Existing home sales, as reported by the National Association of Realtors, increased in June to the highest level since February 2007. Although the June percent share of first-time buyers declined from May to 30%, that share remained at or above 30% for the fourth consecutive month. Total existing home sales increased by 3.2% in June to a seasonally adjusted rate of 5.49 million units combined for single-family homes, townhomes, condominiums and co-ops, up from a downwardly revised 5.32 million units in May. Junel existing sales were up 9.6% from the same period a year ago, and have increased year-over-year for nine consecutive months.
Existing sales increased in all regions, ranging from 4.7% in the Midwest to 2.3% in the South. Year-over-year, all four regions also increased, ranging from 12.7% in the Midwest to 7.3% in the South.
Total housing inventory in June increased by 0.9% from May, and is very slightly above its level a year ago. At the current sales rate, the June unsold inventory represents a 5.0-month supply, lower than the 5.1-month and 5.3-month supply the previous two months. Some 47% of existing homes in June were on the market for less than a month, the highest share since June 2013.
The distressed sales share decreased to 8% from 10% in May, and are well below the 11% share during the same month a year ago. Distressed sales are defined as foreclosures and short sales sold at deep discounts. June all cash sales fell to 22%, matching the lowest share since December 2009. Individual investors purchased a 12 share of homes in June, down from 16% during June of 2014. The accelerating withdrawal of cash investors will create more opportunity for first-time buyers.
The June median sales price of $236,400 was 6.5% above the same month a year ago, represented the 40th consecutive month of year-over-year price increases, and surpassed the peak median sales price set in July 2006. The median condominium/co-op price increased to $226,500 in June, and was up 5.5% from the same month a year ago.
The Pending Home Sales Index increased for the fifth consecutive month in May. The continued increase in existing sales is expected to increase throughout the year, as first-time buyers return to the market.
Article courtesy of NAHB’s Eye on Housing
Changes are coming to the critically important National Flood Insurance Program that could impact real estate transactions and property owners across the country. That’s according to experts from the Federal Emergency Management Agency, which manages the government’s flood insurance program, who spoke to the National Association of Realtors at Flood Insurance 101, a forum during the Realtors’ recent meetings in Washington, DC.
Kristin Robinson, senior advisor, summarized last year’s Biggert-Waters Flood Insurance Reform Act, which reauthorized the critically important NFIP through 2017 so property owners could affordably access flood insurance.
NAHB joined NAR in strongly supporting the legislation. Both groups believe the government’s insurance program saves taxpayers property and money because it increases the number of self-insured properties and reduces the cost of post-flood disaster governmental assistance.
The NFIP is responsible for writing and renewing flood insurance policies for more than 5.6 million home and business owners in more than 21,000 communities nationwide where flood insurance is required for a mortgage. Before Congress passed the legislation, the program operated under short-term extensions. In the past five years, there were 18 extensions and several lapses in program coverage, delaying or cancelling thousands of real estate transactions daily according to NAR’s research, wreaking havoc on real estate and home building markets.
Robinson said the NFIP is $24 billion in debt following several disastrous storms in recent years since the costs and consequences of flooding continue to increase. “For decades the program has made flood insurance available at subsidized rates that did not reflect the true risk of flooding; artificially low rates and discounts are no longer sustainable,” she said.
Andy Neal, actuary, addressed the gradual phase-out of subsidized rates, which was included in last year’s legislation to preserve the flood insurance program and critically important property insurance coverage for the nation’s homeowners. Neal said rate subsidies are being phased out over the next several years to help increase the NFIP’s soundness and financial stability.
The majority of policyholders, more than 80 percent, are not subsidized and won’t be impacted by subsidized rate changes since they are already paying full actuarial rates, he said. However, these owners could see routine annual rate increases.
“Only about 20 percent of NFIP policies receive subsidies, mostly older structures built before the community’s first flood insurance rate map was issued, which are known as pre-FIRM properties. Some of these policyholders will be impacted by the gradual phase-out of subsidized rates; an even smaller number will see immediate changes to their insurance policy rates,” said Neal.
Rate changes are likely to affect owners of subsidized pre-FIRM non-primary residences, business properties, and properties that have experienced severe repetitive flood losses. Owners of some pre-FIRM condos and multi-family units will also see their rates gradually increase. Owners of pre-FIRM primary residences will retain their subsidies unless the policy lapses; it suffers a severe, repeated flood loss; or it’s sold to a new owner, which is retroactive to July 6, 2012, when the legislation was enacted. Some grandfathered principal residences will also lose their subsidies over a several year period, but not until the communities’ flood map is revised.
Neal recommended that home and property owners talk to their insurance agent to determine if their property is currently being subsidized. He said flood insurance rates vary based on a property’s location, elevation and flood risk and can be as low as a few hundred dollars up to $10,000 or more if the property is well below flood level and had severe repeated flood losses.
While higher rates may place a greater burden on families, there are investments homeowners can make to either reduce or better access their flood risk so they can continue to protect their families and possessions from damaging floods. According to Neal, homeowners can lower their risk by elevating their property and potentially reduce their flood insurance rates by having an elevation certificate completed to determine the property’s elevation relative to the base flood elevation. Elevation certificates can cost several hundred dollars to complete but could potentially lower homeowners’ flood insurance premiums.
Some homeowners with flood insurance policies have already received quotes for higher rates, which may be caused by several other factors such as improvements to mapping. As FEMA improves its mapping technology and draws more accurate flood maps, some homes may now be located in a flood zone, or a higher risk zone, where flood insurance is more expensive. Also, some insurance agents may adjust rates to correct previous mistakes made about the home’s features when they are re-evaluating an insurance policy at renewal.
Representatives Bill Cassidy (R-LA) and Maxine Waters (D-CA) have successfully attached an amendment to the Homeland Security Appropriations Bill to delay removal of “grandfathered” flood insurance rates for one year. Efforts are underway to include the delay in the Senate version of the Homeland Security bill.
The grandfathered and other subsidized flood insurance rates are being phased out under the Biggert-Waters Act that extended the National Flood Insurance Program for five years. The House amendment would delay the phase-out for properties “grandfathered” under older rates in areas remapped into a higher-priced flood zone before September 30, 2014. The law’s other phase-outs — for older second homes and business properties and for homes purchased after July 2012 — will continue to take effect on October 1, 2013.
In the meantime, the Senate Banking Committee has agreed to hold a hearing on the affordability of the Biggert-Waters rate provisions. The hearing is expected to be conducted in July.
NAR and SCR will continue to work with Congressional allies on the NFIP issue and will keep you informed on the progress.
Used with permission
Source: National Association of Realtors
On June 29, 2012, both the U.S. Senate and House gave approval to extending authority for the National Flood Insurance Program through 2017. The authorization was part of the larger Federal transportation bill that was approved shortly before Congress recessed for Independence Day week. The bill now awaits President Obama’s signature.
NAHB, along with the National Association of Realtors and other groups worked hard for a long-term extension of the flood insurance program. Since 2008 Congress has been extending the National Flood Insurance Program a few months at a time and twice let the program’s authority lapse, stalling thousands of real estate transactions in the process and potentially interrupting to the most vital part of our nation’s economy: real estate.
Passage of the 5-year reauthorization will bring certainty to real estate transactions in more than 21,000 communities nationwide where flood insurance is required for a mortgage. The bill ensures the program will continue long-term for more than 5.6 million business, and homeowners, who rely on it. Extension of the program also insures that taxpayers will spend less on federal assistance for flood disasters over the long run.
The National Association of Realtors announced this week that it will restate its estimates of existing home sales for the past four years. The group said its overstated estimate of existing home sales was caused by reliance on inaccurate data from local multiple listing services, and some sales being counted more than once.
Read the full report at the Wall Street Journal by clicking here.
UPDATE: CNBC weighs in, says numbers may be 20 percent high. Click here to read the CNBC.com report.
UPDATE: Fox Business News weighs. Click here to read the foxbusiness.com report.
A real estate blog reports that both Fannie Mae and the National Association of Realtors predict that demand for housing will increase by more than 20 percent in 2011.
Read the report at KCMblog.com by clicking here.