Latest housing market news for 2019. Home sales are up but can the national supply keep up with the demand from homebuyers?
Home sales increased by 2.5 percent in July, according to the latest national housing market report by RE/MAX. The jump was enough to end nine months of year-over-year inventory growth as the number of homes for sale in 2019 declined by 1.4 percent.
“July sales snapped back after a tepid June, as attractive low-interest rates appear to have brought more buyers into the mix,” observed RE/MAX CEO, Adam Contos. “The housing market has been a bit uneven since the early spring, with each encouraging month seemingly followed by one with lukewarm results. It’s possible the housing market has finally shaken some mud off its boots and can maintain its momentum for the back half of the year. If the broader macro environment hangs on, we could see a potentially strong finish to 2019.”
Median sales prices were $273,000 in the 53 metro areas surveyed for the report. That’s a 0.7 percent decrease from June and a 9.2 percent increase from July 2018. Median sales prices decreased year-over-year in Anchorage, AK (-3.2%), Trenton, NJ (-2.1%) and San Francisco (-2.0%). Several metro areas saw double-digit increases in median home sales prices percentages. The largest increases were in Wichita, KS (+16.7%), Cleveland (+12.9%) and Cincinnati (+11.7%).
Latest Housing Market News for 2019
In July, the housing market sped up in most of the country. Homes spent an average of 43 days before they were sold. It’s equivalent to the average days on market in June, and up two days from average days on market in July 2018.
Omaha, NE was the metro area where homes spent the fewest days on the market (21), which is no surprise since it was recently identified as one of America’s hottest ZIP codes. In Manchester, NH and Cincinnati, homes also spent just over 20 days on the market. Conversely, homes in Augusta, ME and Miami had homes listed for sale for more than 80 days, the longest number of days on the market of the metro areas surveyed.
But when homes are flying off the market, it means that the supply of homes available for sale is extremely low. Sure enough, the overall housing market inventory is down 2.2 percent from June 2019 and down 1.4 percent from July 2018. The number of months’ supply of housing inventory decreased to 2.7 compared to 2.9 in June 2019 and 3.3 in July 2018. According to the RE/MAX report, “A six months supply indicates a market balanced equally between buyers and sellers.” In July 2019, only Miami reported a months supply at or over six, 6.8 to be exact.
Housing Market Outlook for Fall 2019
Thanks to a stronger-than-expected first half of the year, secondary market leader Fannie Mae forecasts that full-year 2019 economic growth up slightly to 2.2 percent in August, thanks.
“Though the current expansion recently became the longest on record, reverberating trade tensions and general economic uncertainty continue to weigh on growth,” said Fannie Mae Senior Vice President and Chief Economist Doug Duncan. “The persistent trade tensions between the U.S. and China threaten to further reduce business investment, disrupt equity markets, degrade household wealth, and diminish consumer spending, the country’s primary economic engine of late. To help shield financial markets, buoy consumers, and perhaps nudge inflation slightly higher, we now expect the Fed will cut interest rates by 25 basis points two more times in 2019, up from our previous prediction of one.”
“Mortgage rates are approaching the lowest level in recent decades, and as they have moved lower more and more homeowners are finding [there is] incentive to refinance,” Duncan continued. “We estimate that 35 percent of outstanding mortgages are now ‘in the money,’ meaning borrowers may realize significant cost savings by refinancing; as such, we expect the share of refinance originations to grow through the remainder of the year.”
But Duncan says that while existing homeowners may be able to enjoy the benefits of lower interest rates, many wanna-be homeowners won’t be able to take advantage of low-interest rates because of the chronically limited housing market inventory in 2019.