Connect with us

NAR Reports

Why are home buyers inspired to buy? What factors are at play in 2016?

(REAL ESTATE NEWS) Do home buyers care more or care less about moving closer to their job? Do they think investing in stocks or homes is the better investment? Find out in this year’s report.

Published

on

home buyers

2016 NAR PROFILE OF HOME BUYERS AND SELLERS

This summer, the National Association of Realtors (NAR) surveyed 5,465 home buyers and sellers for the 2016 National Association of Realtors® Profile of Home Buyers and Sellers. The study shows that in the past five years, affordability has tightened, and the time spent home shopping has fallen.

How much faith do home buyers have in their investment, and is that faith on the decline or improving? Why are people moving, and what factors influence those choices?  Let’s dig a little bit deeper.

Are stocks or homes the better investment?

Fully 82 percent of home buyers surveyed opined that buying a home is a good investment, up 2.0 percent in one year.  Nearly  half (47 percent) believe owning a home is a better investment than buying stocks (up 2.0 percent from 2011).

One in three home buyers cite a desire to own as one of their biggest reasons to purchase a home (31 percent  in 2016, up 4.0 percent in five years). The desire among first time buyers as a primary reason to buy is 67 percent (up from 60 percent in 2011).

The attraction to homeownership is the biggest reason to buy, but there are others. Below are the second through sixth place reasons (versus 2011):

  • 10 percent move to obtain a larger home (unchanged).
  • 8.0 percent move due to a change in family situation (unchanged).
  • 8.0 percent move for a job relocation (down 2.0 percent).
  • 7.0 percent move to be closer to friends or family (unchanged).
  • 3.0 percent cited affordability as a primary driver (down 5.0 percent).

What factors influence home buyers’ choices?

The report indicates that the primary factors influencing choice in 2016 (versus 2011) are:

  • 60 percent chose based on neighborhood (down from 67% in 2011).
  • 43 percent wanted convenience to their jobs (down from 49 percent).
  • 37 percent said convenience to family and friends (down from 39 percent).
  • 20 percent were influenced by neighborhood design (down from 32 percent).
  • 24 percent said convenience to shopping (down from 28 percent).
  • 26 percent focused on the quality of the school districts (down from 25 percent).
  • 20 percent wanted convenience to schools (down from 22 percent).
  • 20 percent said convenience to entertainment (down from 21 percent).

The takeaway

If you’re marketing to buyers, knowing what makes them tick can help your team to get ahead. While trends locally are still the most relevant to any broker or agent’s career, knowing the national trends can help pinpoint adjustments that should be made locally, or affirm decisions already being made.

The practice of real estate is changing given these rapidly altered circumstances surrounding home buyers and sellers, and it is important to be informed!

Click here for hundreds of other stats from this report.

#NARreport

Lani is the Chief Operating Officer at The Real Daily and sister news outlet, The American Genius, and has been named in the Inman 100 Most Influential Real Estate Leaders several times, co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

NAR Reports

Sustained lull in signed contracts means pullback in home sales

(REAL ESTATE NEWS) Existing home sales aren’t looking super hot this month, but it’s not the bad news that you’re thinking – let’s discuss!

Published

on

Existing home sales slide in June

Low supply has kept home sales muted, with existing home sales dipping 1.8 percent in the month of June, albeit 0.7 percent above June of 2016, according to the National Association of Realtors. The Midwest region is the current bright spot as the only area sales actually rose during this period.

bar
Dr. Lawrence Yun, NAR Chief Economist, says the previous three-month lull in contract activity translated to a pullback in existing sales in June.

“Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that’s straining their budget,” said Yun.

He added, “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”

There’s a silver lining

“The good news is,” observes Yun, “that sales are still running slightly above last year’s pace despite these persistent market challenges.”

The median price for an existing home rose 6.5 percent over the last year to $263,800, surpassing May as the new peak, and the 64th consecutive month of year-over-year gains.

Housing inventory declined 0.5 percent from the previous month, and 7.1 percent over the last year. Average days on market rose one day from May to 28 in June, which is down from 34 days in June 2016.

Supply and demand challenges

First time buyers were 32 percent of sales in June, down one percent from both in May and a year ago. Yun says “It’s shaping up to be another year of below average sales to first-time buyers despite a healthy economy that continues to create jobs,” said Yun.

“Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers’ dreams of owning a home this year,” noted Yun.

Spicy sales in the Midwest

In the Midwest, sales rose 3.1 percent from May but remain unchanged from this time last year. The median price rose 7.7 percent in the last year to $213,000.

In the Northeast, existing home sales actually fell 2.6 percent, but are 1.3 percent above a year ago (the median price was $296,300, up 4.1 percent for the year).

The South saw a 4.7 percent dip in sales ((unchanged from a year ago) and the median price in the South was $231,300, up 6.2 percent from a year ago.

Sales in the West declined 0.8 percent but are 2.5 percent above June 2016. The median price in the West was $378,100, up 7.4 percent from June 2016.

#HomeSales

Continue Reading

NAR Reports

Home prices up for third consecutive quarter, median price hits $232,100

(REAL ESTATE NEWS) Home prices continue to rise, and while homeowners may be feeling good about it, NAR notes some unhealthiness about these numbers, especially in areas where new home construction isn’t keeping up.

Published

on

house home interior home prices

Strong performance in housing

For the third consecutive quarter, home prices in America have risen on the tailwinds of the strongest quarterly sales pace in a decade which has put downward pressure on perpetually tight inventory levels, according to the latest quarterly report by the National Association of Realtors (NAR).

bar
Rising 6.9 percent from the first quarter of 2016, the national median existing single-family home hit $232,100, the fastest growth experienced since the second quarter of 2015. The median price during the fourth quarter of 2016 increased 5.9 percent from the fourth quarter of 2015. In the first quarter, home prices rose in 85 percent of measured markets.

NAR chief economist, Dr. Lawrence Yun says continual supply shortages ignited faster price appreciation across the country in the first quarter.

“Prospective buyers poured into the market to start the year, and while their increased presence led to a boost in sales, new listings failed to keep up and hovered around record lows all quarter,” said Dr. Yun.

“Those able to successfully buy most likely had to outbid others – especially for those in the starter-home market – which in turn quickened price growth to the fastest quarterly pace in almost two years,” Dr. Yun added.

He also noted that many metros have increased demands as employment levels rebound, but new home construction isn’t up, particularly in the South and West, leading to “unhealthy price appreciation that far exceeds incomes.”

Regional performances varied

NAR reports that total existing-home sales in the Northeast declined 2.2 percent in the first quarter but are 4.2 percent above the first quarter of 2016. The median existing single-family home price in the Northeast was $255,000 in the first quarter, up 2.2 percent from a year ago.

In the Midwest, existing-home sales dipped 4.3 percent in the first quarter but are 1.6 percent above a year ago. The median existing single-family home price in the Midwest increased 5.7 percent to $176,600 in the first quarter from the same quarter a year ago.

Existing-home sales in the South jumped 5.8 percent in the first quarter and are 5.8 percent higher than the first quarter of 2016. The median existing single-family home price in the South was $209,000 in the first quarter, 8.8 percent above a year earlier.

In the West, existing-home sales rose 1.6 percent in the first quarter and are 7.4 percent above a year ago. The median existing single-family home price in the West increased 8.4 percent to $342,500 in the first quarter from the first quarter of 2016.

#HomeSales

Continue Reading

NAR Reports

Home sales are off to a great start this year

(NAR REPORTS) Home sales are off to a really great start. Like pre-recession levels, readers – what challenges could hold the market back?

Published

on

affordability home sales

Home sales off to a good start

Existing home sales rose in January to the fastest pace in nearly a decade, according to the National Association of Realtors, with all regions gaining except for the Midwest.

Completed transactions rose 3.3 in January to a seasonally adjusted annual rate of 5.69 million in January from an upwardly revised 5.51 million in December 2016. The pace is up 3.8 percent from a year ago, the strongest seen since February 2007. Those are pre-crash numbers, you guys!

bar
Dr. Lawrence Yun, NAR Chief Economist, says the gains signal consumer resilience despite rising interest rates.

“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” he said.

“Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions,” noted Dr. Yun.

Home prices continue to rise

The median existing home price in January rose 7.1 percent over the year to $228,900. This period’s increase marks the most rapid since last January, and represents the 59th consecutive month of year-over-year gains.

Inventory is 7.1 percent lower than a year ago, but actually rose in January by 2.4 percent – welcome news for the homebuyers that have been benched by tight inventory levels (that combined with rising prices, creates affordability problems).

Nationally, properties averaged 50 days on the market, down 14 days a year ago. Click To Tweet

“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range,” added Dr. Yun. NAR’s research indicates that combining tight inventory levels with rising interest rates led to households in over half of all states last months being able to afford less.

Another challenge for buyers in coming months

NAR President William E. Brown, cautions about another source that could possibly drag down inventory for would-be buyers in coming months.

“Supply and demand imbalances continue to be burdensome in many markets, and now Fannie Mae is supporting a Wall Street firm’s investment in single-family rentals,” he said.

“This will only further hamper tight supply and put major investors in direct competition with traditional buyers. Instead, the GSEs should lower overly burdensome fees and help qualified borrowers become homeowners.”

home sales

All regions but the Midwest saw more sales

Home sales in the Northeast jumped 5.3 percent to an annual rate of 800,000, and are now 6.7 percent above a year ago. The median price in the Northeast was $253,800, which is 2.5 percent above January 2016.

In the Midwest, existing-home sales decreased 1.5 percent to an annual rate of 1.29 million in January, and are 0.8 percent below a year ago. The median price in the Midwest was $174,900, up 6.5 percent from a year ago.

Existing-home sales in the South in January rose 3.6 percent to an annual rate of 2.31 million, and are now 3.1 percent above January 2016. The median price in the South was $201,400, up 9.2 percent from a year ago.

Existing-home sales in the West ascended 6.6 percent to an annual rate of 1.29 million in January, and are now 8.4 percent above a year ago. The median price in the West was $332,300, up 6.8 percent from January 2016.

#HomeSales

Continue Reading

Emerging Stories

Get The Real Daily
in your inbox

subscribe and get news and EXCLUSIVE content to your email inbox