Pending Home Sales Ascended 3.4% in March
NAR’s Pending Home Sales Index increased to 78.2 in March. Existing-home sales are forecast to rise by 9% in 2024 to 4.46 million
WASHINGTON – Pending home sales in March climbed 3.4%, according to the National Association of Realtors®. The Northeast, South and West posted monthly gains in transactions while the Midwest recorded a loss. Year-over-year, the Northeast and South registered decreases but the Midwest and West improved.
The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – increased to 78.2 in March. Year over year, pending transactions were up 0.1%. An index of 100 is equal to the level of contract activity in 2001.
"March's Pending Home Sales Index – at 78.2 – marks the best performance in a year, but it still remains in a fairly narrow range over the last 12 months without a measurable breakout," said NAR Chief Economist Lawrence Yun. "Meaningful gains will only occur with declining mortgage rates and rising inventory."
Quarterly U.S. economic forecast
NAR forecasts that existing-home sales will rise by 9% in 2024 to 4.46 million (from 4.09 million 2023) and another 13.2% in 2025 to 5.05 million (from 2024). Housing starts are expected to rise by 1.2% in 2024 to 1.43 million (from 1.413 million in 2023) and 4.9% to 1.5 million in 2025 (from 2024).
"Home sales have lingered at 30-year lows, and since 70 million more Americans live in the country now compared to three decades ago, it's inevitable that sales will rise in coming years," explained Yun. "Inventory will grow steadily from more home construction, and various life-changing events will require people to trade up, trade down or move to another location."
NAR expects that median home prices will increase by 1.8% in 2024 to a record of $396,800 (from $389,800 in 2023) and another 1.8% in 2025 to $403,800 (from 2024). NAR forecasts a modest reduction – 0.6% – in the median new home price to $426,100 in 2024 (from $428,600 in 2023), reflecting the building of smaller-sized homes. The association anticipates the median new home price will jump 3.4% to $440,500 in 2025 (from 2024).
"Home prices are expected to rise roughly in line with consumer price inflation and wage growth over the next two years," added Yun. "Most homeowners are on strong financial footing in current market conditions, with only 2% of sales classified as being distressed."
NAR expects home sales to steadily improve while home prices continue to hit record highs.
"Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales," explained Yun. "Given the lingering housing shortage, home prices will march higher, albeit much more slowly than in the past."
Pending home sales regional breakdown
The Northeast PHSI increased 2.7% from last month to 65.1, a decline of 0.3% from March 2023. The Midwest index fell 4.3% to 78.1 in March, up 1.3% from one year ago.
The South PHSI improved 7.0% to 95.8 in March, dropping 1.5% from the prior year. The West index rose 6.8% in March to 61.0, up 3.6% from March 2023.
"Home prices rising faster than income growth is not healthy and adds challenges for first-time buyers," said Yun.
Yun further noted, "Inventory will gradually rise from recent growth in home building. Additionally, many sellers who delayed listing in the past two years will start putting their homes on the market to move to a different home that better fits their new life circumstances – such as changes in family composition, jobs, commuting patterns and retirees wanting to be closer to their grandkids."
The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
Pending contracts are good early indicators of upcoming sales closings. However, the amount of time between pending contracts and completed sales is not identical for all home sales. Variations in the length of the process from pending contract to closed sale can be caused by issues such as buyer difficulties with obtaining mortgage financing, home inspection problems, or appraisal issues.
The index is based on a sample that covers about 40% of multiple listing service data each month. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.
Events
A landslide in Frank, Alberta, killed at least 70 people– 1903
U.S. president Hoover received King and Queen of Siam– 1931
Prisoners liberated at Dachau– 1945
ABC’s Wide World of Sports premiered– 1961
Proposed Newfoundland flag design was revealed– 1980
The first condor to be conceived in captivity hatched at the San Diego Wild Animal Park helping to bring the species back from the brink of extinction– 1988
The World War II Memorial in Washington, D.C., opened to the public– 2004
A perfect pink ring around the Sun was visible for several hours from Key Largo to Key West, Florida. It’s known as the rare halo phenomenon, a refraction of light through multiple layers of ice-crystal clouds in the upper levels of the atmosphere. A halo usually indicates that rain is on the way.– 2008
Prince William married Catherine Middleton– 2011
Mikah Meyer completed a 3-year journey to visit all 419 U.S. National Park Service sites– 2019
Realtor.com® February Rental Report: Renting Now Beats Buying in All of the Largest U.S. Metros
SANTA CLARA, Calif., March 26, 2024 /PRNewswire/ -- Elevated mortgage interest rates, still-high home prices and falling rents have made it more affordable to rent than buy in all of the top 50 U.S. metros, according to the Realtor.com® Rental Report released today. In February, the mortgage payment on a starter home in the largest metros cost $1,027 (+60.1%) more than the monthly rent in those markets, on average. At the same time last year, 45 metros favored renting.
The top 10 metros with the largest rent versus buy savings (see below for top 50 metros):
1. Austin-Round Rock-Georgetown, Texas – $2,165 monthly rent savings (141.5% difference)
2. Seattle-Tacoma-Bellevue, Wash. – $2,422 (121.1%)
3. Phoenix-Mesa-Chandler, Ariz. – $1,528 (99.0%)
4. San Francisco-Oakland-Berkeley, Calif. – $2,689 (95.5%)
5. Los Angeles-Long Beach-Anaheim, Calif. – $2,539 (89.7%)
6. San Jose-Sunnyvale-Santa Clara, Calif. – $2,780 (86.7%)
7. Nashville-Davidson-Murfreesboro-Franklin, Tenn. – $1,366 (86.0%)
8. Portland-Vancouver-Hillsboro, Ore. Wash. – $1,396 (84.4%)
9. Sacramento-Roseville-Folsom, Calif. – $1,514 (82.1%)
10. Houston-The Woodlands-Sugar Land, Texas – $1,103 (80.0%)
"With rents continuing to fall and the cost of buying a home remaining high, exacerbated by the rise in mortgage rates in the later half of 2023, renting a home is now a more cost-effective option in all major U.S. markets," said Danielle Hale, Chief Economist at Realtor.com®. "Deciding whether to rent or buy often goes beyond a financial advantage though, and likely depends on a consumer's circumstances. Renters often prize flexibility while the biggest reasons homebuyers cite are that they want a place of their own and to be closer to family and friends. The financial scales have tipped monthly costs in favor of renting over buying, but it does not bring the benefit of housing wealth gains over time that owning does and movers should consider their long-term housing plans and personal situation as they make this decision."
The overall advantage of renting continues to grow in most markets
In February, the cost of buying a starter home in the top 50 metros was $1,027 (60.1%) higher than renting one; comparatively, the cost to buy was $865 higher than renting in February 2023 – a $162 higher monthly savings from renting compared to the prior year. The savings are mostly driven by declining rent prices and higher buying costs, especially interest rates – the 30-year fixed mortgage rate remained elevated at 6.78% in February 2024 compared to 6.26% 12 months ago.
The advantages of renting have become more pronounced across the top metros. Looking specifically at the top 10 metros that favor renting over buying, the average monthly costs for buying a starter home were $1,950 (95.6%) higher than rents – nearly double the cost. Those metros are mostly markets with a higher concentration of tech workers and high earners, where both the average rent and buy costs are higher than the national average.
Renting beats buying in all major metros, especially in south and west; five metros flip from last year
In February, median rents fell across all unit sizes. Despite seven months of annual rent declines, median rents are still $252 (17.3%) higher than the same time in 2020, before the onset of the pandemic. Last February, 45 metros favored renting, but over the past 12 months Memphis, Tenn, Birmingham, Ala., Pittsburgh, St. Louis and Baltimore metros flipped from favoring buying to favoring renting. Four out of five of those markets were among the top markets seeing a high share of investor activity, which may have accelerated the growth of home prices there and increased the overall costs of buying a home, tilting those markets further toward favoring renting over buying.
Austin, Texas, where the monthly cost of buying a starter home was $3,695 – 141.5% more than the monthly rent of $1,530, for a monthly savings of $2,165 – topped the list of markets most favoring renting. Other top markets favoring renting over buying were Seattle, Phoenix, San Francisco and Los Angeles. Metros with diminishing rental advantages were San Jose, Calif.; Dallas; San Francisco; Columbus, Ohio; Miami; and Minneapolis.
Methodology
Rental data as of February 2024 for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
The monthly cost of buying a home was calculated by averaging the median listing prices of studio, 1-bed, and 2-bed homes, weighted by the number of listings, in each housing market. Monthly buying costs assume a 8% down payment, with a mortgage rate of 6.78%, and include taxes, insurance and HOA fees.
With the release of its January 2024 rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. The new methodology is expected to yield a cleaner, more representative and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since January 2024 will not be directly comparable with previous releases and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.
Mark Hoeft ~ 850-525-2765 ~ Mark@TheFloridaCoast.com ~ The Florida Coast Realty Pensacola
monDAY, APRIL 29, 2024
Advice of the DaY
Dream of kisses, and you dream of treachery.
Specializing in Pensacola Florida luxury homes & Pensacola Beach Florida luxury condo for
buyers & Sellers
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Welcome to TheFloridaCoast.com; I would like to introduce myself, my name is Mark Hoeft I am a Florida Real Estate Broker & Owner of The Florida Coast Realty Pensacola LLC in Pensacola, Pensacola Beach, & Gulf Breeze Florida, I also the proud owner of The Florida Coast Realty West Palm & The Florida Coast Realty Destin Florida. It would be my honor to help you find your slice of Florida's beautiful Emerald Coast that you've been searching for. Whether you are looking for your primary home, a second home, or investment property for your Real Estate portfolio on Florida's beautiful Gulf Coast. I specializing in Beach Homes, Condos, and Townhouses. I use my 20 years of knowledge and dedication to hard work to make your real estate transaction as smooth as possible. I've become a leader in buying and selling Pensacola Real Estate, Scenic Gulf Breeze Homes, and Pensacola Beach Condos & Homes. I pride myself in my professionalism and expertise. I've closed over 350 real estate transactions and have totaled more than $40,000,000.00 in sales during the past 20 years.
Born
William Hearst (editor/publisher) – 1863
Duke Ellington (musician) – 1899
Hirohito (emperor of Japan) – 1901
Fred Zinnemann (director of film) – 1907
Willie Nelson (country singer) – 1933
Dale Earnhardt (race car driver) – 1951
Jerry Seinfeld (comedian & actor) – 1954
Daniel Day-Lewis (actor) – 1957
Eve Plumb (actress) – 1958
Carnie Wilson (singer) – 1968
Uma Thurman (actress) – 1970
Andre Agassi (tennis player) – 1970
Died
Alfred Hitchcock (filmmaker) – 1980
William J. Bell (writer and producer) – 2005
Bob Hoskins (actor) – 2014