Home Seller Profits Take Surprising Turn – According to ATTOM Data Solutions’ second-quarter 2021 U.S. Home Sales Report, profit margins for home sellers took an unexpected dip in the second quarter. However, they continue to significantly exceed levels from a year ago. The dip may be a sign that investment returns may be declining. In the second quarter, the typical single-family and condo sale in the U.S. posted an average profit of $94,500. That was up from $90,000 in the first quarter and $60,575 from the second quarter of 2020. But the profit margin declined from 48.4% in the first quarter of this year to 44.9% in the second quarter, ATTOM Data Solutions reports. That drop marked a “rare decline during a time of year that usually produces some of the best returns for sellers,” the report says. “The last time typical returns on investment dropped nationally during any second-quarter period was in 2008.” Also unexpected, the drop in profit gains comes as the national median home price surged to another record in the second quarter of $305,000, up 22% compared to a year earlier.
Source and link to the full article: “U.S. Home Sale Profits Remain High But Take Unusual Fall in Second Quarter,” ATTOM Data Solutions (July 29, 2021)
Fewer Contract Signings Could Signal Market Turn – According to the National Association of REALTORS®’ Pending Home Sales Index, more potential home buyers may be getting priced out of the housing market as home prices continue to rise. Pending home sales declined in June, another sign that the housing market may be slightly cooling. “Pending home sales have seesawed since January, indicating a turning point for the market,” says Lawrence Yun, NAR’s chief economist. “Buyers are still interested and want to own a home, but record-high home prices are causing some to retreat.” Yun attributes the “moderate slowdown in sales” mostly due to the rapid spike in home prices. NAR reports existing-home sales prices jumped 23% compared to year-ago levels in June, reaching a median home price for all housing types of $363,300.
Source and link to the full article: National Association of REALTORS®
15-Year Fixed-Rate Mortgages Reach Record Low – Based on Freddie Mac reports, borrowers can still take advantage of some of the lowest mortgage rates of all time. For the fifth consecutive week, the 30-year fixed-rate mortgage has remained below 3%. Also, the 15-year fixed-rate mortgage averaged 2.10% recently, an all-time low. “As the economy works to get back to its pre-pandemic self, the fight against COVID-19 variants unfolds, owners and buyers continue to benefit from some of the lowest mortgage rates of all-time,” said Sam Khater, Freddie Mac’s chief economist. In 2019, mortgage rates averaged 3.94%, 4.54% in 2018, and more than 6% in 2008. That said, “expect mortgage rates to modestly rise in the following months as most of the economic indicators will start to stabilize,” Nadia Evangelou, senior economist and director of forecasting for the National Association of REALTORS®, said on the association’s Economists’ Outlook blog.
Sales of $1M-Plus Homes Soar – Based on the National Association of REALTORS®’ data, it shows the real estate market is seeing a surge in sales at the very top of the housing market. More expensive properties are selling nearly twice as fast as lower- and mid-priced homes. “Wealthier Americans have benefited greatly during the pandemic thanks to the rising stock market, which typically helps grow net wealth,” Lawrence Yun, chief economist at the National Association of REALTORS®, told The Washington Post. “So there’s greater demand for luxury housing now and that sector isn’t as hamstrung by inventory shortages as the rest of the market.” Record-setting real estate transactions are occurring across the country. The number of home sales in the U.S. priced above $1 million surged 244.4% year over year in May, according to NAR. The number of sales is outpacing sales in the $250,000 to $500,000 price range. Homes in that segment saw a 47.9% increase in May compared to a year earlier.
Source and link to the full article: “Luxury Home Sales Hit New Highs Despite Pandemic Worries,” The Washington Post (July 29, 2021)