Median Prices Rise HPSI Drops

Median Home Prices Rose in July

According to the Housing Recovery Index put out by Realtor.com, listing price growth increased $27,000 (8.5%) Y-o-Y to $349,000 in July – a new high in median U.S. home prices. Danielle Hale, chief economist at Realtor.com notes that, “The U.S. housing market performance is closely mirroring COVID’s path, which is providing clues into what we can expect for various housing markets in the months to come. After being particularly hard hit in March and April, new coronavirus cases remain stable in the Northeast and we’re seeing buyers return to the market in force. If this same trend follows in the South and Midwest . . . we could see a flurry of activity well into the fall.” Experts pin this rise in median home price on low inventory and pent-up demand. Nationwide inventory continued to shrink Y-o-Y in July – dropping 34.8%, down from June’s 26.5% drop in inventory.  ~ Housing Wire

Fannie Mae’s HPSI Dropped in July

Fannie Mae’s Home Purchase Sentiment Index® (HPSI) dropped 2.3 points to 74.2 in July. This is the first drop after two previous months of advances. However, the HPSI is still down 19.5 points Y-o-Y. According to Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, this slight decline in the HPSI can be attributed to the rise of coronavirus cases across the U.S. He states, “Following a partial recovery of the HPSI in the previous two months, consumer sentiment toward housing took a slight step back in July amid a rise in coronavirus infections across many parts of the country, including the south and southwest. Supply constraints appear to be applying upward pressure to consumers’ home price expectations, which in turn has contributed to both a sharp reversal in optimism about whether it is a good time to buy a home and further improvement in home-selling sentiment.” ~ Fannie Mae

International Home Purchases are Down Year Over Year

The number of foreign buyers purchasing homes in the U.S. is down for a second year in a row. From April 2019 – March 2020, foreign buyers purchased $74 billion of U.S. existing home sales, which is a 5% decrease from the previous year. Purchases made by non-U.S. citizens totaled 4% of the $1.7 trillion of existing-home sales in the U.S. Some of this drop can be attributed to trade tensions between the U.S. and China over the past year – resulting in weaker global economic growth and weaker currencies in relation to the U.S. Dollar. These weaker currencies combined with low U.S. housing inventory and increased median home price also constrained international home buyers. Over the past year, Florida remained at the top of the foreign buyer’s market - attracting 22% of foreign buyers – followed by California (15%), Texas (9%) and New York (5%). ~ National Association of Realtors

Second Home Offices?

People are doing whatever it takes to adapt and stay productive during this unprecedented time of the coronavirus. One way some residents of large cities are doing this is by buying or renting a second home to turn into an office. Instead of commuting to his office in Brooklyn or setting up shop in his living room, Felipe Vasconcelos, a cosmetics industry entrepreneur in New York, simply takes the elevator down 6 floors to his newly-acquired 450-square-foot studio apartment turned office. “Trying to work from home . . . the place where I relax, it was very difficult to concentrate – but also I was limited by space” said Vasconcelos. “I’ve seen an increase in productivity” he said since acquiring his second property. Now, not only does Felipe have space for his home office, he has space for a small home gym as well. Still, Felipe says the biggest benefit comes at the end of the day. “I think that the big difference for me is, yes, when I come home I can absolutely relax.” ~ Fox News