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- Pending home sales climbed 8.3% in December
Pending home sales climbed 8.3% in December
Plus: Composition of homeownership by age
It's Monday. Let's do this. Today's newsletter is 522 words, a 2-minute read.
Disclaimer: Average mortgage rates as of Jan 26, 2024. © MND's Daily Rate Index.
1. Pending home sales climbed 8.3% in December
A gauge of pending existing-home sales rebounded sharply in December to a five-month high, suggesting the recent drop in mortgage rates is helping to stabilize the resale market.
The National Association of Realtors’ index of contract signings increased 8.3% to 77.3 after holding at a record low a month earlier, according to data released last Friday.
“The housing market is off to a good start this year, as consumers benefit from falling mortgage rates and stable home prices,” Lawrence Yun, NAR’s chief economist, said in a statement. “Job additions and income growth will further help with housing affordability, but increased supply will be essential to satisfying all potential demand.”
The pending home sales report is a leading indicator of existing-home sales given houses typically go under contract a month or two before they’re sold.
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Did you know that the number of women who take on mortgages solo has grown dramatically to now make up almost a fourth of home purchases? Despite their rise, this demographic feels uneducated about loans and dissatisfied with the lending process.
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2. Catch up quick
📉 Mortgage rates to decline to 5.5% in 2024, survey shows. (Bloomberg)
💸 Housing is now unaffordable for a record half of all U.S. renters. (Harvard)
🧑⚖️ loanDepot faces class actions over cybersecurity breach. (NMP)
3. Charted: Composition of homeownership by age
While baby boomers—defined as Americans between the ages of 58 and 76 in 2023—comprise just over 20% of the U.S. population, they account for nearly 38% of homeowners nationwide.
Notably, baby boomers dominate the housing market in many New England states, such as New Hampshire (42.5%), Vermont (42.0%), and Maine (41.7%). But Delaware leads all states with 42.7% of homeowners being a part of the baby boomer generation.
On the other hand, fewer baby boomer homeowners can be found in Midwestern states including North Dakota (35.5%), Nebraska (35.6%), Minnesota (35.7%), and Indiana (36.0%).
4. Typical home seller profit was $121,000 in 2023
ATTOM's year-end 2023 home sales report found that home sellers made an average profit of $121,000 on their sales, resulting in a 56.5% return on investment.
Although this represents a substantial profit, it marks the first decline in both gross profits and profit margins since 2011.
The gross profit on median-priced single-family home sales fell from $122,600 in 2022, while the profit margin decreased to 59.8% from the previous year. These declines were influenced by the slowest annual growth in the national median home price in over a decade.
👋 See you on Wednesday!
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