.com

If you would like to Search Houses for Sale in San Diego, visit www.GreaterSanDiegoAreaHomes.com

Appraisers and Homeowners Sync Up on Value

Appraisers and homeowners are syncing up on value, with appraisals in April just 0.33 percent below what homeowners predicted, according to the Quicken Loans National Home Price Perception Index (HPPI). The Quicken Loans National Home Value Index (HVI) shows appraised values rose 6.47 percent year-over-year.

QL_HPPI_May

The findings indicate homeowners are less likely to get a rude awakening when going through mortgage process; it is the closest the national appraiser and owner opinions have been in more than three years.

“The appraisal is one of the most important, although sometimes least predictable, parts of the mortgage process,” says Bill Banfield, executive vice president of Capital Markets at Quicken Loans. “The Home Price Perception Index is a way to illustrate the differences of opinion, and these differences affect everything from the type of mortgage a borrower can get to the expectations a seller has about the proceeds available upon sale of their home.”

Homeowner opinions are also improving when viewed locally. Less than 20 percent of the areas measured have appraisal values lower than estimated. San Jose is leading the way, with the average appraisal 2.75 percent higher than expected, and Chicago is trailing all cities, with appraisals an average of 1.68 percent lower than estimated. Only five of the 27 metro areas observed in the HPPI reported appraisals lower than what owners estimated.

While they are more in line with what owners expected, home values are continuing their ascent over last year’s level. The HVI reported a healthy 6.47 percent year-over-year increase, despite near-stagnant monthly change, with a 0.05 percent dip in home values since March. The HVI was pulled into the negative by the Northeast—the only region showing a decrease in home value, at a 1.24 percent decline. The Northeast was still the lowest when reviewing annual changes; however, all regions were positive, ranging from the Northeast’s 2.22 percent growth to the 9.44 percent jump in the West.

“The skyrocketing home values in the West is a trend with no end in sight,” Banfield says. “Until home-building pace picks up, in combination with more existing homes being listed for sale, affordability will continue to wane. The other regions of the country are showing annual price gains as well, but at a more moderate pace. Time will tell if the slightly higher interest rates in 2018 start to slow demand, or if the inventory shortage ends up being a larger contributor to price changes.”

For more information, please visit QuickenLoans.com/Indexes.

The post Appraisers and Homeowners Sync Up on Value appeared first on RISMedia.

Brought you San Diego Real Estate Agent and Real Estate Broker, Glen Henderson.  Glen has been a San Diego Realtor for 15 years and has been involved in over 1,000 home sales throughout San Diego County.  Contact him today with any questions at 619-500-3222 or visit Premier Homes at www.MyPremierHomes.com

If you would like to Search Houses for Sale in San Diego, visit www.GreaterSanDiegoAreaHomes.com