FHFA: Home Prices Rose in 97 out of 100 Metro Areas

 By Amy Connolly

The Federal Housing Finance Agency said U.S. home prices rose 6.6% between Q1 2023 and Q1 2024. Home prices continue to grow at a steady pace.

WASHINGTON – Three Florida metro areas saw a more than 10% increase in home prices between the first quarter of 2023 and the first quarter of 2024, according to the Federal Housing Finance Agency House Price Index (FHFA HPI), which tracks all U.S. mortgages under government-sponsored enterprises, notably Fannie Mae and Freddie Mac.

West Palm Beach-Boca Raton-Boynton Beach (14% increase in year-over-year prices); Miami-Miami Beach-Kendall (11.7%); and Fort Lauderdale-Pompano Beach-Sunrise (10.5%) ranked 3rd, 8th and 12th respective in the FHFA HPI Top 100 Metro Area Rankings. 

At the same time, Tampa-St. Petersburg-Clearwater saw a 6.9% YoY change, but a -0.4% QoQ drop, making it 51st in the FHFA HPI’s ranking. The Jacksonville metro area saw a 6.4% YoY and 1.5% QoQ change, putting it at 58th in the FHFA HPI’s ranking. Orlando-Kissimmee-Sanford saw a 5.2% YoY change and a -0.5 QoQ decline, putting it 72nd on the ranking.

Overall, U.S. house prices rose 6.6% between Q1 2023 and Q1 2024, the FHFA HPI found.

House prices across the nation were up 1.1% compared to Q4 2023. FHFA’s seasonally adjusted monthly index for March was up 0.1% from February.

“U.S. house prices continued to grow at a steady pace in the first quarter,” said Dr. Anju Vajja, deputy director for FHFA’s Division of Research and Statistics. “Over the last six consecutive quarters, the low inventory of homes for sale continued to contribute to house price appreciation despite mortgage rates that hovered around 7%.”

The five states with the highest annual appreciation were 1) Vermont, 12.8%; 2) New Jersey, 11.6%; 3) New York, 10.9%; 4) Delaware, 10.7% ; and 5) Wisconsin, 9.9%. District of Columbia had a decline of -1.5%.

House prices rose in 97 of the top 100 largest metropolitan areas over the last four quarters. The annual price increase was the greatest in Allentown-Bethlehem-Easton, PA-NJ at 16.0%. The metropolitan area that experienced the most significant price decline was Urban Honolulu, HI at -3.2%.

All nine census divisions had positive house price changes year-over-year. The Middle Atlantic division recorded the strongest appreciation, posting a 9.9% increase from the first quarter of 2023 to the first quarter of 2024. The West South Central division recorded the smallest four-quarter appreciation, at 3.7%.

The FHFA HPI is a comprehensive collection of publicly available house price indexes that measure changes in single-family home values based on data that extend back to the mid-1970s from all 50 states and over 400 American cities. It incorporates tens of millions of home sales and offers insights about house price fluctuations at the national, census division, state, metro area, county, ZIP code, and census tract levels. FHFA uses a fully transparent methodology based upon a weighted, repeat-sales statistical technique to analyze house price transaction data.

FHFA releases HPI data and reports quarterly and monthly. The flagship FHFA HPI uses seasonally adjusted, purchase-only data from Fannie Mae and Freddie Mac. Additional indexes use other data, including refinances, Federal Housing Administration mortgages and real property records. 

© 2024 Florida Realtors®

U.S. Existing-Home Sales Retreated 1.9% in April

 WASHINGTON – Existing-home sales receded in April, according to the National Association of Realtors®. All four major U.S. regions posted month-over-month declines. Year-over-year, sales decreased in the Northeast, Midwest and South but increased in the West.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – slid 1.9% from March to a seasonally adjusted annual rate of 4.14 million in April. Year-over-year, sales fell 1.9% (down from 4.22 million in April 2023).

"Home sales changed little overall, but the upper-end market is experiencing a sizable gain due to more supply coming onto the market," said NAR Chief Economist Lawrence Yun.

Total housing inventory registered at the end of April was 1.21 million units, up 9% from March and 16.3% from one year ago (1.04 million). Unsold inventory sits at a 3.5-month supply at the current sales pace, up from 3.2 months in March and 3.0 months in April 2023. For homes priced $1 million or more, inventory and sales increased by 34% and 40%, respectively, from a year ago.

The median existing-home price for all housing types in April was $407,600, an increase of 5.7% from the previous year ($385,800). All four U.S. regions registered price gains.

"Home prices reaching a record high for the month of April is very good news for homeowners," Yun added. "However, the pace of price increases should taper off since more housing inventory is becoming available."

Realtors® Confidence Index

According to the monthly Realtors® Confidence Index, properties typically remained on the market for 26 days in April, down from 33 days in March but up from 22 days in April 2023.

First-time buyers were responsible for 33% of sales in April, up from 32% in March and 29% in April 2023. NAR's 2023 Profile of Home Buyers and Sellers – released in November 20234 – found that the annual share of first-time buyers was 32%.

All-cash sales accounted for 28% of transactions in April, identical to March and one year ago.

Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in April, up from 15% in March but down from 17% in April 2023.

Distressed sales – foreclosures and short sales – represented 2% of sales in April, virtually unchanged from last month and the prior year.

Mortgage rates

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.02% as of May 16. That's down from 7.09% the previous week but up from 6.39% one year ago.

Single-family and condo/co-op sales

Single-family home sales decreased to a seasonally adjusted annual rate of 3.74 million in April, down 2.1% from 3.82 million in March and 1.3% from the prior year. The median existing single-family home price was $412,100 in April, up 5.6% from April 2023.

At a seasonally adjusted annual rate of 400,000 units in April, existing condominium and co-op sales were unchanged from last month and down 7% from one year ago (430,000 units). The median existing condo price was $365,300 in April, up 5.4% from the previous year ($346,700).

Regional breakdown

Existing-home sales in the Northeast waned 4% from March to an annual rate of 480,000 in April, a decline of 4% from April 2023. The median price in the Northeast was $458,500, up 8.5% from the previous year.

In the Midwest, existing-home sales slipped 1% from one month ago to an annual rate of 1 million in April, down 1% from one year ago. The median price in the Midwest was $303,600, up 6% from April 2023.

Existing-home sales in the South descended 1.6% from March to an annual rate of 1.9 million in April, down 3.1% from the prior year. The median price in the South was $366,200, up 3.7% from last year.

In the West, existing-home sales retracted 2.6% from a month ago to an annual rate of 760,000 in April, an increase of 1.3% from one year before. The median price in the West was $629,600, up 9.3% from April 2023.

© 2024 National Association of Realtors® (NAR)

Florida's April Home Sales, Median Prices Rise

 By Marla Martin

Closed sales, median sales prices rose from one year ago.

 

- Single-family homes sales up 5.8% and prices up 4.9% $429,900.

- Condo-townhouse sales up 1.9% and prices 3.1% to $335,000.

ORLANDO, Fla. – Florida’s housing market in April showed more closed sales, more for-sale inventory, more new listings and higher median prices compared to a year ago, according to Florida Realtors®’ latest housing data.

“More active listings provide more options and more homeownership opportunities for buyers, which in turn helps encourage buyer demand,” said 2024 Florida Realtors® President Gia Arvin, broker-owner with Matchmaker Realty in Gainesville. “In time, having more available inventory could ease the pressure of rising prices; however, cautious buyers and sellers are still wary of high mortgage interest rates, which are hovering around 7%.”

Last month, closed sales of existing single-family homes statewide totaled 24,682, up 5.8% year-over-year, while existing condo-townhouse sales totaled 10,228, up 1.9% over April 2023. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

Florida Realtors Chief Economist Dr. Brad O’Connor noted that while sales rose compared to the same time last year, they have not reached pre-pandemic levels.

“Closed sales remain lower than what we may have been used to prior to the pandemic, but they are holding fairly steady,” he said. “Meanwhile, prices continue to rise at a much more sustainable pace and options for buyers continue to expand.”

The statewide median sales price for single-family existing homes in April was $429,900, up 4.9% over April 2023, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $335,000, up 3.1% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

“As for the incoming supply of homes for sale, new listings of single-family homes remained elevated in both property type categories,” said O’Connor. “In April, new listings of single-family homes were up 25% compared to a year ago, although this level of new listings, while significantly greater than last year, is more in line with our typical pre-pandemic numbers. Similarly, new listings of townhouses and condos were up 24.2% year-over-year in April. But in this property type category, we are seeing a level of new listings higher than what we would have expected pre-pandemic.”

He said, “With new listings outpacing sales, and homes on the market a bit longer than a year ago, we have seen quite a bit of inventory growth in recent months here in Florida. You're probably seeing lots of headlines about the state’s rapid rise in inventory but let’s put that in perspective. Single-family inventory is not quite back to the typical 2014-to-2019 level, but it’s getting close, while the condo-townhouse inventory is now over the typical level of inventory that we had in the years ahead of the pandemic.”

Still, O’Connor noted, “The fact that the measure of days on market is more similar to what we saw immediately ahead of the pandemic or even below that level in some cases, gives us reason to be positive about our recent increase in inventory. This increase is going to ease price growth and allow for more opportunities for prospective buyers who were left in the cold when inventory was so low just a couple of years ago.”

On the supply side of the market, inventory (active listings) rose year-over-year with single-family existing homes at a 4.2-months’ supply in April, while condo-townhouse inventory was at a 6.9-months’ supply.

© 2024 Florida Realtors®

New Florida Law Roils Condo Market

 Some owners in older condo buildings are putting their units on the market after receiving six-figure special assessments following the Surfside collapse.

TALLAHASSEE, Fla. – A recent state law to ensure condominiums meet structural safety standards has many condo associations levying special assessments for repairs and upgrades, leaving the condo owners – many on fixed incomes -- to foot huge bills.

Repairs that include roof replacements, façade waterproofing and others bring the buildings to code but cost hundreds of thousands of dollars per unit. Some owners have little choice but to sell their condos, but many are selling for less than expected because buyers don't want to pay pending repair assessments after the sale.

In Miami, housing prices have more than doubled since 2018, according to Redfin. Since the first quarter of 2023, South Florida's condo for-sale inventory has more than doubled to more than 18,000 units, and about 38% of housing stock available in Miami is condos, according to Zillow.

About three-quarters of those condos are 30 years or older and carry assessments and large repairs with them.

ISG World reports that prices on these condo units are 12% less than they were 30 years ago, while condo units built less than 30 years ago are selling at 38% more today than they did in 2020.

"It's not the buyers that aren't qualifying," said Craig Studnicky, chief executive at ISG World. "It's the buildings that aren't qualifying."

Source: Wall Street Journal (05/13/24) Acosta, Deborah

© Copyright 2024 Smithbucklin

Florida Leads in Housing Boom to Ease Shortage

 By Tim Henderson

Florida is one of six states that significantly added to the nation’s housing supply and one of five that saw a 6% growth in housing units.

WASHINTON –The United States has added almost 5 million housing units since 2020, most heavily in the South and most of them single-family homes, making a housing shortage look conquerable in much of the nation.

Still, even more homes need to be built, especially single-family homes, experts say, and continuing high interest rates are hurting potential homebuyers.

Almost half of the housing increase from April 2020 to July 2023 came in six states: Texas, Florida, California, North Carolina, Georgia and Tennessee, according to a Stateline analysis of U.S. Census Bureau estimates to be released Thursday. That mirrors America's post-pandemic moving patterns to plentiful suburban housing in Texas and Florida, but also California's persistent push for more apartments in resistant areas across the state.

Housing experts caution that the supply has still not caught up with demand even after another good year for home construction in 2023. Last year produced the most housing units since 2007. "One Good Year Does Not Solve America's Housing Shortage" was the title of a Moody's Analytics report in January, which found single-family homes in particular remain in short supply.

Moody's estimated a shortfall of about 1.2 million single-family homes and 800,000 other units, noting that home sales had slowed since reaching all-time-high prices in 2022 as interest rates climbed and made purchases even more unaffordable.

The National Association of Realtors, in a February report, offered a higher housing shortage estimate of about 2.5 million units, mostly single-family homes.

Most of the new housing units in recent years have been single-family homes, according to a separate U.S. Census Bureau construction survey through the end of 2023. Production of new single-family homes reached more than 1 million annually in 2022 and 2023 for the first time since the housing bubble burst in 2007, according to the survey.

Apartment construction is also at historic levels, with 438,500 units built last year, the highest level since 1987. The number of apartments under construction at the end of the year, about 981,000, was an all-time high since the survey began in 1969.

New housing should continue to arrive at a strong pace for several years because so much construction has already started, said Daniel McCue, a senior research associate at Harvard University's Joint Center for Housing Studies.

"New construction can really only slow overheated rental rates, but it's really hard-pressed to bring down rents or make things more affordable for people at the bottom," McCue said. "Our focus is not on the overall shortage of housing units, but on the specific shortage of affordable and available homes for low- and moderate-income people."

The housing unit data released Thursday, which tracks changes through the middle of 2023, shows continued increases across the country, with about 1.6 million new units annually for the past two years.

Increases were concentrated in the West and South, with half the 4.8 million new units since 2020 in a handful of states: Texas (about 806,000), Florida (586,500), California (371,000), North Carolina (270,500), Georgia (200,000) and Tennessee (164,000).

Percentage increases were highest in fast-growing Western states: Utah (up 9% since 2020), Idaho (up 8%) and Texas (up 7%). Five states had 6% growth in housing units: South Carolina, South Dakota, Florida, Colorado and North Carolina.

Arizona, Georgia and Nevada — all of which are key swing states in this year's presidential election — were not far behind, with 5% growth in housing units.

The housing shortage has become a major political talking point, even as states scramble to get more units built and people housed.

Even with Utah's nation-leading growth in housing units for the decade, for example, Republican Gov. Spencer Cox called high housing prices "the single largest threat to our future prosperity" in his State of the State address this year.

"Housing attainability is a crisis in Utah and every state in this country," Cox said, announcing a plan to build 35,000 small "starter" single-family homes in the next five years.

The Federal National Mortgage Association, known as Fannie Mae, reported last year that the typical homebuyer paid 35% of their income in mortgage payments in October, the highest since at least 2000.

A Utah-based think tank, the Kem C. Gardner Policy Institute at the University of Utah, in a report last year said the pandemic years brought a boom-and bust-cycle to the state's housing construction. New permits increased 26% in 2021, only to drop 21% the next year as interest rates climbed. The new U.S. Census Bureau figures show new units in the state peaking at 38,500 in 2022 and falling back to about 30,000 in 2023.

All states saw some housing growth, according to the Stateline analysis and census data, but it was slowest in some states affected by poverty or low population growth. There was only a 1% increase in housing units since 2020 in Rhode Island, Illinois, West Virginia, Connecticut, Alaska and New Jersey.

Alaska Republican Gov. Mike Dunleavy also mentioned housing affordability as one of the biggest challenges facing the state this year in his State of the State address. Dunleavy proposed a state-funded down payment assistance program for first-time homebuyers, and lumber grading changes designed to make homebuilding materials more affordable.

New Jersey Democratic Gov. Phil Murphy mentioned in his State of the State address the state's low housing stock at a time when tens of thousands of New Yorkers are seeking suburban housing there.

"If our population grows while our housing stock remains steady, homeownership will be a luxury reserved only for those at the top. That is untenable," Murphy said.

© Copyright 2024, The Arizona Daily Sun, all rights reserved.

Floridians Optimistic About U.S. Economy

Expectations among Florida residents about the U.S. economy over the next five years reached levels not seen since July 2021.

GAINESVILLE, Fla. – Consumer sentiment among Floridians ticked up 1.3 points in April to 73.3 from March’s revised figure of 72. National sentiment, on the contrary, dropped 2.2 points.

“The rise in consumer sentiment is attributed to Floridians' positive views regarding the nation’s economic outlook. In particular, expectations about the U.S. economy over the next five years reached levels not seen since July 2021. This period coincides with the escalation of inflationary pressures that began in the second quarter of 2021. However, these price hikes were not initially viewed as concerning. While average annual inflation surged from 1.9% to 4.8% between the first and second quarters of 2021, reaching 5.3% in the third quarter, it wasn't until 2022 when the Fed initiated one of the most aggressive tightening cycles in decades by increasing interest rates to control it,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.

Among the five components that make up the index, four increased and one decreased.

Floridians’ opinions about current economic conditions improved in April. Views of personal financial situations now compared with a year ago increased 1.4 points from 59.8 to 61.2. However, opinions varied by demographics with people younger than 60 and people with an annual income under $50,000 reporting less favorable opinions.

Opinions as to whether now is a good time to buy a big-ticket item, such as refrigerators, cars, or furniture increased one point from 62.9 to 63.9. Similarly, opinions were split by demographics, but in this case women, people older than 60, and people with an annual income under $50,000 expressed more pessimistic views.

Future economic expectations portrayed a mixed outlook in April. On the one hand, expectations of personal finances a year from now decreased 1.1 points from 83.7 to 82.6. However, men and people older than 60 reported more positive expectations. On the other, outlooks about the country’s economy were more optimistic.

 Expectations about the U.S. economic conditions over the next year increased 2.9 points from 73.3 to 76.2, while views of U.S. economic conditions over the next five years increased 2.1 points from 80.5 to 82.6. Notably, these expectations were shared by all Floridians, except for people with an annual income under $50,000, who reported less favorable views regarding the latter component.

“Following a robust labor market and rising consumer confidence levels, economic growth remained positive in the first quarter of the year, driven by increases in consumer spending, with an annual rate of 1.6%. However, inflation has risen over the same period, despite the Fed’s efforts to control it. The latest inflation data from both the Department of Labor Consumer Price Index (CPI) — and the Department of Commerce Personal Consumption Expenditure (PCE) Price Index, the Fed’s preferred measure of inflation — suggest a potential trend reversal, with increases observed in March,” said Sandoval.

“Looking ahead, this reversal is likely to deter the Fed from implementing interest rate cuts during the summer, as previously anticipated. Moreover, it could translate into reduced consumer confidence, further exacerbating the risk of a potential downturn and hampering the expectation of reduced inflation without a recession,” Sandoval added.

Conducted March 1 to April 25, the UF study reflects the responses of 250 individuals who were reached on cellphones and 293 individuals reached through an online panel, a total of 543 individuals, representing a demographic cross section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2, the highest is 150.

Source: University of Florida, Bureau of Economic and Business Research, Elizabeth Lynch

© 2024 Florida Realtors®

Pending Home Sales Increased 3.4% in March

Existing-home sales are forecast to rise by 9% in 2024 to 4.46 million

WASHINGTON – Pending home sales in March climbed 3.4%, according to the National Association of Realtors®. The Northeast, South and West posted monthly gains in transactions while the Midwest recorded a loss. Year-over-year, the Northeast and South registered decreases but the Midwest and West improved.

The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – increased to 78.2 in March. Year over year, pending transactions were up 0.1%. An index of 100 is equal to the level of contract activity in 2001.

"March's Pending Home Sales Index – at 78.2 – marks the best performance in a year, but it still remains in a fairly narrow range over the last 12 months without a measurable breakout," said NAR Chief Economist Lawrence Yun. "Meaningful gains will only occur with declining mortgage rates and rising inventory."

Quarterly U.S. economic forecast

NAR forecasts that existing-home sales will rise by 9% in 2024 to 4.46 million (from 4.09 million 2023) and another 13.2% in 2025 to 5.05 million (from 2024). Housing starts are expected to rise by 1.2% in 2024 to 1.43 million (from 1.413 million in 2023) and 4.9% to 1.5 million in 2025 (from 2024).

"Home sales have lingered at 30-year lows, and since 70 million more Americans live in the country now compared to three decades ago, it's inevitable that sales will rise in coming years," explained Yun. "Inventory will grow steadily from more home construction, and various life-changing events will require people to trade up, trade down or move to another location."

NAR expects that median home prices will increase by 1.8% in 2024 to a record of $396,800 (from $389,800 in 2023) and another 1.8% in 2025 to $403,800 (from 2024). NAR forecasts a modest reduction – 0.6% – in the median new home price to $426,100 in 2024 (from $428,600 in 2023), reflecting the building of smaller-sized homes. The association anticipates the median new home price will jump 3.4% to $440,500 in 2025 (from 2024).

"Home prices are expected to rise roughly in line with consumer price inflation and wage growth over the next two years," added Yun. "Most homeowners are on strong financial footing in current market conditions, with only 2% of sales classified as being distressed."

NAR expects home sales to steadily improve while home prices continue to hit record highs.

"Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales," explained Yun. "Given the lingering housing shortage, home prices will march higher, albeit much more slowly than in the past."

Pending home sales regional breakdown

The Northeast PHSI increased 2.7% from last month to 65.1, a decline of 0.3% from March 2023. The Midwest index fell 4.3% to 78.1 in March, up 1.3% from one year ago.

The South PHSI improved 7.0% to 95.8 in March, dropping 1.5% from the prior year. The West index rose 6.8% in March to 61.0, up 3.6% from March 2023.

 "Home prices rising faster than income growth is not healthy and adds challenges for first-time buyers," said Yun.

Yun further noted, "Inventory will gradually rise from recent growth in home building. Additionally, many sellers who delayed listing in the past two years will start putting their homes on the market to move to a different home that better fits their new life circumstances – such as changes in family composition, jobs, commuting patterns and retirees wanting to be closer to their grandkids."

The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

Pending contracts are good early indicators of upcoming sales closings. However, the amount of time between pending contracts and completed sales is not identical for all home sales. Variations in the length of the process from pending contract to closed sale can be caused by issues such as buyer difficulties with obtaining mortgage financing, home inspection problems, or appraisal issues.

The index is based on a sample that covers about 40% of multiple listing service data each month. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

© 2024 National Association of Realtors® (NAR)