The US housing market keeps slowing down, with January having marked the sixth consecutive month of declining sales. US existing home sales fell -1.2% in January to their worst pace in more than three years, said the National Association of Realtors® (NAR) Thursday, as persistent affordability problems have put a harsh chill in the real estate market. Sales of existing homes in the US declined to a seasonally adjusted annual rate of 4.94 million last month, a decline from 5.273 million in 3Q, and -7.4% lower than the 5.593 million-pace during 4Q 2017. It is also the slowest sales rate since November 2015. During the past 12 months, sales have plunged -8.5%.
Would-be homebuyers are increasingly priced out of the market as years of climbing prices and strained inventories have made ownership too costly.
A solid job market has done little to boost sales, with the sharpest annual sales declines being among homes priced less than US$250,000. Still, buyers may find some relief as average mortgage rates have declined this year and price growth has slowed. The median sales price in January was US$247,500, a slight increase of +2.8% from last year.
After eclipsing wage gains for several years, home prices in this report are now increasing at a slower rate than average hourly earnings. The average homes-for-sale supply during 4Q was 4.0 months, which is up from 3.5 months in 4Q 2017
At the end of 4Q 2018, there were 1.55 million existing homes available for sale, a +6.2% improvement over the 1.46 million homes for sale at the end of 4Q 2017.
US National Association of Realtors
The NAR detailed that US homes-for-sale inventory increased and metro market prices rose at a slower pace in 4Q 2018. The national median existing single-family home price in the quarter was US$257,600, up +4% from 4Q 2017, when it was US$247,800. Single-family home prices increased in 92 percent of measured markets last quarter, with 163 out of 178 metropolitan statistical areas showing sales price gains in 4Q compared to a year ago. Fourteen metro areas, or 8 percent, experienced double-digit increases, down from 18 in 3Q 2018.
Homes are sitting on the market longer, causing inventories to rise. Properties stayed on the market for an average of 49 days, up from 42 a year ago. The number of homes for sale has risen to 1.59 million from 1.52 million a year ago, yet inventories are still tight compared to historic averages
Some other very interesting data for home builders and construction material suppliers was released by the US Bureau of Labor Statistics February 13, showing prices for US housing were +55% higher in 2019 versus 2000.
The data shows a US$54,818.81 difference in value. Between 2000 and 2019, US housing experienced an average inflation rate of +2.33% per year.
Housing costing US$100,000 in the year 2000 would cost US$154,819 in 2019 for an equivalent purchase. Compared to the overall inflation rate of +2.02% during this same period, inflation for housing was higher.
US Bureau of Labor Statistics via Official Data Foundation http://www.in2013dollars.com/Housing/price-inflation
In the year 2000, US house pricing changed by +3.5%, which is above the average yearly change for housing during the 2000-2019 time period. Compared to inflation for all items in 2000, at +3.4%, inflation for housing was higher
Yet more new data, released Tuesday by Redfin, shows the median US home sale price in January increased +2.9% from January 2018, while the number of houses listed for sales rose +6.3%.
Redfin
The number of homes newly listed for sale in January rose +4.4% from a year earlier, helping to push the total number of homes for sale up +6.3%, the biggest supply increase since May of 2015. While prices and the number of available homes continue to rise, the number of houses sold remained down for the sixth consecutive month, falling in 57 of Redfin’s 81 metro areas, which is a -7.6% nationally from January 2018.
As if this seemingly contradictory data isn’t confusing enough, the United States has a housing shortage said MarketWatch February 14. In 2017, there were 1.25 million new housing units in the country, yet the US requires 1.62 million houses each year. The shortfall of 370,000 units puts intense upwards pressure on home prices, which increased +5.1% in November 2018 versus a year previously.
This trend is being felt across the country. FULL STORY https://www.marketwatch.com/story/3-reasons-why-the-housing-market-isnt-as-strong-as-it-seems-2019-02-14