According to the National Association of Realtors, existing home sales went up 2.6 percent in June, meaning the nation is back to the annual rate of 5 million sales that was reached last October. Existing sales included single-family homes, town homes, condos and co-ops in this report.
Home sales are still lower than what they were at this time last year, but analysts predict increasing sales in the months ahead. We’re only halfway into the year, and we’ll have to wait for the other half to finish to evaluate progress.
While inventories are high if you’re looking at the nation as a whole, Hawaii inventory is limited. It’s no surprise, considering how valuable it is, whether the buyer is planning to live here permanently or turn it into a vacation rental. Hawaii real estate isn’t the only market where inventory is low. Inventory in the West is limited as well, which is likely to be due in part to strong population growth. The solution is new housing, and that’s why home builder’s confidence is so high.
Analysts have pointed out that while job growth is healthy, wage growth is flat, making potential buyers balk rather than take advantage of low interest rates. Mortgage insurance rates are also high, and tend to deter buyers who have good credit, but not a lot saved up for a down payment. NAR president Steve Brown has called for the reduction of high annual mortgage insurance premiums from the Federal Housing Administration in order to help solve the issue. The median price of an existing home was $223,300 in June, which is up 4.3 percent since the same time last year. It’s also worth noting that 11 percent of existing-home sales were foreclosures and short sales, compared to 15 percent in the same month last year.
Hopefully, analysts are accurate in their predictions of future growth. We’ll have to keep an eye on it as the rest of the year unfolds. Mahalo for reading this week!
mauiluxuryrealestateteam.com – By Robert J. Cartwright, Principal Broker
