The Real Estate News Brief: New Home Sales Up, Existing Home Sales Down, Mortgage Rates Lookin’ Good

In this Real Estate News Brief for the week ending April 24th, 2021... new home sales blast off, existing home sales stall, and mortgage rates are doing what we like them to do! Economic News We begin with a slow week for economic news. There were no reports on the MarketWatch calendar from Monday through Wednesday. On Thursday, the weekly unemployment report showed there were fewer first-time filers. Those initial state claims were down about 12,000, to 574,000, while continuing claims fell by 34,000 to a seasonally adjusted 3.68 million. The total number of claims for eight state and federal programs is still quite high, at 17.4 million. New home sales blasted off this last week to their fastest pace since 2006. The Census Bureau reports that sales rose 20.7% month-over-month, to a seasonally-adjusted rate of 1.021 million homes. Inventory remained about the same, although it’s down 7% from where it was a year ago. Existing home sales didn’t do as well because of extremely low inventory. The National Association of Realtors says they fell 3.7% in March to a seasonally-adjusted rate of 6.01 million. That’s the slowest rate of existing home sales since last August, and it’s down 12% from a year ago. Mortgage Rates Mortgage rates dipped back below 3% this last week. Freddie Mac says the average 30-year fixed-rate mortgage dropped 7 basis points to 2.97%. The 15-year was down 6 basis points to 2.29%. Freddie Mac’s chief economist, Sam Khater says: The drop in mortgage rates is good news for homeowners who are still looking to take advantage of the very low-rate environment.” But they aren’t expected to remain there for long. Economists expect rates to climb a bit higher for the rest of the year. In other news making headlines... Five New Real Estate Records in March The real estate market hit five new records in March. The World Property Journal made a list. The first was a record high for the national median home-sale price. It was up to $353,000 in March of this year. That’s after rising 17% year-over-year. The inventory of homes on the market dropped to a record low. It’s down 29% year-over-year, and the months of supply was just a little over “one.” The days it took for a typical home to sell was just 25 days, which is a record low and about 19 days lower than it was a year before. The percent of homes that sold above the asking price hit a new high of 42%. And the average sale-to-list ratio also hit a new high. That’s a measure for how close the sale price is to the asking price and for the first time ever, it flew past 100%. General Motors’ Simple Remote-Work Plan As companies address a complex issue involving remote workers and whether to bring them back to the office, GM has offered a very simple plan. It is telling employees to (quote) “Work appropriately.” That’s what CEO Mary Barra and other executives are telling GM’s 155,000 global workforce. They are describing it as a flexible, evolving policy that will be different for each employee depending on the project and the timeline. For factory workers who get paid by the hour, that might mean being trained remotely and returning to the assembly line after that. For other employees, it could be a full-time remote position or something that’s more of a hybrid combination of remote and in-office hours. GM’s global talent director says: “It is not about a policy or a one-size-fits-all approach but truly an evolution of our culture for everyone.” Short-Term Rental Reservations Are Skyrocketing As vaccination rates increase, reservations are skyrocketing for short-term vacation rentals. The New York Times reports that 90% of vacation homes listed on VRBO for Cape Cod, Massachusetts, and the Jersey Shore were booked by the end of March. But the supply is tight since many second-home buyers are choosing to live in the homes instead of renting them out. That combination of factors is driving rates higher. Airbnb rates are expected to average around $220 a night this year compared to $194 last year and $185 in 2019. Another trend that’s growing is that guests are booking for longer stays. Instead of a few days for a quick getaway, hosts say more and more people are booking for weeks at a time. One person told the New York Times: “We’re seeing an emerging trend of ‘slow travel,’ with travelers wanting to spend more time immersing themselves in a destination than they did pre-pandemic.” Check for links on the podcast player page for this episode at www.NewsForInvestors.com Thanks for listening. I’m Kathy Fettke. Click here to join the network for free Links: 1 - https://www.marketwatch.com/story/u-s-jobless-claims-keep-falling-11619095897?mod=economic-report 2 - https://www.marketwatch.com/story/new-home-sales-soar-to-highest-level-since-2006-2021-04-23 3 - https://www.marketwatch.com/story/existing-home-sales-slip-as-property-prices-see-record-growth-11619102154?mod=economic-report 4 - http://www.freddiemac.com/pmms/ 5 - https://www.worldpropertyjournal.com/real-estate-news/united-states/seattle/real-estate-news-redfin-2021-housing-reports-record-home-prices-in-march-2021-cov-19-impact-on-home-sales-taylor-marr-12477.php 6 - https://www.cnbc.com/2021/04/20/gms-simple-message-to-employees-about-return-to-work-work-appropriately.html 7 - https://magazine.realtor/daily-news/2021/04/21/summer-vacation-rentals-are-already-skyrocketing