SC housing sales show 2014 increase; prices up locally for year

25 Jan 2015 | Author: | No comments yet »

Existing home sales rebound, but affordability problems linger (+video).

WASHINGTON (MarketWatch) — Existing home sales dipped in 2014, the first decline since 2010, despite several factors that should have helped the market, including low mortgage rates.The National Association of Realtors said Friday that sales of existing homes rose 2.4 percent last month to a seasonally adjusted annual rate of 5.04 million.

Mounting student debt, higher rents and tight credit conditions continue to make it tough for first-time borrowers to save enough money for a down payment and qualify for a mortgage.A three-year winning streak for sales of previously owned homes in the U.S. ended in 2014 as some investors stepped out of the market and first-time buyers failed to fill the void. But the nature of this housing recovery, and lingering constraints on affordability, are prompting fundamental changes in where and how Americans choose to live.

That was slightly below economists’ expectations for a pace of 5.06 million units. “The still-tight mortgage credit conditions and more challenging first-time home buyer affordability that were revealed by the failure of home sales to continue recovering last year remain serious concerns as we head into 2015,” said Ted Wieseman, an economist at Morgan Stanley in New York. The share of American homebuyers making their first purchase dropped in 2014 to its lowest level in almost three decades, according to the Realtors group. First-time buyers made up 29 percent of transactions in December as well as for the year as a whole, well below the level needed to lift growth in the housing market. The improving labor market and low mortgage rates will support the housing recovery.” Stocks fell, trimming the first weekly gain of 2015, as weaker-than-forecast results at companies from United Parcel Service Inc. to Kimberly-Clark Corp. offset confidence that central banks will support global growth. The improvement came despite an 11.1 percent dip in inventory to a 4.4 months’ supply of homes available for sale (about six months is considered normal).

At December’s sales pace, it would take around four months to clear all available houses from the market, down from about five months in November and the quickest since January 2013. The report added to a spate of positive data suggesting that 2015 could finally be the year that the market, which has been sluggish since 2012, turns a corner. However, a recent decline in mortgage rates, an easing of lending standards and the resurgent health of the American economy over the last few months have generated optimism that sales could strengthen this year. Yun said the improving economy and policy changes intended to make mortgages more accessible to first-time borrowers could entice buyers to enter the market in 2015. Housing starts, a measure of the number of new homes builders break ground on, also saw big gains in December, driven by a 7.2 percent surge in starts for single family homes.

The announcement comes one month after President Obama said the United States would work to restore normal diplomatic relations for the first time in more than 50 years with the Communist-run island. December’s jump was driven by gains in most of the index’s components, suggesting the short-term outlook is getting brighter and the economy is continuing to build momentum, the Conference Board said. A separate survey from the group showed they made up 33 percent for all of 2014, the fewest since 1987. “First-time buyers are still missing in action,” Lawrence Yun, NAR chief economist, said at a news conference today as the figures were released. A spokeswoman for American Express said the card provider is evaluating the new regulations released by Treasury’s Office of Foreign Assets Control. Factory employment increased for a 19th consecutive month, but new orders were the lowest in a year. “The slowdown is being led by a weakening inflow of new orders, but the good news is that demand remained strong enough to drive yet another month of robust job creation at factories,” said Chris Williamson, chief economist at Markit in London.

Visa did not immediately respond to a request for comment. ● UPS spent heavily to avoid 2013’s debacle over the holidays, when a crush of last-minute shipping and bad weather led millions of late deliveries. Blomquist says. “Denver is a place that has become unaffordable very quickly, but there have been some surprising pockets of growth, like Columbus, Ohio, [where home prices rose 5.4 percent last month] and Duval County,” the urban center of Jacksonville, Fla.

The Conference Board’s index of leading indicators, a gauge of the outlook for the next three to six months, increased 0.5 percent in December, after a revised 0.4 percent gain in November, the New York-based group said. The department’s Bureau of Labor Statistics said public-sector workers have the highest union membership rate at nearly 36 percent, more than five times higher than membership of private-sector workers at less than 7 percent. Earnings were higher for union members, at $970 a week vs. $763 a week for non-union members. ● Box’s shares soared 66 percent in its stock market debut. And they need to save a lot, because borrowing in the current climate is tight. “I’ve been concerned about the expansion of credit to people who need it,” she notes.

A strong domestic market is buffering the U.S. against global weakness as Federal Reserve policy makers prepare to meet next week to discuss if and when to raise interest rates. The start on the New York Stock Exchange came after Box sold 12.5 million shares for $14 apiece in a delayed intial public offering that raised $175 million. Lingering memories of the housing crash, brought about by credit being too freely available, has led to a credit market that’s “overly tight and very cautious about any new measures.” There is some movement in that direction: Last week, the Obama administration announced that the Federal Housing Administration will lower premiums on mortgage insurance. The labor market is coming off its best year since 1999, with almost 3 million jobs added and an unemployment rate of 5.6 percent, a more than six-year low. The Department of Transportation order reduced the penalty as originally proposed by about $700,000 after Exxon challenged some claims that it didn’t do enough to prevent the accident.

The Transportation Department ordered Bridger Pipeline of Casper, Wyo., to make major upgrades to its line. ● Starbucks chief executive Howard Schultz received a 24 percent increase in his compensation package for 2014. A regulatory filing with the Securities and Exchange Commission showed that Schultz’s base salary stayed steady at $1.5 million for the company’s fiscal year ended in September. But the value of his stock awards increased 5 percent, to nearly $6.3 million, and a cash payment based on performance increased 30 percent, to $2.9 million.

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