Midwest

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Perhaps not surprisingly, eight of the 10 most expensive housing markets in the nation can be found in California, at least according to the latest Home Price Comparison Index from Coldwell Banker.

The real estate company evaluated average home values for select 2,200 square foot single-family homes with four bedrooms and two-and-a-half baths in 315 markets in the U.S., finding that La Jolla, CA was the most expensive at $1,841,667.

On the other end of the affordability spectrum was Sioux City, Iowa, where a comparable home would cost just $133,459, despite its waterfront status on the Mississippi River.

The California vs. Midwest trend runs deep, with eight of the most affordable homes found in the heartland of the United States.

Notables include Akron, Ohio, Arlington, TX, and Eau Claire, WI, where all the homes average a sales price below $150,000.

In California, places like San Francisco, Beverly Hills, and Newport Beach topped the list, all with prices above $1.5 million.

Aside from California cities dominating the least affordable list, Greenwich, CT and Boston, MA also made the top ten, with sales prices of $1,787,000 and $1,493,750, respectively.

Of course, you needn’t be a multi-millionaire to live in California, that is, if you choose to live in the most affordable city, Bakersfield, where the average sales price runs at a more reasonable $273,457.

But if you want more freedom to choose, consider Idaho, where the home price variance between the most affordable and least affordable market is just $217.

Coldwell said the cumulative average sales price for the four-bedroom homes tracked in the index was $403,738, a 4.4 percent discount to the $422,343 price in the 2007 study.

(photo: amagill)

Source: thetruthaboutmortgage.com

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Arkansas has far more to offer than just stunning landscapes and southern charm.

If you’re contemplating making a move, you may be curious about the best places to live in Arkansas. From bustling cities steeped in history to quaint towns with thriving education and tech industries, Arkansas is a state of opportunity.

Whether you’re seeking an outdoor playground, a cultural hub or a community where you can climb the corporate ladder, this guide will provide insights into what makes each location unique, ultimately helping you decide the best place to live in The Natural State.

  • Population: 95,230
  • Average age: 27.7
  • Median household income: $52,111
  • Average commute time: 19.5 minutes
  • Walk score: 32
  • Studio average rent: $1,080
  • One-bedroom average rent: $885
  • Two-bedroom average rent: $960

As the third-largest city in the state and home to the University of Arkansas, Fayetteville presents an inviting mix of small-town charm and big-city amenities. Razorback football games turn the entire community into a sea of red, while the Fayetteville Farmers Market provides a weekly display of local produce and crafts that showcases the area’s natural bounty.

The city isn’t all about sports and farming, though. Fayetteville also has a flourishing arts scene, complete with galleries, theaters and live music venues.

Fayetteville takes quality of life seriously, with an array of parks, trails and green spaces helping the city earn a reputation as one of the most outdoor-friendly cities in the South. The Ozark Mountains provide a scenic backdrop for hiking, biking, and outdoor exploration, while the city itself is highly walkable with an efficient public transit system. Affordable housing and excellent public schools make it an ideal place for families, and the diverse job market — which includes industries like healthcare, education and technology — draws skilled professionals from a wide range of fields.

  • Population: 56,734
  • Average age: 32
  • Median household income: $89,653
  • Average commute time: 16.6 minutes
  • Walk score: 24
  • Studio average rent: $1,292
  • One-bedroom average rent: $980
  • Two-bedroom average rent: $1,795

Often cited among the top places to live in Arkansas, Bentonville is more than just the corporate headquarters of Walmart. It’s a hub of innovation, culture and outdoor adventure. With its unique position at the crossroads of business and leisure, the city offers a lifestyle that caters to seasoned professionals and young families alike.

Downtown Bentonville is a hive of activity with an eclectic mix of coffee shops, gourmet restaurants and boutique stores. For those who appreciate art, the Crystal Bridges Museum of American Art is a major draw, showcasing works from the Colonial period to the present day.

Bentonville has something for outdoorsy types, too. The city is a great spot for mountain bikers, thanks to an extensive network of trails that range from beginner to expert levels. Families can take advantage of many parks and open spaces, and Lake Bella Vista is a scenic locale for kayaking, fishing and soaking up the Northwest Arkansas sun.

For daily errands and essentials, the town has plenty of convenient shopping options, many of which are located within a short drive. The highly rated public school system and low crime rates add to the city’s appeal, making Bentonville not just a great place to work, but a fantastic place to call home in Arkansas.

  • Population: 201,998
  • Average age: 36.5
  • Median household income: $56,928
  • Average commute time: 23.1 minutes
  • Walk score: 33
  • Studio average rent: $1,170
  • One-bedroom average rent: $864
  • Two-bedroom average rent: $892

Little Rock, the capital city of Arkansas, consistently ranks among the premier spots in Arkansas for good reason. This metropolitan area offers a compelling mix of historical landmarks, cultural events and economic opportunities.

The city’s River Market District is a lively area filled with artisanal shops, eateries and bustling farmers markets, setting the stage for a solid social scene. Add to that a healthy selection of museums, including the William J. Clinton Presidential Library, and you have a city that is historically rooted and forward-thinking.

For everyday living, Little Rock delivers a variety of essentials. Education options abound, from a multitude of public and private schools to institutions of higher learning like the University of Arkansas at Little Rock. Health and wellness are prioritized, with a network of hospitals and clinics offering top-notch medical care. Outdoor enthusiasts will appreciate the city’s proximity to the Arkansas River and Pinnacle Mountain State Park. Meanwhile, job opportunities healthcare, education and government make Little Rock an appealing destination for folks from all walks of life.

  • Population: 71,112
  • Average age: 33
  • Median household income: $65,511
  • Average commute time: 16.4 minutes
  • Walk score: 20
  • Studio average rent: $1,251
  • One-bedroom average rent: $1,388
  • Two-bedroom average rent: $1,837

Easily among the best places to live in Arkansas, Rogers offers a distinctive blend of old and new. Once a sleepy town, Rogers has evolved into a thriving community that has maintained its charm while embracing growth and development. Historic Downtown Rogers takes you on a journey back in time with its well-preserved architecture, antique shops and charming cafes, while the modern Pinnacle Hills area delivers a more contemporary shopping and dining experience. For fans of live performances, the Walmart AMP hosts a ton of concerts and events throughout the year.

Rogers is home to one of the largest public school districts in the state, providing a range of education options for families. If you’re into outdoor activities, Beaver Lake offers a scenic getaway for boating, fishing and camping. The city is also favorable for business, as it serves as the headquarters for multiple corporations, providing a ton of job opportunities in various industries. Low crime rates, affordable housing and a healthy offering of convenient community amenities make Rogers an appealing choice for anyone contemplating a move to Arkansas.

  • Population: 38,114
  • Average age: 43.6
  • Median household income: $42,718
  • Average commute time: 21.3 minutes
  • Walk score: 31
  • Studio average rent: $450
  • One-bedroom average rent: $600
  • Two-bedroom average rent: $575

Undoubtedly a contender for the title of one of the most enviable places to live in Arkansas, Hot Springs lives up to its name with its famous thermal baths, offering residents and visitors alike a unique place to relax and unwind. But the allure of Hot Springs goes well beyond its therapeutic waters. The city is steeped in history, from the Bathhouse Row with its neoclassical architecture to the Gangster Museum that delves into the city’s colorful past. Even sports enthusiasts have something to cheer for here; the Oaklawn Racing Casino Resort is a significant hotspot for horse racing aficionados.

Hot Springs is home to a range of public and private schools. With the Ouachita Mountains providing a breathtaking backdrop, outdoorsy people can easily enjoy activities like hiking, boating and fishing. Health services are accessible and reliable, bolstered by a number of hospitals and clinics. Job opportunities in healthcare, tourism and retail offer a varied employment landscape, making Hot Springs not just a great place to visit for its healing waters but a well-rounded Arkansas community to call home.

  • Population: 65,121
  • Average age: 29.5
  • Median household income: $48,104
  • Average commute time: 21.1 minutes
  • Walk score: 25
  • One-bedroom average rent: $775
  • Two-bedroom average rent: $950

Conway has been gaining attention as one of the best places to live in Arkansas, especially for those who are looking for an educational and cultural hub. Often referred to as the “City of Colleges,” Conway is home to three higher education institutions: the University of Central Arkansas, Hendrix College and Central Baptist College. This influx of students enriches the city’s cultural fabric, bringing a youthful energy and academic flair that sets the city apart. Conway has a burgeoning tech industry too, earning it the nickname Silicon Prairie, as it becomes an increasingly attractive place for startups and tech companies.

Conway is known for its excellent public school system, giving parents plenty of educational choices for their children. Nature lovers will enjoy the proximity to natural wonders like Lake Conway and Cadron Settlement Park. Retail is abundant, with shops ranging from big-box stores to locally owned boutiques. Given its low cost of living and job opportunities in education, technology and healthcare, Conway stands out as a compelling option for anyone considering making Arkansas their home.

  • Population: 79,324
  • Average age: 34
  • Median household income: $48,901
  • Average commute time: 17.9 minutes
  • Walk score: 23
  • Studio average rent: $1,150
  • One-bedroom average rent: $930
  • Two-bedroom average rent: $815

Positioned as a rising star among the best places to live in Arkansas, Jonesboro combines the amenities of a larger city with the friendliness of a smaller town. As the home of Arkansas State University, Jonesboro has a youthful energy that influences everything from its lively arts scene to its sports culture.

While the university acts as a beacon for educational culture, it’s also a significant employer in the area. Additionally, the city’s Downtown is an ever-evolving space featuring a variety of restaurants, shops and entertainment venues, all contributing to a strong community.

In Jonesboro, families will find a diverse range of public and private school options, while healthcare services are robust, anchored by the NEA Baptist Medical Campus. Outdoor aficionados will appreciate Craighead Forest Park, which offers miles of trails, a lake and multiple playgrounds for both two-legged and four-legged family members. Employment opportunities span education, healthcare and manufacturing and the city’s relatively low cost of living makes it an attractive destination for professionals and families alike.

  • Population: 87,609
  • Average age: 31.8
  • Median household income: $56,144
  • Average commute time: 19.4 minutes
  • Walk score: 27
  • Studio average rent: $1,075
  • One-bedroom average rent: $1,259
  • Two-bedroom average rent: $1,259

Springdale is a city that surprises with its mix of industrial prowess and natural beauty. Known primarily as the headquarters for Tyson Foods, the city is a powerhouse in the poultry industry, offering a range of job opportunities. But there’s more to Springdale than chickens and commerce. Arvest Ballpark serves as the home of the Northwest Arkansas Naturals, bringing Minor League baseball excitement to the community.

Springdale boasts a wide range of academic options thanks to its expansive public school system and private schools. Public services are robust, including a network of libraries and parks. Har-Ber Lake and Lake Elmdale provide local options for some of the best fishing in the state. Healthcare facilities are highly rated and the city’s diverse retail and dining options mean residents don’t have to venture far for shopping or a good meal.

  • Population: 23,098
  • Average age: 28.8
  • Median household income: $41,753
  • Average commute time: 23.4 minutes
  • Walk score: 36
  • Studio average rent: $600
  • One-bedroom average rent: $800
  • Two-bedroom average rent: $750

As the home to Harding University, Searcy boasts an atmosphere of intellectual curiosity and cultural enrichment. The university brings a ton of events and activities to the town, ranging from music concerts to academic lectures. The historic downtown area features a variety of boutique shops and local restaurants, making it a charming spot for an afternoon stroll or a dinner for two.

In Searcy, outdoor activities are easily accessible, with the Little Red River providing opportunities for fishing and water sports. Health services are robust, with the White County Medical Center serving as a reliable healthcare provider for the community. Add to this a diverse job market that includes sectors like healthcare, education and retail, and it becomes evident why Searcy is a prime destination for anyone contemplating life in Arkansas.

  • Population: 89,576
  • Average age: 36.7
  • Median household income: $48,033
  • Average commute time: 16.6 minutes
  • Walk score: 35
  • Studio average rent: $595
  • One-bedroom average rent: $630
  • Two-bedroom average rent: $775

Fort Smith holds a unique position as one of the most desirable places to live in Arkansas, serving as a gateway to both the South and the Midwest. The city’s rich history is evident everywhere, from the 19th-century military post at Fort Smith National Historic Site to the time-worn tracks of the trolley at the Fort Smith Trolley Museum. Alongside this homage to the past, Fort Smith is also very much with the times, with the Unexpected Art Project turning downtown buildings into large-scale canvases for international artists.

In Fort Smith, education is a strong suit, with the University of Arkansas at Fort Smith providing a hub for higher education, and a range of public and private K-12 schools offering quality options for families. Employment opportunities are a mixed bag, spanning the healthcare, manufacturing and retail industries. The city is also blessed with natural beauty, with the Arkansas River and the Ozark Mountains providing ample opportunities for outdoor activities.

Your Arkansas apartment awaits

Choosing the right spot to call home can be a challenging endeavor, but hopefully, this guide to the best places to live in Arkansas has given you a head start on your search. Each city or town offers its own unique advantages, from educational opportunities and career prospects to outdoor activities and cultural enrichment.

Whether you’re a tech-savvy professional, a family looking for excellent schools or an outdoor enthusiast eager for your next adventure, Arkansas has a place that can cater to your lifestyle and aspirations. Consider what aspects are most important to you, and you’re sure to find a community in the Natural State that feels like home.

Source: rent.com

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How hot is the housing market? There is certainly no shortage of indicators, but three in particular were published in the last week: the S&P/Case-Shiller Home Price Index, the All-Transactions House Price Index from the U.S. Federal Housing Finance Agency and the MSA-level “hotness” scores from Realtor.com.

The indices suggest high prices that are inching higher, while the hotness scores suggest northern MSAs are gaining ground over their southern counterparts.

Turning first to the price indices, the FHFA All-Transactions index is a weighted, repeat-sales index of single-family properties with mortgages purchased or securitized by Fannie Mae or Freddie Mac since 1975. In the index, the base year with an index value of 100 is the first quarter of 1980.

This quarterly index reached 645.18 in the second quarter of 2023, an all-time high, according to the latest data published Aug. 29. That is up 3.1% from the first quarter and up 4.5% from the year prior.

The S&P/Case-Shiller index also uses a repeat sales method, but is calculated monthly, seasonally adjusted and indexed to a base of January 2000.

Its all-time high came in June 2022 at 304.82, but this June – the most recent data – is right on its heels at 304.64. That is up only 0.7% from May and essentially flat to the year prior (because the Case-Shiller index lags, home sales that went into contract in April are present in the data).

The closest FHFA equivalent to the S&P/Case-Shiller index is its Purchase-Only House Price Index, which is likewise calculated monthly and seasonally adjusted. At 405.81, June constituted the index’s all-time high. It is up only 0.3% from May and up 3.1% year-to-year.

While these indices are climbing as of June, it should be noted that home prices have faced headwinds in the months since. Buyers are losing purchasing power to rising mortgage rates, mortgage demand has dipped and homebuilder confidence has declined, to name a few.

Turning to the Realtor.com hotness scores, this measure attempts to calculate each MSA’s standing compared to the nation’s other MSAs based on listings’ median days on market and average listing views on Realtor.com. It is a more timely view of these markets, with August as the most recent available data.

The hottest metros in Realtor.com’s rankings are located mostly in the North and the Midwest, while the lowest-ranking metros are mostly found in Louisiana, Texas and Florida.

The year-over-year change in each MSA’s market hotness score further shows a new preference for northern locales over southern ones. Several southern cities’ scores fell, while MSAs in the Midwest and Northeast, as well as California, saw noteworthy gains.

Source: housingwire.com

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Mirroring the trend for new home sales(+4.4%), pending home sales rose 0.9% in July, according to data released Wednesday by the National Association of Realtors (NAR). 

Year over year, pending home sales were down 14%, a smaller decrease than the 15.6% annual drop recorded in June. However, unlike the market for new homes, which has recovered convincingly above last year’s lows (+31.5%), pending home sales continue to lag behind year-ago levels (-14.0%). The NAR’s Pending Home Sales Index climbed to a reading of 77.6 in July. An index of 100 is equal to the level of contract activity in 2001.

“The small gain in contract signings shows the potential for further increases in light of the fact that many people have lost out on multiple home buying offers,” said NAR Chief Economist Lawrence Yun. “Jobs are being added and, thereby, enlarging the pool of prospective home buyers. However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many.”

Month over month, contract signings increased in the South and West but decreased in the Northeast and Midwest

Regionally, on a month-over-month basis, the South (95.3) and the West (61.3)  pending home sales climbed and showed the smallest declines from one year ago, according to Realtor.com Chief Economist Danielle Hale. Meanwhile the Northeast (63.2) and the Midwest (77.5) interestingly fell, even though these two regions recently boasted more robust real estate activity and stronger pricing. Compared to a year ago, pending sales activity was down by more than 20% in the Northeast region, the biggest decline in that region over the past year, noted Lisa Sturtevant, Bright MLS chief economist.

“Greater availability of homes for sale in the South and price breaks in the West were likely contributors,” said Hale.

Overall, pending home sales fell in all four U.S. regions compared to one year ago. 

Two consecutive months of increases doesn’t necessarily mean that the housing market is moving

The median existing home price crawled north of $400,000 in July while interest rates inched above 7%.

“These significant affordability challenges, as well as a continued dearth of inventory, lower the likelihood that pending sales will continue to grow,” said Kate Wood, home and mortgage expert at NerdWallet.

While it is common for pending sales to decline between June and July, this year’s situation is tougher, said Sturtevant.

 “Buyers are being forced to lengthen their home search since there are so few properties available for sale,” she said.

In fact, two out of three Mid-Atlantic buyers who purchased in July had to make an offer on more than one home before they were successful, found a  Bright MLS’s recent survey.

Sales activity is expected to remain  slow for the rest of the year, as inventory remains low and mortgage rates remain high, noted Sturtevant. 

Source: housingwire.com

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Retail lender Guild Mortgage announced Monday the acquisition of First Centennial Mortgage, a privately-held Illinois-based lender with 15 branches predominantly in the Midwest and a presence in 17 states. The terms of the deal were not disclosed.

Guild has been acquiring lenders to expand in local markets in a purchase mortgage-focused environment. Since December 2022, Guild has closed deals with Inlanta Mortgage, Legacy Mortgage and Cherry Creek Mortgage.  

Established in 1995 by brothers Steven and David McCormick, First Centennial Mortgage offers a wide range of mortgage products, including conventional, FHA, VA building and construction, per the mortgage data platform Modex. 

The company had 227 active loan officers and originated $830 million in the last 12 months. Of the total origination volume in the period, purchase mortgages accounted for 82% and refis consisted of 15%, the data shows.

“We continue to effectively execute our strategy to grow and gain market share through acquisitions where there exists a strong cultural match and the potential for value is present for both parties,” Terry Schmidt, CEO of Guild, said in a statement. 

This is the first Guild acquisition under Schmidt’s leadership. She went from president to CEO when Mary Ann McGarry retired from the CEO position in late June. McGarry remained on the California-based lender’s board of directors after retirement. 

Steven McCormick, president of First Centennial Mortgage, said in a statement that the company has a similar culture and platform to Guild as both focus 100% on retail, local sales and operational fulfillment.  

On the back of a purchase market-focused strategy, Guild posted a net income of $36.9 million in Q2 2023, an improvement from the loss of $37.2 million in the previous quarter. Originations came in at $4.45 billion from April to June, up from $2.7 billion last quarter. According to Modex, Guild has 2,179 active LOs and 564 branches. 

Schmidt said during the Q2 earnings announcement that the lender continues to execute its strategy to gain market share through organic growth and acquisitions while broader industry challenges persist due to higher interest rates and limited home inventory. 

Regarding its products, Guild rolled out in June a 1% down payment advantage program that allows customers to buy a home with a minimum down payment of 1% of the purchase price. Guild will also cover 1% of the borrower’s interest rate for the first year with a lender-paid temporary buydown. 

Source: housingwire.com

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Consumers are growing increasingly optimistic about their personal finances, but the opposite is true when it comes to their ability to buy a home or qualify for a mortgage, according to the National Association of Realtor’s latest Housing Opportunities and Market Experience survey.

The survey found that just 68 percent of consumers are positive about their ability to buy a home, compared to 72 percent in the previous quarter. That represents the lowest level in two years, the NAR said.

Just as concerning is that renters in particular are feeling even less optimistic, with just 55 percent saying now is a good time to buy, compared to 60 percent previously. Renters identified barriers to homeownership including saving for a down payment, qualifying for a mortgage, student debt, worries about future income, and low credit scores.

As for current homeowners, older citizens and those who live in more affordable regions such as the South and Midwest, these displayed more optimism.

“The critical shortage of listings in most markets continues to spark a hike in home prices that is not easy for many buyers—especially first-time buyers—to overcome,” said NAR Chief Economist Lawrence Yun. “Adding more fuel to the affordability fire is the fact that mortgage rates have shot up to a four-year high in just a few months. Many house hunters are telling realtors that they are dispirited by the stiff competition for the short number of listings they can afford.”

On the other side of the equation, 74 percent of current homeowners state they believe now is a good time to buy, compared to just 69 percent one year ago.

“There’s no question that a majority of homeowners have amassed considerable equity gains since the downturn,” Yun said. “Home prices have grown a cumulative 48 percent since 2011 and are up 5.9 percent through the first two months of this year. Supply conditions would improve measurably—and ultimately lead to more sales—if a growing number of homeowners finally decide that this spring is the time to list their home for sale.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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Source: realtybiznews.com

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The good news:

While the exact numbers will vary depending on where you live, the latest survey of real estate experts forecasts that home prices will end 2016 up 4.5 percent on year-over-year basis.

And the bad:

Looking forward, they also expect the annual pace of home value appreciation to slow to 3.6 percent in 2017, 3.2 percent in 2018, 3.1 percent in 2019 and to 2.9 percent in 2020.

America’s two housing markets

House prices have always varied greatly by location, but never more so than during the current housing recovery. Prices are—and have  been—rising at very different rates in major markets.

Since the housing boom and bust gave way to recovery, the U.S. housing market has seemingly split into two unequal parts: Middle America, and coastal America. Home values are growing rapidly in markets on both East and West Coasts as hot job markets help keep demand for housing high, and more slowly in the Midwest and Heartland, where negative equity is still pervasive and job growth scant.

As a result, Americans—especially younger millennials—are moving away from Middle America and to the coasts in large numbers, whether for jobs, lifestyle preferences or both.

This June, home prices in San Francisco were rising 9.5 percent on a year-over-year basis while prices in Chicago rose only 1.4 percent.

How long will this trend continue?

More than half of those experts in the survey said they believed this trend has either already begun to reverse or will reverse in coming years.

Another 11 percent said this trend was actually an illusion, and that coastal markets are no more or less popular now than they’ve always been relative to Middle America. Just 25 percent of experts with an opinion said the coastal/Middle America split was likely to be permanent.

Of those experts who said the trend was likely to reverse, a majority (56 percent) said job growth in the middle of the country—driven by companies looking for cheaper alternatives to the coasts in which to expand—would eventually lure residents back to the Heartland.

Similarly, almost a quarter (24 percent) said Americans would migrate inland in search of more affordable housing, and 13 percent said Americans would start to seek the most traditional lifestyle that the middle of the country has to offer. Only 2 percent said climate change is likely to force residents away from the coasts.

In addition to the coastal/inland divide, the housing market has also experienced a notable shift between urban and suburban communities. The suburban home – long a symbol of success, stability, and the American Dream—may be losing some of its luster as urban homes grow in value more quickly.

Local factors, like employment and income growth, transportation infrastructure improvements like new highways and mass transit, and new home construction will have as much or more impact on home prices in your community than national or regional factors.

What this means for you

So far, coastal markets have been doing well. Prices are up, and many have started to think they’re on their way back to pre-crash highs. However, thanks to all the possibilities discussed above, that may not be the case at all.

If you’re in a hot coastal market, this can mean three things for you:

  1. Thinking about selling your home? 2016 might just be the best year to do so.
  2. Just bought a home this year? Don’t expect your new home to appreciate as it has been, at least through the end of the decade.
  3. Looking at buying a home as an investment? You’ll probably get a better rate of return in the stock market. However, these predictions will vary greatly depending on where you live.

This, of course, depends on your location.

Source: totalmortgage.com

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After a slump in June, the sales pace of new homes picked up month over month in July, according to data published on Wednesday by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). 

In July, the sales pace of new homes climbed 4.4% compared to June, reaching a seasonally adjusted annual rate of 714,000. On a year-over-year basis, new home sales were up 31.5%.

This aligns with mortgage application data for new builds, which showed demand up 35.5% year-over-year in July and up  0.2% from June.

Building activity continues to be buoyed by a strong and steady demand, but there could be a shift underway in the housing market, warns Bright MLS Chief Economist Lisa Sturtevant. 

Two factors are at play here: high mortgage rates, which, currently around 7.5% are likely to price out many prospective homebuyers this fall, and inventory, which is beginning to tick up in many markets. 

However, the rate of supply for new homes still surpasses that of existing homes. 

“Although there is just 3.3 months of supply of existing homes, that level has been increasing for the past few months. For new homes, there is 7.3 months of supply,” detailed Sturtevant.

The seasonally‐adjusted estimate of new houses for sale at the end of July was 437,000. At the current sales pace this inventory represents 7.3 months of supply, which is a decline from the 7.4 months of supply recorded in June and 2.8 months below July 2022.

Regional breakdown

In the Midwest and West regions, transactions saw double-digit monthly gains. The pace of sales jumped 31.5% above the same month in 2022. In fact, all regions of the country posted double-digit improvements from a year ago. Southern metros saw a majority of newly built homes this year, as many people migrated towards the region, noted George Ratiu, chief economist at Keeping Current Matters. At the same time, the Northeast region also experienced a noticeable pickup in activity. Mid-sized markets that offer proximity to major employment centers and relative affordability saw strong demand.

Homebuilders are making new homes more affordable

As the sales pace picked up month over month, the median sales price of new homes also ticked up in July, climbing $21,300 to $436,700. It was up 4.8% from June, but down 8.7% from last July. Still, it was the largest monthly increase since September 2022. The average sales price was $513,000.  

New home prices have been declining year-over-year for the past four months, smoothing the affordability crisis, noted Sturtevant.

In fact, in July 2023, 40% of new houses were sold for less than $400,000. A year earlier, 33% cost less than $400,000, remarked Holden Lewis, home expert at NerdWallet.

“Some home builders have edged prices down slightly, but builders also are increasingly offering concessions, builder financing, or upgrades to help entice buyers,” Sturtevant added. 

While prices are marginally declining, economists also noticed that smaller homes were coming to market this year in response to shrinking affordability. According to Ratiu, that trend should continue for the balance of the year.

Can this strong builders’ activity last ? 

In August, the homebuilder confidence index declined for the first time in 2023, signaling headwinds looming in the sector. 

“In the near term, a lull in demand brought on by 7% mortgage rates could mean that builders will see less traffic and more empty model homes in the latter half of 2023,” said Sturtevant.

Doug Duncan, chief economist at Fannie Mae, said the new home sales report was in line with expectations. But mortgage rates are the X factor.

“Given that mortgage rates have again risen above 7 percent, we believe the risk to new home sales is to the downside. Of course, this may be partially offset as a rise in completed inventories may lead builders to offer more generous concessions to bolster demand.”

Source: housingwire.com

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U.S. new-home sales rose in July to the highest level in over a year as homebuilders continue to benefit from limited supply in the resale market.

Purchases of new single-family homes increased 4.4% to an annualized 714,000 pace after downward revisions to prior months, government data showed Wednesday. The median estimate in a Bloomberg survey of economists called for a 703,000 pace.

With mortgage rates at the highest level in more than two decades, most homeowners are unwilling to move, keeping inventory on the resale market extremely limited. That’s encouraged prospective buyers to seek out new construction, and builders are also throwing in more incentives.

However, the recent pickup in mortgage rates is weighing on homebuilder sentiment and already translating into weaker demand. A report earlier Wednesday showed mortgage rates rose to 7.31% last week, the highest level since late 2000. That took a gauge of home-purchase applications down to the lowest level since 1995.

At the same time, a combination of tight supply and high costs continues to weigh on affordability. The median sales price of a new home climbed to $436,700 from a year earlier, according to the Commerce Department’s report. That’s well above pre-pandemic levels.

The number of homes sold in July and awaiting the start of construction — a measure of backlogs — declined to lowest level this year.

The data showed there were 437,000 homes for sale as of the end of last month. That represents 7.3 months of supply at the current sales rate, matching the lowest since early 2022.

Sales rose in the Midwest and West to the highest level since early last year, while they fell in the Northeast and South.

New-home sales are considered a timelier barometer than purchases of previously-owned homes, which are calculated when contracts close. Those sales fell to the lowest since the start of the year in July as inventory remained restrained, hurting affordability.

The new-homes data are volatile. The report showed 90% confidence that the change in sales ranged from a 8.4% decline to a 17.2% gain.

Source: nationalmortgagenews.com