Lennar Homes: Sales of homes soar as purchasers Now

Lennar Homes: Sales of homes soar as purchasers Now

• Sales of homes soar as purchasers accept higher mortgage rates

Lennar Homes

• As buyers came to terms with the new normal of higher mortgage rates in February, sales of previously occupied US homes increased.
• Existing home sales increased 9.5% in February over January to reach an annualized rate of 4.38 million, according to data released on Thursday by the National Association of Realtors (NAR).
• That represented the biggest monthly increase in a year and was nearly 6% higher than a year ago.
• Additionally, the median house price rose by nearly 6% to $384,500, an all-time high for the month of February and the eighth consecutive month of increases in value over the previous year.
• Even so, sales decreased from February 2023, indicating some market tightness.

Lennar Homes

1. Positively, at the end of February, there were 1.075 million houses for sale, 10% more than a year earlier.
2. For those who are looking to buy a home, the increase in inventory is encouraging because there have been few options available for a while.
3. But with entry-level homes still in short supply, the majority of activity observed this month stayed at the upper end.
4. In a conference call on Thursday, Lawrence Yun, the chief economist at NAR, hinted to reporters that perhaps the inventory’s absolute low point was over.
5. “More inventory is entering the market, and as a result, there may be a significant contributing factor to the rise in home sales: more options for buyers.”

Lennar Homes

• There are already several offers here.
• Even though the price of homes continued to rise, more people bought last month; in some areas, multiple offers were even renewed.
• Every one of the four regions saw price increases from the previous year, according to the NAR.
• In the West, the median price of an existing home increased by 9% annually to $593,000, a nearly 17% increase from a month ago.
• In the South, sales rose by almost 10% in January compared to the same month last year, with a 4% increase in the median price to $354,200.
• The median price of a home sold in the Midwest was $277,600, and sales increased by more than 8% from the previous month.
• In the Northeast, existing-home sales remained flat in January but decreased by nearly 8% from the previous year.
• Out of all the regions, the average price of homes sold was $420,600, an increase of 11.5% from the previous year.
• The Northeast is somewhat unique in that there are numerous large offers occurring as a result of low inventory, and this is the main reason why sales did not increase, according to Yun.
• The strongest price increases are, in fact, occurring in the Northeast.
• As a result, [demand] may suffer from the low inventory level.
• Buyers of homes are irritated by affordability
  Last month, as the competition heated up, first-time homebuyers were once more forced to the sidelines.
• In February, 33 percent of sales of existing homes were made using only cash.

Lennar Homes

1. Cash purchases from individual investors or second-home buyers accounted for 21 percent of all home sales.
2. In contrast, only 26% of sales were made by first-time customers.
3. The NAR claims that elevated rates and rising home prices were some of the factors that reduced demand from first-time buyers.
4. A further obstacle was the rising percentage of repeat buyers making multiple offers; in February, 20% of homes sold for more than the asking price.
5. In addition to growing costs, there were fewer options available for entry-level purchasers.
6. Because so many homeowners are still unwilling to give up their absurdly low rates, starter homes are still sadly hard to come by in the market.
7. For example, in February of this year, sales of homes under $100,000 were 11% lower than they were the previous year. Conversely, yearly declines in homes between $100,000 and $250,000 were observed.
8. In the meantime, there was a 3% increase in the sales of homes between $250,000 and $500,000 and a 23% increase in homes between $750,000 and $1 million.
9. According to NAR, the most activity was observed in homes over $1 million, where demand increased 37% annually.
10. The increase in prices has pleased homeowners, but purchasers are dissatisfied with affordability.
11. In addition to the lack of inventory, having to deal with multiple offer situations makes it much more difficult,” Yun said.
12. Don’t think about going back to 3% rates.
13. Despite the fact that mortgage rates were almost 7% last month, sales increased.
14. According to Freddie Mac, the average rate on a 30-year fixed mortgage was 6.63% at the beginning of February and increased to 6.94% by the end of the same month.
15. As of March 14, rates have decreased by almost a quarter of a percentage point, and they are currently 6.87%.
    Mortgage rates are now within the new normal, according to Yun.
16. [Consumers are aware that] “mortgage rates will never again drop to 3%.”
17. It won’t drop to 4%, and it might be challenging to drop to 5%.