Last week, we reported on the financial reasons purchasing a home in today’s market makes sense. The Joint Center for Housing Studies at Harvard University performs a study every year surveying participants for the reasons that American’s feel are most important in regards to homeownership.
The top 4 reasons to own a home cited by respondents were not financial.
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There’s No Place Like Home
Last week, we reported on the financial reasons purchasing a home in today’s market makes sense. The Joint Center for Housing Studies at Harvard University performs a study every year surveying participants for the reasons that American’s feel are most important in regards to homeownership.
The top 4 reasons to own a home cited by respondents were not financial.
Home Sales Skyrocketing!!
Yesterday, the National Association of Realtors (NAR) released their Existing Home Sales Report. The numbers shocked many analysts as they revealed a 10.4% increase over the same month last year.
This is the highest number of sales since September 2013. Sales have increased year-over-year for six consecutive months and the 10.4% increase is the highest annual increase since August 2013. March's sales increase was the largest monthly increase since December 2010.
Lawrence Yun, NAR’s chief economist, explained:
"After a quiet start to the year, sales activity picked up greatly throughout the country in March. The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years."Here is a graph showing home sales so far this year:
An increase in sales occurred in every region of the country even the Northeast that experienced one of their roughest winters in years:
Bottom Line
Houses are flying off the shelves. This may be the perfect time to sell yours.Good News for ‘Typical’ Home Buyers
In a speech delivered earlier this year, Secretary for HUD Julián Castro, called 2015 “A Year of Housing Opportunity”. A recent report by The National Association of Realtors (NAR) revealed that investment home sales decreased 7.4% in 2014 to an estimated 1.02 million.
What does this mean for the ‘typical’ homebuyer?
Lawrence Yun, NAR’s Chief Economist gave some insight:“Despite strong rental demand in many markets, investment property sales have declined four consecutive years to their lowest share since 2010 as rising home prices and fewer distressed properties coming onto the market have further reduced the number of bargains available to turn into profitable rentals.”This is great news for the housing market. If fewer properties are being sold to investors, they are instead being sold to American families who are entering the housing market in droves.
Details of the Report
There are many reasons buyers purchase a home as an investment property. Those who made a purchase in 2014 listed the opportunity for rental income as their top reason (37%). Below is a graph showing the top three reasons:
The median investment-home sales price dropped 3.8% to $125,000, from $130,000 in 2013.
According to Yun, “the decrease in vacation and investment sales prices is likely due to the increase in vacation and investment buyers purchasing condos and townhouses, which contributed to a decline in the median size of 200 square feet for both.”The drop in price can also be attributed to the majority of investment purchases being located in the South (37%) where there are often better deals from a pure pricing standpoint. Below is a map detailing the investment purchases in 2014 by region.
