This is a pretty stunning beat (and #housing stocks are reacting in a big way), but I wonder why the street was expecting a drop. -These numbers are based on closings, so contracts signed in Dec/Jan, when mortgage rates dropped. -Builders reported strong demand in January -Just after the report was released: Home Construction ETF (ITB) up 1.65% near high of session on pace for 3rd straight daily gain hitting a fresh intraday all-time high back to inception in 2006 National Association of REALTORS® Lawrence Yun #realestate #realestateinvesting #realestatenews #housing #mortgage #mortgagerates #fed #inflation #personalfinance https://lnkd.in/dJ5Z2erY
John Dunnery
3mo
Is it the “existing” term in the opening that is causing the surprise reaction? Is that accurate reporting? Is it off a low January existing sale number? Or as you say, just the pull forward from the Nov/Dec contract closings? Only conclusion - no trends.
Leland Spelman
3mo
Fed raised rates 11 times and existing home sales fell by 2M houses per year to about 4M existing home sold. After 2.5 years, 5M housholds were prevented from buying due to high rates, they still want to purchase. These 5M households are pent-up demand. Nornal demand is 6M existing homes sold. That’s 11 million who want to purchase a home. Home builders are going to build about 1M new homes this year. If supply of existing home sales remain at 4M per year and add-in 1M of new homes, that’s 5M of supply vs 11M in demand. Shortages of homes to sell will be with us for many years to come.
Bob Teglia
3mo
I'll bet there is a strong forward correlation between existing supply and new construction deliveries. The downsizing seller/buyer is the ideal deal velocity driver in a higher for longer environment. Who cares what rates are when you can pay cash?!?
In my territory, SF & San Mater to SV areas, buyers are “front running” the market. Ie buy ahead of FED cutting rates, and home prices rising due to increased affordability and influx of buyers. Looking at 2 homes this week, where exactly that is happening. Multiple offer, over list, etc. Have actually been monitoring and seeing this start to occur over the last few months, now will be “off to the races”, due to Powell’s “dovish” FOMC comments yesterday, IMO.
John D. Polemis
3mo
Houses are not stocks, they will drop hard in the upcoming economic contraction or recession or debt crisis.
😥 😭 😪 Buyers could even save as much as $30 billion every year, a recent working paper from the Federal Reserve Bank of Richmond estimated. 😭 "Less MONEY for sellers and more costly for buyers!" 😭
Hank Miller, SRA
3mo
Buyers and sellers are adjusting, nothing absurd or unusual. Areas around North Atlanta remain fiercely competitive, others are balancing. We're seeing those that overpaid 2-3 yrs ago languish a bit - most active are the new sellers. Buyers and agents better be on their toes....
TIMOTHY GEORGE
3mo
Well said residents will see prices going higher with the Fed forecasts of three rate cuts this year.
Mike Murray
3mo
All-cash buyers and home prices keep increasing while the percentage of first time homebuyers declines. We've seen this movie for years now and the single family rental REIT market is worth a look.
VP, Market Economics at Auction.com
3moI'm less surprised by the increase in sales and more surprised by the acceleration in home price appreciation. But maybe I shouldn't be surprised give Auction.com saw a sizable jump in the price bidders at foreclosure auction were willing to pay relative to "after-repair" value in February, and so far in March that price-to-value ratio is above February levels. This bidding behavior typically leads the retail market by three to six months (see chart below).