US Real Estate and Housing Market: Mid-2016 Update

The latest data out of the US this week shows sales of new single-family homes likely grew at a rate of 530,000 units in June, up 8.6 per cent from a 488,000 annualized pace in May, the Mortgage Bankers Association said Thursday.

June’s estimated pace of sales was up 7 per cent from a year earlier, it said.

Without adjusting for seasonal factors, there were likely 47,000 new homes sold last month, unchanged from May, MBA said.

A spate of analysis and insight into the current US real estate and housing market conditions also came out this week.

US Real Estate and Housing Market: Mid-Year 2016

Are Housing Bubbles Re-Inflating?” asked RealtyTrac July 7.

A new report shows that a new threat is emerging for US housing, said ZeroHedge Thursday. Or rather, an old and very well-known one: house flipping by third party investors at auction is back with a vengeance. According to RealtyTrac, the share of foreclosures snapped up by third-party investors at auction just hit a record 31 per cent in June. This is a redux of the “same fervent speculation that pushed the housing bubble.”

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Elsewhere, according to Zillow Wednesday, the bottom third of the US housing market has grown increasingly competitive, as the number of first-time buyers rises, fuelled by affordable mortgage rates.

That demand is pushing up home values at the bot- tom of the market by roughly 8 per cent a year, said Zillow. On the other hand, home values for the most expensive homes on the market, which at one point in February 2014 were growing at an average of 7 per cent annually, have stabilised. Those homes have been gaining value at about 4 per cent each year since the start of 2015.

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Back to the RealtyTrac report, in it’s own assessment Bloomberg adds that the third-party investors are gaining a bigger share of a shrinking pie, as foreclosure auctions made up 8 per cent of all home sales in June, the lowest since August 2006. Meanwhile, institutional buyers made up about 38 per cent of those investor purchases at foreclosure auctions in June, down from a steady trend of around 50 per cent in the first five years of the expansion, the data show. They accounted for 2.5 per cent of all home purchases in June, down from a peak of 9.8 per cent in February 2013.


US Housing Market Real Estate Mania Redux

When it comes to the stock market, among the biggest relative strength leaders in the US broad market right now are the home builders and REITs, said Clif Droke on Market Oracle UK Wednesday. The US real estate sector is heating up and is also beginning to attract “hot money” inflows from foreign investors looking for a profitable safe haven. Real estate is building a measure of momentum not seen since before the 2008 credit crash. As such, the question as to whether a renewed property market mania is underway is a timely one and will now be addressed.