Twelve of the 20 fastest-growing industries in the U.S. over the past year are related to real estate and construction, according to data from Sageworks, a financial information company. What’s more, all of the industries on the list that are related to construction saw sales growth at 2 percentage points to 15 percentage points above the average sales growth of all other privately held companies in Sageworks’ database.
Topping the list of fastest-growing U.S. industries: Offices of real estate agents and brokers. Also, among the top six on the list were residential builders, foundation contractors, and lumber wholesalers. In the commercial sector, nonresidential builders, engineering firms, and heavy-construction firms ranked within the top 11.
“The economy is just improving in general, and these industries are indicators that things are moving in the right direction,” says Sageworks analyst Chuck Nwokocha.
Source: “The Fastest-Growing Industries Over the Last Year,” Forbes.com (April 28, 2014)
The nation’s largest home builder, D.R. Horton, is changing its focus from higher-end homes to the entry-level market. The company will be launching a new brand, called Express Homes, which will offer properties priced between $120,000 and $150,000 – much lower than the national median new-home price of $290,000. D.R. Horton executives say demand for lower-priced homes is high, but supply remains inadequate.
"We wouldn't be getting into Express Homes if we didn't think it was the next segment of the market to recover," D.R. Horton CEO Donald Tomnitz told CNBC.
Express Homes will be concentrated in Texas, Florida, and Georgia. The homes will be offered in a turnkey manner, with no options or upgrades available.
D.R. Horton’s move comes at a time when other builders, such as Pulte Homes, are focusing on higher-end homes.
"We view it as the right move," says analyst Stephen East, senior managing director of research firm ISI Group. "Horton's cost structure and operational experience at the entry level makes them one of the few builders that can do this profitably. Also, we are firmly convinced the first-time-buyer segment is getting access to more credit, which will lead to more demand for this low-entry level product."
Source: “Largest U.S. Builder Bets on ‘Bargain’ Homes,” CNBC (April 24, 2014)
Pending home sales—considered a leading indicator of the housing market—rose in March, marking the first gain in the past nine months, according to the National Association of REALTORS®. NAR's Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 3.4 percent to 97.4 from an upwardly revised 94.2 in February.
“After a dismal winter, more buyers got an opportunity to look at homes last month and are beginning to make contract offers,” says Lawrence Yun, NAR chief economist. “Sales activity is expected to steadily pick up as more inventory reaches the market, and from ongoing job creation in the economy.”
Though it has risen after months of stagnation, the index is still 7.9 percent below year-ago levels. Although home sales are expected to trend up over the course of the year and into 2015, this year began on a weak note and total sales are unlikely to match 2013 levels.
The pending sales numbers varied from region to region:
- In the Northeast, the PHSI increased 1.4 percent to 78.8 in March, but is 5.9 percent below a year ago.
- In the Midwest, the index slipped 0.8 percent to 94.5 in March, and is 10.1 percent below March 2013.
- Pending home sales in the South rose 5.6 percent to an index of 112.7 in March, but are 5.3 percent below a year ago.
- The index in the West increased 5.7 percent in March to 91.0, but is 11.1 percent below March 2013.
Existing-home sales are expected to total just over 4.9 million this year, below the nearly 5.1 million in 2013. However, with ongoing inventory shortages in much of the country, the national median existing-home price is expected to grow between 6 and 7 percent in 2014.
Source: NAR
RealtyTrac's March Residential & Foreclosure Sales Report finds that U.S. residential properties – single family homes, condominiums and townhomes – sold at an estimated annual pace of 5,253,464 in March, an increase of 0.4 percent from February and up 8 percent from a year ago. The report has slightly different results than National Association of Realtors® (NAR) numbers issued Tuesday, which include only Realtor-assisted transactions.
RealtyTrac's median sales price in March – including both distressed and non-distressed sales – was $164,500, up 1 percent from February and up 10 percent from March 2013. March was the 24th consecutive month where U.S. median home prices increased on an annual basis, and the 10 percent annual increase was the biggest annual percentage increase in that 24-month span.
"The housing market showed signs of coming out of hibernation in March after a sluggish fall and winter," says Daren Blomquist, vice president at RealtyTrac. "Median home prices increased on a monthly basis following six consecutive months where they were flat or declining. Sales volume also increased slightly from March to February following four consecutive monthly decreases."
Investors and second home buyers accounted for 34 percent of all sales in March based on a look at the number of buyers who listed a home address different than the sale property.
Furthermore, 7 percent of all sales in March were multi-parcel transactions where more than one property was sold on the same date and recorded on the same sales deed document. Multi-parcel transactions are not always reported buy a Multiple Listing Service (MLS).
Despite the annual increase in residential sales volume nationwide, sales volume in March decreased from a year ago in six states and 21 of the nation's 50 largest metro areas.
Florida sales
RealtyTrac found a 1 percent increase in March home sales month-to-month and also a 1 percent increase year-to-year. It found a statewide price decline of 2 percent month-to-month, but an 11 percent price increase year-to-year.
In some cities, prices continue to rise but at a slower pace. RealtyTrac points to Cape Coral-Fort Myers, Fla., as one example, where median home prices are up 86 percent from their bottom in November 2010. But while Cape Coral-Fort Myers recorded a peak year-to-year price increase of 30 percent in January 2013, its year-to-year price increase in March was 14 percent.
According to RealtyTrac analysts, many of the cities that are seeing a slower price increase are the ones that also saw the biggest price bounce earlier in the rebound.
© 2014 Florida Realtors®
New homes – those that are four years old or less – can be cheaper to maintain than older homes, according to data from the American Housing Survey.
Twenty-six percent of home owners spend $100 or more a month on various routine maintenance expenses for their home. However, the study shows that 73 percent of new home owners spend less than $25 a month on routine maintenance costs.
Home owners of new homes tend to spend less on energy costs too. Home owners on average spend 81 cents per square foot per year on electricity. In comparison, home owners of new homes tend to spend 68 cents per square foot per year.
Utilities tend to be less expensive too. All home owners spend, on average, 28 cents per square foot per year on water bills. But on new homes, home owners tend to average 22 cents.
The studies also suggest that owners of new homes also tend to pay less on insurance too: The median cost of all home owners for property insurance is 39 cents per square foot compared to 31 cents per square foot for new homes.
“These data highlight that a new home offers savings over the life of ownership due to reduced operating costs,” according to the National Association of Home Builders’ Eye on Housing blog. “These reduced expenditures represent one of the many reasons that the current system of appraisals needs updating to reflect the flow of benefits that come from features in a new home.”
Source: “New Homes Are Less Expensive to Maintain,” National Association of Home Builders Eye on Housing blog (April 17, 2014)
Nearly half (46 percent) of today's potential home buyers fear they won't qualify for a home mortgage; as a result, they don't try, according to a national consumer survey conducted by OmniTel on behalf of loanDepot.
The survey results suggest that many Americans may have a pent-up demand for homeownership, but they're not acting on it because they think it's not worth the effort.
Potential buyer attitudes
- One in three Americans (29 percent) would like to buy a home within the next two years (42 percent don't currently own a home)
- One in five (20 percent) who already own a home would like to buy another home in the next two years – either a primary residence, investment home, retirement home or vacation home.
- Just over half (56 percent) of all people who would like to buy a home are not pursuing it because they don't think they'll qualify for a loan
- About one-third (30 percent) of current homeowners who want to buy within the next two years also believe they won't qualify for a loan
- While 71 percent of all Americans who want to buy a home in the next two years will need financing, 89 percent haven't taken steps to see if they'd qualify.
Credit scores
Most potential buyers overestimate the difficulty of qualifying for a mortgage. Only 18 percent of all Americans believe it's easier to get a mortgage today compared to a year ago – 43 percent incorrectly say it's harder. The February 2014 Ellie Mae Origination Insight Report found today's average mortgage application approval rate is 55.3 percent compared to 49 percent in 2012.
Credit scores also remain a mystery to most Americans. Half (50 percent) don't know what minimum FICO score is required to qualify for most loans, while 18 percent think they need a minimum FICO score of 680 to 770+ to qualify. About 33 percent of all closed loans in Feb 2014 had an average FICO score of less than 700.
Debt as a barrier to ownership
Many potential buyers overestimate the impact their debt compared to income (DTI) has on their ability to qualify for a mortgage.
Of those potential buyers who aren't even trying, almost a third (34 percent) say their DTI is too high; meanwhile, another 24 percent say their DTI is too low.
First-time buyers
According to the survey, mortgage-qualifying fear keeps a greater number of younger buyers on the sidelines compared to other age groups. Half (48 percent) of all potential homebuyers who don't own a home today are ages 25 to 34; the median age is 31.
The market share of first-time buyers has declined from 54 percent of all sales in March 2009 to 28 percent in February 2014.
The survey was conducted by OmniTel based on interviews conducted March 21-23, 2014. The OmniTel study consists of 1,005 completed interviews, made up of male and female adults (in approximately equal number), all 18 years of age and over. The margin of error on weighted data is +/- 3 percentage points and higher for subgroups.
© 2014 Florida Realtors®
Florida's housing market reported higher median prices, more new listings and a stable level of inventory in March, according to the latest housing data released by Florida Realtors®. Closed sales of single-family homes statewide totaled 20,081 last month, up 2.8 percent over the March 2013 figure.
"March marked the 28th month in a row that statewide median sales prices rose year-over-year for both single-family homes and townhome-condo properties," said 2014 Florida Realtors President Sherri Meadows, CEO and team leader, Keller Williams, with market centers in Gainesville, Ocala and The Villages. "Realtors across Florida are reporting fewer short sales of distressed properties and more interest from potential home sellers as they observe the return of more traditional market conditions. Statewide, new listings for single-family homes in March rose 16.5 percent year-over-year, while new townhouse-condo listings rose 10.3 percent."
The statewide median sales price for single-family existing homes last month was $173,000, up 7.1 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in March was $140,000, up 16.7 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Read more at Florida Realtors®
