The seasonally adjusted pace of existing-home sales in the U.S. ticked up 1.8 percent to an annual rate of 5.53 million sales in May, 4.5 percent higher versus the same time last year and the highest annual pace since February 2007. And the median sale price of $239,700 was an all-time high, up 4.7 on a year-over-year basis and surpassing the previous record median sale price of $236,300 set last June.
In terms of inventory, the number of unsold homes on the market across the country increased 1.4 percent to 2.15 million homes at the end of May but remains 5.7 percent lower versus the same time last year (as opposed to nearly 60 percent higher in San Francisco).
And in the West, the pace of sales increased 5.4 percent from April to May but remains 1.7 percent lower versus the same time last year.
I don’t see prices coming down in a dramatic fashion, many cash purchases and more stringent bank quals now. Sorry, you guys might have to continue living in your mom’s basement while you wait for the pennies on the dollar housing apocalypse you’ve been praying for.
With banks being more careful with loans, I don’t think we’ll see the housing meltdown of 2008, but there will be a correction of some time with the economy and housing. Things seem so fragile…stocks dropping 20-25% is conceivable, and since that and the housing market seem like the only way to make money these days for most people, a drop in housing prices would certainly be noticeable.
In what way are banks being more careful? I just refinanced and the broker urged me to sign documents full of errors to “get the ball rolling”.
not knowing the details – perhaps your broker asked for initial disclosures signed – the figures are typically overestimated and errors on the loan application may be corrected on appraoval
As for how banks are more careful (compared to 2008) – higher down payment requirements – particularly with lower credit scores, income documentation must be documented
More money down combined with verified ability to repay make the current loans safer than default from before
seriously? 20% down vs 0% down and zero income verification….huge, huge difference between the norms of 2005 and 2016.
The Zero down, NINJA (No income, No job, no assets) loans of the last bubble were truly ridiculous and I’ve yet to hear of anything that crazy happening on a wide scale. But I think that down payments have slipped down from 20%:
“More lenders are lowering down-payment requirements, allowing borrowers to commit 3%—or even less—of a home’s purchase price to get a mortgage. Many had been requiring down payments of at least 20% since the recession began.
[…]
The trend has picked up since mortgage-finance giants Fannie Mae and Freddie Mac, which buy most mortgages from lenders, recently lowered the minimum down payments they will accept to 3% from 5%.”
There’s also been quite a rise in non-bank lenders. SF based SoFI advertises 10% down for upto $3M and will do IO’s for 15% down.
Quicken loans has rapidly built up their loan volume as well.
This post is about the US national housing market and I think that nationally, many people have not recovered from the recession and are hardly in a position to get irrationally exuberant about their home purchases if they can even afford a home at all.
Meanwhile:
“The deals are aimed at buyers with good credit scores and a steady income who have been unable to save enough for a sizable down payment. They are often targeted at buyers who live in expensive housing markets, where even a small down payment can equal tens of thousands of dollars.”
You do wonder a bit at the financial stability of people who buy into an expensive housing market who can’t save up on the order of tens of thousands of dollars.
I’d love to see a chart that tracks the multiple between the median priced US home and the median priced home in the SF MSA.