Morning Report: Existing home sales rise

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Stocks are lower on overseas market weakness. Bonds and MBS are up after the European Central Bank left rates unchanged.

 

Existing home sales rose 3.6% in December, according to NAR. The seasonally adjusted annual rate of 5.54 million was up 11% from a year ago. Lawrence Yun, NAR’s chief economist, said home sales fluctuated a great deal last year. “I view 2019 as a neutral year for housing in terms of sales,” Yun said. “Home sellers are positioned well, but prospective buyers aren’t as fortunate. Low inventory remains a problem, with first-time buyers affected the most.” The median home price came in at $274,500, up 7.8% from a year ago. Total housing inventory sat at 1.4 million units, down 14.5% from November and about 8% from a year ago. At current levels, this represents about 3 months worth of inventory.

 

NAR is optimistic about 2020: “NAR is expecting 2020 to be a great year for housing,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, California. “Our leadership team is hard at work to secure policies that will keep our housing market moving in the right direction, like promoting infrastructure reform, strengthening fair housing protections and ensuring mortgage capital remains available to responsible, mortgage-ready Americans.”

 

ATTOM data solutions said home sellers realized a price gain of $65,500 on the typical home sale, which represents a 34% return on investment. “The nation’s housing boom kept roaring along in 2019 as prices hit a new record, returning ever-higher profits to home sellers and posing ever-greater challenges for buyers seeking bargains. In short, it was a great year to be a seller,” ATTOM Chief Product Officer Todd Teta said. “But there were signs that the market was losing some steam last year, as profits and profit margins increased at the slowest pace since 2011. While low mortgage rates are propping up prices, the declining progress suggests some uncertainty going into the 2020 buying season.”

 

 

Author: Brent Nyitray

Why do you need new bands? Everyone knows rock attained perfection in 1974. It's a scientific fact. - Homer Simpson

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