Existing Home Sales Rise 0.6%
The National Association of Realtors reports Existing Home Sales Rose 0.6% in January to a seasonally adjusted annualized rate of 6,690,000.
Econoday notes that the reported rise of +0.7% rise in December to 6,760,00 is now a revised 6,650,000 total -0.9%.
Still, it’s pretty clear housing has been firing on all cylinders. Year-over-year sales are up 23.4% and the numbers will look outrageous in May compared to the Covid dip.
Housing Supply
Median Home Price
Year-Over-Year Median Price
The median price of an existing home is $303,900, up 14.1% from a year ago.
These numbers are misleading because they do not take in size of home or location. But they do give a correct sense that prices are rising.
The Case-Shiller National Home Price Index of the sale of the same home was up 9.48% in November.
That’s a better metric but the data lags.
At the current rate of sales, the national supply of homes available for sales is only 1.8 months. That adds to price pressures.
Mish
It would be helpful if the mean were quoted in addition to or instead of the median. The mean captures and weighs all of the data and reflects the aggregate as opposed to just the middle of the data. You can multiply the mean by the number of units and get the the size of the whole market. Not so with the median.
The average house price does not tell the whole story. It would be interesting to see some Quintiles. In my area and I think almost everywhere, houses below 400k has risen at different % in the past 2 years.
In my area here are some examples. A $200k houses now is worth $280k. (40% gains) A $300k house 2 years ago is worth $360K. (30% gai)n. A $400k is worth $460k. A 15% gain.
Houses above $650k really have not increased in price much at all. Houses close to 1 million are flat. No gains.
I have a rental that was worth $50k 3 years ago and will now go for $90k. So that is a 80% gain.
The percent gains drop with the price of the house.
Very good point. But pretty typical. I’ve always seen that the very high end houses seldom appreciate much…because of low demand for them. My best gains have certainly been on the houses I paid the least for….no doubt about it.
At times this is even more pronounced. When I sold my first home (which I’d picked up for a song in ’89) to buy the one I live in now (way back in the early 90’s), I was shocked to see the house I moved out of appreciate tremendously over the first several years as it changed hands….while the new house, which I paid 3X the amount of the first one….rose in value much slower. It has evened out over the long haul as my “expensive” house turned out to be way less expensive than most new houses built a decade later.
Mish would you consider the housing market a bubble? When do you think will be a good time to buy again?
Either reduce demand (which is nearly impossible right now due to our housing shortage) or increase supply.
Demand can be reduced by increasing interest rates which increases payments and probably would decrease the “cost” of housing on paper or reducing the population of homebuyers (perhaps this will happen in our demographics when baby boomers either move to senior living or pass away).
Supply can be increased by changing zoning laws and by requiring better planned communities. A well planned community can make denser housing more enjoyable than an unplanned community with less dense housing. Our suburban sprawl increases traffic, infrastructure costs, and land waste while increasing the cost of housing. In many other nations most of the people don’t live in a single family home.
For the average 20 – 40 year old, buying a home will be very difficult.
What changes do you expect to be proposed to fix the problem?
Not sure if this was about what I wrote or about the real topic. 🙂
Here, there might be a lot of political fallout if people get really gouged on their power bills. That will not go over well. I see that as the biggest yuch-berry, and it hasn’t even been swallowed yet.
The water problem is completely storm-related and will be history in a week…they won’t fix anything, I wouldn’t expect.
On the power failure, it will be interesting to see if very many people connect the dots between the legislature and the governor……and the oil and gas money that bought and paid for them. I seriously doubt very many people will….
Kaching. Not all the news is bad.
I’m sure to be facing a lot of repairs next week. We are finally above freezing but it looks like it’ll take another day or two for this to melt off. Good riddance..But we were extremely lucky to have gotten off light and my heart goes out to the people who had to suffer with no heat and no water.
Water problem looks to be extended for several more days. People are melting snow to flush toilets…not sure what happens when the snow melts.