Morning Briefing: New home sales lower, existing sales rebound

by Steve Randall27 Oct 2015
New home sales lower, existing sales rebound
New home sales dropped 11.5 per cent in September to a seasonally-adjusted annual rate of 468,000 units according to new data from the US Census Bureau and HUD. However the National Association of Realtors reports that sales of existing homes rebounded in the month compared to August with a 4.7 per cent rise to a seasonally adjusted annual rate of 5.55 million.

The weakness in the new homes sector is not a major concern for the National Association Home Builders which says that economic data may have accounted for some consumer caution: “It is not surprising to see sales pull back in September following a strong August reading, especially after a few months of weak job creation,” said NAHB Chief Economist David Crowe. “However, new-home sales year-to-date are up 17.6 per cent compared to the same period of 2014, and we expect the market to continue improving at a gradual but steady pace for the rest of year.”

For the existing homes market affordability has recovered slightly in recent months and the NAR’s chief economist Lawrence Yar commented that the slight moderation in prices has helped the market: "While current price growth around 6 percent is still roughly double the pace of wages, affordability has slightly improved since the spring and is helping to keep demand at a strong and sustained pace." The national median sales price across all home types was $221,900 in September.
Tech sector workers see home prices outpace neighbors
The average home price of a Silicon Valley worker is outpacing that of most American homes according to new analysis from Zillow. It found that the average Apple worker now lives in a home that is more than five times more valuable than the average US home. The gap has widened in the last five years. In 2010, the average Apple worker's home was worth three times as much as a typical U.S. home.

A typical worker living near Apple’s HQ at Cupertino, CA lives in a $1.14 million home, 27 per cent higher than the median cost of a San Jose home and 50 per cent above the San Francisco median. Workers at Google and Facebook headquarters – in Palo Alto and Menlo Park, Calif., respectively – lived in even more valuable homes. The median home value among Facebook workers is $1.25 million, and the median home value among Google workers is $1.28 million.

"This analysis highlights the widening wealth gap between tech company employees and other U.S. workers – a gap that is putting increasing pressure on housing markets where tech companies are booming," said Zillow Chief Economist Dr. Svenja Gudell.
Ed Sheeran song pays pal’s mortgage
A song co-written by Ed Sheeran has helped a friend with her mortgage payments. ET Canada says that Amy Wadge was struggling with repayments just before Sheeran released his album X and asked the singer if she could contribute a song for the album to gain some royalty payments. The pair then wrote Thinking Out Loud which became a smash single for Sheeran, going multi-platinum in Canada and selling millions worldwide; Wadge will no longer have a problem with mortgage payments!


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