Morning Briefing: Pending homes sales slip on tight supply

by Steve Randall28 Feb 2017
Pending homes sales slip on tight supply
Insufficient supply of homes has led to pending home sales slipping to their lowest level in a year.

The National Association of Realtors says its Pending Home Sales Index slipped 2.8 per cent in January to 106.4, the lowest since January 2016, although it is up 0.4 per cent year-over-year.

The Midwest and West were the drags on the index as tight supply and affordability remained key issues.

"The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay," said NAR chief economist Lawrence Yun.

"Buyer traffic is easily outpacing seller traffic in several metro areas and is why homes are selling at a much faster rate than a year ago. Most notably in the West, it's not uncommon to see a home come off the market within a month," added Yun.

The PHSI dropped 9.8 per cent in the West and 5 per cent in the Midwest; while increasing 2.3 per cent in the Northeast and 0.4 per cent in the South.

Home improvement spending set to rise
More than half of American homeowners are planning to spend on home improvements this year.

Outdoor living space is the top priority among the 59 per cent of respondents to a poll by online lender LightStream, part of SunTrust Banks Inc. These improvements include decks, patios and landscape renovations.

Home repairs (32 per cent), bathroom updates (28 per cent) and kitchen remodels (24 per cent) are also on the agenda.

However, it seems that homeowners could use some guidance on their choice of credit to finance home improvements.

"This year's survey shows that many homeowners plan to pay for renovations with credit cards," said Todd Nelson, LightStream business development officer. "It's important that consumers explore alternatives, such as a home improvement loan or home equity line of credit. These options often offer lower interest rates, and allow homeowners to better manage their overall costs and payments."

Forty-two per cent of respondents plan to spend $5,000 or more on the improvements while 23 per cent are expecting costs of at least $10,000.

Hilfiger home adds $10 million in just 4 years
The Florida home of fashion designer Tommy Hilfiger and his wife Dee has been listed for $10 million more than the couple paid for it just 4 years ago.

The Hilfiger’s estate at 605 Ocean Blvd, Golden Beach was bought for $17.25 million but has been remodeled by British interior designer Martyn Lawrence Bullard and is listed on Zillow at $27.5 million.

The 14,075 square foot property has 7 bedrooms and 8 bathrooms, a chef’s gourmet kitchen and 100 feet of water frontage.

The estimated cost of a mortgage on the home is $108,000 a month.
 

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