From News 12:
Home prices on Long Island are hitting record highs this summer.
In July, Nassau County’s median closing price was $725,000.
The price is $30,000 more than the month before, and the highest on record.
Meanwhile, Suffolk’s median closing price was also up — tying a record high at $575,000.
The numbers are according to OneKey MLS, which tracks housing prices.
From Redfin:
Just over 8% of U.S. homes are worth $1 million or more, near June 2022’s all-time high of 8.6%.
This analysis estimated current home values using the Redfin Estimate, public records and MLS data, and past home values using public records and MLS data. The figures in this report represent June 2023, unless otherwise noted. See the end of this report for a detailed methodology.
The share of homes worth seven figures is on the upswing after dipping to a 12-month low of 7.3% in February. That’s because home prices are rising on a year-over-year basis after falling at the beginning of the year. The median U.S. home-sale price rose 3% in July, the biggest increase since last November. Prices are rising faster for high-end homes, with the median sale price of U.S. luxury homes up 4.6% year over year to $1.2 million in the second quarter.
Today’s elevated mortgage rates are discouraging potential home sellers, with homeowners staying put to keep their relatively low mortgage rates. Inventory is so low that even though many buyers are sidelined by high rates, those who are in the market are competing for the few homes for sale. That’s driving home prices up and pushing many of those on the cusp above the million-dollar mark.
“The supply shortage is making many listings feel hot,” said Redfin Economics Research Lead Chen Zhao. “In most of the country, expensive properties that are in good condition and priced fairly are attracting buyers and in some cases bidding wars, mostly because for-sale signs are few and far between right now.”
“Still, there’s no rush to offload high-value homes,” Zhao continued. “Recent economic signals that the U.S. may avoid a broad recession could cause high-end buyers to feel more confident in making a major purchase in the coming months. There may be more demand coming down the pipeline.”
For homebuyers, the uptick in homes worth seven figures illustrates ongoing challenges with housing affordability in the U.S. And for buyers using loans, monthly payments on million-dollar homes are even more expensive than they were a year ago. A buyer purchasing a $1 million home would have a monthly mortgage payment of $6,604 with June’s average 6.7% mortgage rate, up from $5,984 with last June’s typical rate of around 5.5%.
The share of homes worth seven figures has doubled since before the pandemic; just over 4% of homes were valued at $1 million or more in June 2019. The share has shot up because home prices skyrocketed in 2020 and 2021 as record-low mortgage rates and remote work drove Americans to buy homes.
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Parts of New England are gaining million-dollar homes fastest. Just over one-quarter (25.8%) of homes in the Bridgeport, CT metro–which is made up of many popular New York City suburbs–are worth at least $1 million, up from 23.1% a year ago, the biggest increase of the metros in this analysis. It’s followed by Boston, where the share increased from 20.3% to 21.5%, and Newark, NJ (8.7% to 9.7%).
From HousingWire:
ast week ended with a wild ride for mortgage rates. We anticipated the two inflation reports could help mortgage rates, however, we had a bad bond auction last Thursday, and the 10-year yield rose sharply. Weekly active inventory grew slowly again and purchase apps were down week to week again.
Last week we started with lower bond yields as we anticipated inflation reports to continue the trend of slower year-over-year inflation data. This happened as expected, except we had a lousy bond auction, which meant too much debt supply came online with insufficient buyers. This pushed yields higher Thursday and Friday to move mortgage rates to 7.19%.
A valid case for higher mortgage rates in the short term is that we are simply going to be in an environment where we don’t have a lot of bond buyers versus the supply coming in, thus making it harder for mortgage rates to go lower. We saw an example of that last week.
For my 2023 forecast, my range on the 10-year yield has been between 3.21%-4.25%, emphasizing that the bond yields can go lower than 3.21% only if the labor market breaks. The labor market breaking to me is if jobless claims on a four-week moving average go over 323,000; currently, that data is 231,000. As the economy has stayed firm, bond yields are at a higher level of my range for 2023.
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The painful housing inventory story of 2023 continues as we had yet another week of slow inventory growth. Last year when mortgage rates spiked higher, inventory growth was much faster, but we were also working from the lowest levels recorded in history in March of 2022. This year, it’s been a much different story.
From the Philly Inquirer:
Last summer, her Shore house in Avalon fully booked, Katie Leighton took the family on a vacation to Europe. But this summer, a gaping hole emerged in prime season as some of her regular renters decided to take their families to Europe.
So she and her family spent a lovely week at the Jersey Shore.
“My kids have never spent a week at the beach at high season because it was always rented,” said Leighton, of Wilmington. “They were doing cartwheels.”
After three summers of a pandemic-bloated crush of demand that filled up Shore homes, created new investors, and pumped up rental and sale rates, things this summer are quite different. Unheard of in past summers, weeks are going unrented, and rental prices are dropping.
Maryellen Sheehan, who owns five Shore houses in Ocean City and manages others, says the market has definitely softened this summer.
One owner of a home she helps manage dropped a prime week’s price of a five-bedroom place with ocean views from $10,000 to $5,000 in order to get it booked.
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It’s a big deflation from the last three summers, when it seemed nobody went anywhere else but the Shore.
But as owners raised their rates, people began to balk.
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Overall, she said, there were 5,174 available listings at the Jersey Shore in June, down to 4,988 in July. This still represented a 13% increase in availability from a year earlier, possibly reflecting an increase in investors new to the market. Demand did not keep pace, she said.
From Reuters:
The U.S. Treasury Department will soon propose a rule that would effectively end anonymous luxury-home purchases, closing a loophole that the agency says allows corrupt oligarchs, terrorists and other criminals to hide ill-gotten gains.
The long-awaited rule is expected to require that real estate professionals such as title insurers report the identities of the beneficial owners of companies buying real estate in cash to the Treasury’s Financial Crimes Enforcement Network (FinCEN).
FinCEN is slated to propose the rule sometime this month, according to its regulatory agenda, though the timeline could slip, said two people briefed on the developments. Anti-corruption advocates and lawmakers have been pushing for the rule, which will replace the current patchwork reporting system.
Criminals have for decades anonymously hidden ill-gotten gains in real estate, Treasury Secretary Janet Yellen said in March, adding that as much as $2.3 billion was laundered through U.S. real estate between 2015 and 2020.
“That’s why FinCEN is taking this important step to put something officially on the books that would root out money laundering through the sector once and for all,” said Erica Hanichak, government affairs director of advocacy group the FACT Coalition.
Some advocates say FinCEN, which declined to comment on the timing of the proposal, has moved too slowly. Officials first said in 2021 that they planned to implement the rule.
From CNBC:
Rents in Manhattan hit a new high in July, as higher interest rates and low supply continued to drive up prices.
The average monthly rent in July was $5,588, up 9% over last year and marking a new record. Median rent, at $4,400 per month, also hit a new record, along with price per square foot of $84.74, according to a report from Miller Samuel and Douglas Elliman. It was the fourth time in five months that Manhattan rents hit a record.
Despite a loss in population during the pandemic, average rents in Manhattan are now up 30% compared to 2019. Jonathan Miller, CEO of Miller Samuel, the appraisal and research firm, said August rents could mark a new record because it is typically the peak rental month as families look to move before the start of the school year.
“We could see another month of records,” Miller said.
Manhattan’s soaring rents have continued to defy predictions of analysts and economists. The borough’s population dropped by 400,000 between June 2020 and June 2022, according to U.S. Census data. While experts say the population has increased since last year, they say it is still likely below 2019.
What’s more, offices in Manhattan remain less than half occupied due to remote work. According to Kastle Systems, New York offices were only 48% occupied at the end of July.
Yet despite the population loss and rise of remote work, Manhattan rents continue to soar. Brokers say the lack of apartments for sale, due to higher interest rates, have forced many would-be buyers to rent. Younger workers also have flocked to the borough since the pandemic.
From MSN:
“It’s pretty consistent nationally,” said Mikaela Arroyo, director of the New Home Trends Institute at John Burns Real Estate Consulting.
In an April report, JBREC surveyed 290 residential architects, designers and design-oriented builders and learned exactly how much homes are shrinking: A third of detached homes now being planned and built are expected to be under 2,000 square feet, and 70% will be under 2,500 square feet, the company found. Townhomes are expected to be between 1,500 and 2,000 square feet. “While overall home sizes will shrink, townhomes may grow as would-be detached homes become attached to increase density,” the report said.
And although “a lot of the market has historically been really resistant to density,” Arroyo said, even markets where lots and homes are typically bigger are seeing it increase. “Areas like Texas, where density wasn’t very common, we’re now seeing it increasing just because that’s the only way to get prices to an affordable level.”
As newly built homes get smaller, builders are allocating more space for more heavily trafficked areas of the house.
Builders are saying goodbye, for instance, to the formal dining room and welcoming a bigger kitchen island with seating. They’re adding another small bedroom instead of a bigger walk-in closet for the primary bedroom and including more outdoor space by forgoing a loft or a bonus room upstairs.
“We’re seeing a lot of deletion of separate, defined spaces,” Arroyo said.
“Think about the dining room and the living room. In the past, you would have had the downstairs of the house, which includes the kitchen, dining and living rooms. Now it’s just one great room and one kitchen,” she said. “And the kitchen is actually getting larger than it used to be, because we’re taking away the dining room.”
Builders are shrinking homes in part to reduce costs, according to the JBREC report. Designers said that they were redesigning projects to reduce the cost of building by 7% to 10%.
From Black Knight:
The Black Knight Home Price Index (HPI) hit an all-time high in June, this time on both seasonally adjusted (SA) and unadjusted levels, with nearly every major market experiencing month-over-month growth
Prices have now reached new peaks in 30 of the 50 largest markets, with several northeastern metros currently 5-8% above 2022 highs
Home prices rose by +.67% (SA) month-over-month in June, while after slowing for 14 consecutive months, the annual growth rate rose to +0.8% in June, up from a revised +0.2% in May
Broadly speaking, annual growth is strongest among Midwest and Northeast markets, while West Coast and pandemic boom markets continue to see prices run below last year’s levels
Despite overall outstanding mortgage debt surpassing $13T for the first time ever, home price growth has also pushed homeowner equity levels back to within 3% of 2022 peaks
Total mortgage holder equity topped $16T again in June, with tappable equity – the amount that can be accessed while retaining a 20% equity stake – climbing to $10.5T, within $434B (4%) of 2022 peaks
While the number of underwater homeowners is up nearly 70% from last year, it remains 52% below 2019 levels, with just 344K (0.65%) of mortgage holders nationwide currently owing more than their home is worth
From NJ 92.7:
#10. Delaware
#9. Maryland
#8. Georgia
#7. Virginia
#6. Texas
#5. California
#4. North Carolina
#3. Florida
#2. New York
#1. Pennsylvania
From Morningstar:
Forecasts for the July U.S. jobs report call for yet another month of healthy gains in the labor market, with no signs of a recession. Still, if the report comes in on target, economists see little reason for the Federal Reserve to respond with yet another increase in interest rates from their already-high levels. While job growth is solid, it is down from peak levels, and as long as inflation continues its moderating trend, that should keep the Fed on the sidelines.
“The reality is that the labor market is strong, and that’s a big part of the reason the economy has been so resilient,” says AllianceBernstein chief economist Eric Winograd.
After the June jobs report showed solid increases, economists expect another round of similar gains. Nonfarm payroll employment is expected to increase by 200,000, according to FactSet’s consensus estimates. This follows an increase of 209,000 in June, and it would be down substantially from the 339,000 increase seen in May.
“While the labor market has been strong, there is some evidence that it is gradually starting to decelerate,” Winograd says. “I don’t want to say ‘weakened’ because it isn’t weakening. It is getting strong at a slower pace.”
The monthly jobs report is also notoriously volatile, and consensus forecasts are often off by a wide margin. Winograd notes that going back to early 2022, economists have tended to underestimate the pace of job growth: “Forecasters have been too low in14 out of the last 15 months.”
Economists predict the unemployment rate will remain at 3.6%, in line with levels seen since early 2022. Kevin Nicholson, a chief investment officer at RiverFront Investment Group, points to the rate at which employers are filling in vacancies as a factor keeping the unemployment rate steady. “We’re replacing workers at the same level as we are adding more groups, in the sense that you have retirees that roll off payrolls and you have new workers that are added to the payrolls,” he says.
From CNBC:
International buyers are pulling back from the U.S. housing market, as high mortgage rates, soaring home prices, a meager supply of homes for sale and a strong dollar all make the purchases much less financially attractive.
From April of last year to this March, international buyers bought roughly 84,600 homes; that’s the lowest number since the National Association of Realtors began tracking such purchases in 2009 and a 14% drop from the year before.
And while overseas buyers bought fewer homes, they paid more for them. The median price of homes they purchased was $396,400, the highest the Realtors ever recorded.
China, Mexico, Canada, India and Colombia were the top five countries of origin for international buyers of existing homes by number of houses, not dollar volume. The survey does not count new construction, where international buyers are also active.
Chinese buyers had the highest average purchase price, at $1.23 million, likely because a third of them bought in California, where home prices are highest. In total, 15% of foreign buyers bought homes worth more than $1 million.
“Home purchases from Chinese buyers increased after China relaxed the world’s strictest pandemic lockdown policy, while buyers from India were helped by the country’s strong GDP growth,” said Lawrence Yun, NAR’s chief economist, in a press release. “A stronger Mexican peso against the U.S. dollar likely contributed to the rise in sales from Mexican buyers.”
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Foreign buyers continue to flock to the same places as they have in the past, namely Florida (23%), California (12%), Texas (12%), North Carolina (4%), Arizona (4%) and Illinois (4%). Chinese buyers in particular like California, as they often buy so that their children can attend local schools and universities.
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About 42% of foreign buyers used cash. As for why they are buying, half purchased the properties for use as a vacation home, rental property or both, up from 44% the previous year.
From MarketWatch:
Good news for homeowners in New Jersey — home-price growth in the Garden State in June was the highest in the nation, according to real-estate data company CoreLogic.
Despite having the highest property taxes in the nation, New Jersey ranked first as its homes rose in value by 6.9% in June year-over-year. Nationally, home prices grew 1.6% on the year in June, the CoreLogic Home Price Index said.
Several housing markets in the Northeast gave a strong performance in June, CoreLogic said. New Jersey was followed by New Hampshire and Vermont, which both saw home prices grow by 6.4%. CoreLogic expects home prices nationally to increase to 4.3% by June 2024.
Home prices fell the most in June 2023 as compared to June 2022 in the West, led by Idaho where values fell by 8%. Washington and Montana followed, with home prices falling 5.8% and 5.7% respectively. Homes in California saw their values fall by 2.2% from June.
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The U.S. housing market is currently facing a supply-and-demand crisis. Home buyers across the U.S. are struggling with a major lack of home listings, as homeowners find few reasons to sell their houses. But demand continues to hold strong, despite the 30-year mortgage rate hovering at 7%.
“While the continued imbalance between buyers and sellers continues to pressure home prices, June’s annual bump in price growth echoes economic resiliency, a thriving U.S. job market and strong consumer spending,” Selma Hepp, chief economist for CoreLogic, said in a statement.
From NJ Business:
Residential housing data released this week from New Jersey Realtors, the state trade association representing more than 61,000 Realtors, continues to point to a slower-than-usual summer market, with low inventory and higher borrowing costs restricting some market activity.
The single-family home median sales price for June was $530,000, which is $20,000 more than it was in June 2022, representing a 3.9% increase. New listings for this category were down 33.8% for the month, with just 7,167 new single-family homes listed. Closed sales were down a similar 21.1% over last year, with pending sales down 15%. The percent of list price received remains well over 100%, but reduced to 103.8% over last June’s 105.1%. There were just 12,975 single-family homes for sale in June, a 35% decrease over last year.
Mortgage rates ticked up slightly to an average of 6.81% for a 30-year fixed-rate mortgage as of July 27, and remain elevated over the rates from the same time last year.
The numbers for townhomes and condos have followed a similar pattern. Closed sales for the townhouse/condo market were down 22.9%, to just 1,993 recorded for the month. The median sales price rose to $370,000, a 2.8% increase over June 2022.
From the National Association of Realtors:
Contract signings picked up the pace last month, and home buyers are increasingly facing multiple offer situations. NAR releases its housing forecast for the remainder of the year and 2024.
Pending home sales rose slightly in June, and the latest indicators are showing a housing market on the mend. Median existing-home sales prices in June soared to their second highest on record in the last two decades, and more buyers are facing multiple offer situations once again, the latest reports from the National Association of REALTORS® shows. NAR’s Pending Home Sales Index—a forward-looking indicator of home sales based on contract signings—rose 0.3% in June, the first increase in four months.
“The recovery has not taken place, but the housing recession is over,” says Lawrence Yun, NAR’s chief economist. “The presence of multiple offers implies that housing demand is not being satisfied due to a lack of supply. Homebuilders are ramping up production and hiring workers.”
Housing inventories remain at historical lows, down 13.6% from even last year’s low levels. “There are simply not enough homes for sale,” Yun said in a recent report. Seventy-six percent of existing homes sold in June were on the market for less than a month, NAR’s data shows.
Home buyers are faced with limited choices, higher home prices and higher mortgage rates. But they may find some relief soon: Mortgage rate increases may be mostly over, and that would bode well for home-buying, Yun says.
“With consumer price inflation calming close to the Federal Reserve’s desired conditions, mortgage rates look to have topped out,” Yun says. “Given the ongoing job additions, any meaningful decline in mortgage rates could lead to a rush of buyers later in the year and into the next.”
NAR forecasts that the 30-year fixed-rate mortgage could reach 6.4% by the end of the year, followed by 6% in 2024. Over recent weeks, mortgage rates have been nearing 7%, far from their ultra-low 2% or 3% averages just over a year ago.
From Reuters:
U.S. Federal Reserve Chair Jerome Powell said on Wednesday the central bank’s staff no longer forecasts a U.S. recession, and “we do have a shot” for inflation to return to target without high levels of job losses.
Powell told a news conference after the Fed’s latest interest-rate hike that there was “a lot left to go to” see such a soft landing.
“So the staff now has a noticeable slowdown in growth starting later this year in the forecast, but given the resilience of the economy recently, they are no longer forecasting a recession,” he said.
Fed staff last November introduced the notion that a recession might be “almost as likely” as their baseline outlook at the time for below-trend growth, minutes of Fed meetings show. In March, on the heels of the banking sector upheaval that had just been triggered by the collapse of Silicon Valley Bank earlier that month, they shifted to outright forecasting “a mild recession” later this year.
The shift by staff to a less pessimistic baseline outcome for the economy dovetails with outlook upgrades by a number of private-sector economists in recent weeks who have done the same in acknowledgment of the economy’s resilience in the face of Fed 5.25 percentage points of rate increases since March 2022.
