U.S. Real Estate Update: Impact on Relocation
Posted by Meighan Dutt, Account Executive, Guaranteed Rate Affinity
The following information is provided courtesy of our partners at Guaranteed Rate Affinity, with information from the National Association of Realtors®.
U.S. Real Estate and Mortgage Overview
Housing inventory saw its first year-over-year increase in three years, while pending home sales snapped a two-month slump in June. The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose by 0.9 percent to 106.9 last month, according to the National Association of Realtors® (NAR). Contract signings are still down 2.5 percent annually, however.
While pending home sales only saw a marginal increase, total housing inventory went up significantly during June. Inventory rose by 4.3 percent to 1.95 million existing homes available for sale and is up 0.5 percent from a year ago. It’s the first year-over-year increase since June 2015, per the NAR.
Mortgage rates declined slightly, where the national average (as of August 9) according to Freddie Mac, was 4.59% for a 30 year fixed rate mortgage. Rates are expected to trend up close to 5% by years end.
NAR chief economist Lawrence Yun said the inventory uptick played a role in the increased housing activity. “After two straight months of pending sales declines, home shoppers in a majority of markets had a little more success finding a home to buy last month,” Yun said. “The positive forces of faster economic growth and steady hiring are being met by the negative forces of higher home prices and mortgage rates.”
There could be more good news stemming from this report. Yun believes the worst of the current housing shortage could be over. “Home price growth remains swift and listings are still going under contract at a robust pace in most of the country, which indicates that even with rising inventory in many markets, demand still significantly outpaces what’s available for sale,” added Yun. “However, if this trend of increasing supply continues in the months ahead, prospective buyers will hopefully begin to see more choices and softer price growth.”
While inventory is up, Yun said home supply isn’t fulfilling widespread demand just yet. Rising home prices continue to keep plenty of homebuyers on the sidelines. “Even with slightly more homeowners putting their home on the market, inventory is still subpar and not meeting demand. As a result, affordability constraints are pricing out some would-be buyers and keeping overall sales activity below last year’s pace.”
Yun is currently forecasting a one percent decrease for existing home sales to 5.46 million in 2018. He also expects the national median existing-home price to rise by five percent. Regionally, pending home sales increased by 1.1 percent in the South and by 0.7 percent in the West. However, the regions are 0.3 percent and 5.6 percent below last year, respectively.
What Does This Mean for Relocating Buyers and Sellers?
Here are a few tips for relocating buyers and sellers, to make their home buying and selling decision easier:
- Evaluate your area. Use your Cartus preferred broker, as well as real estate websites, to gauge the current inventory and median existing-home price in the neighborhoods on your home buying and selling radar.
- Know how much you can afford. It’s important for transferring employees to know how much home they can afford in their destination. Do they need to sell first? Encourage your relocating employees to speak to a relocation mortgage professional early in the process. Contact your Cartus representative or Guaranteed Rate Affinity account manager if you have questions.
If you didn’t get a chance to attend the Cartus-Guaranteed Rate Affinity webinar, Top Real Estate Trends and their Impact to Your Relocation Program, you can listen to a playback of the webinar and view the presentation for a comprehensive view of the U.S. housing market, including home sale growth, affordability, the mortgage landscape, housing inventory, and the rental market.
Disclaimer: All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate Affinity, LLC does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate Affinity, LCC. Guaranteed Rate Affinity, LLC its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action