Today we discussed about existing homes sales and the internal quality of the data.
Existing home sales hit 5.53 million today, up from a downward revised 5.43 million print in April .
Report here from the NAR:
The quality of the report is better, as I predicted in my 2016 Housing Prediction article.
For 2016, we will see more mortgage buyers this year and less cash buyers. Cash buyers in today’s report is down to 22% of sales. For many years this has been above 30% of the existing home market. In a normal housing cycle it would be roughly 10% of total existing home sales. So the demand from cash buyers has been very strong in this cycle.
Mortgage demand is growing year over year!
However, we are only back to 1998 levels on mortgage demand, with mortgages rates 4% plus lower than then.
As always, I try to stress, demographic economics matter for housing and in this cycle we were very young and very old. Ages 17-29 and ages 49-65 were massive in this cycle. This is one factor on why housing demand hasn’t met a lot of the lofty expectations set early on in this economic cycle in terms of sales.
From Calculated Risk:
We also touched about the massive housing inflation we have seen in recent years. Depending on which data site you follow, real home prices are still 10%-20% below the peak of the housing bubble with no relief coming in 2016.
The median existing-home price for all housing types in May was $239,700, up 4.7% from May 2015 ($228,900).
From Doug Short:
Even with this price inflation, I don’t believe the U.S. housing market is in a bubble. I go into more details about that here
Starting at 4:56 into the Podcast with Kathleen Hays and Pimm Fox
Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987.