Existing home sales set new monthly-gain record
Sales of existing homes bounced back at the end of 2015 following delays in some transactions due to Know Before You Owe. Sales were up 14.7 per cent to a seasonally adjusted rate of 5.46 million, the largest monthly increase ever recorded. The National Association of Realtors reports that the surge puts sales 7.7 per cent higher than a year ago. Median prices were up 7.6 per cent year-over-year.
Gains were recorded in all four major regions, led by the South and West. NAR chief economist Lawrence Yun noted that the warmer weather at the end of 2015 played a part in the gains, along with the spectre of higher interest rates pushing up mortgage costs.
However, the gains also continue the trend of growth in the housing market during 2015, which is not expected to be continue this year: "Although some growth is expected, the housing market will struggle in 2016 to replicate last year's 7 percent increase in sales," adds Yun. "In addition to insufficient supply levels, the overall pace of sales this year will be constricted by tepid economic expansion, rising mortgage rates and decreasing demand for buying in oil-producing metro areas."
First-time buyers made up 32 per cent of all existing home buyers; 3 percentage points higher than in December 2014 but still below historic averages.
Zillow predicts rents to flatten
Renters should get some relief from rising rents this year according to a forecast by Zillow. It expects rent to level out to 1.1 per cent by December 2016, putting the national median rent at $1,396 at year-end, just $15 higher than at the end of 2015. Nashville, Tennessee, San Francisco, Portland and Denver are forecast to see the sharpest slowing of rental appreciation although many major markets will still be unaffordable for average-income households.
"Hot markets are still going to be hot in 2016, but rents won't rise as quickly as they have been," said Zillow Chief Economist Dr. Svenja Gudell. "The slowdown in rental appreciation will provide some relief for renters who've been seeing their rents rise dramatically every single year for the past few years. However, the situation remains tough on the ground: rents are still rising and renters are struggling to keep up."
Illinois realtors report more balanced market
Home sales and prices gained in Illinois during December, marking the end of a year when the local housing market was more balanced that in 2014. Illinois Association of Realtors reported a 1 per cent increase in statewide sales year-over-year to 11,709 for the month; total sales for 2015 were up 5.9 per cent to 155,676. The median price reached $165,000 in the month, a rise of 7.1 per cent year-over-year; and the year-end median was up 8.1 per cent to $173,000.