MReport August 2018

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50 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Examining Military and Veteran Homeownership Active-duty military homebuyers tend to be younger and purchase larger homes than nonmilitary homebuyers. T he National Association of REALTORS Research Group has released a new report entitled "Veterans & Active Military Home Buyers Profile." To give a little perspective, active-duty military make up 2 percent of all American homebuyers. Veterans make up 17 percent, and 81 percent are non- military. The average active-duty military homebuyer is quite a bit younger than the average nonmilitary homebuyer—34 years old for active military versus 42 years old for nonmilitary. Active-duty military homebuyers are also more likely to be married, have multiple children living in the household, and pur- chase a larger home than nonmili- tary homebuyers. Fully half of all active-duty homebuyers are first-time buyers, and 68 percent are first-time sellers. For veterans, 19 percent are first- time buyers and 26 percent are first- time sellers. Among nonmilitary, 35 percent are first-time buyers and 39 percent are first-time sellers. Active-duty military home- buyers do have a lower median income than nonmilitary buyers at $84,000. However, they do have other advantages—both stable job security and no-down payment fi- nancing options. A full 56 percent of active-duty homebuyers put no money down when purchasing a home, as do 41 percent of veterans. For comparison's sake, only 7 per- cent of nonmilitary buyers are able to make use of no-down payment financing options. Among active-duty military who financed their home, 77 percent used a VA loan and 15 percent used a conventional loan. For veterans, 58 percent used a VA loan and 33 percent used a conventional loan. Among active-duty military asked why they planned to move in the future, 82 percent said they would move in the future because of their job. Thirty-three percent said they would move in order to flip their house, and 11 percent cited finding a better neighborhood as a reason to move. Existing Home Sales vs. Housing Supply Existing home sales dipped this spring, and the culprit is "the utter lack of available listings on the market," according to NAR's chief economist. T he sale of existing homes declined 2.5 percent in April after seeing a brief upward movement in the previous two months, accord- ing to existing-home sales data released by the National Associa- tion of Realtors (NAR). Total existing-home sales, which are completed transactions for single-family homes, townhomes, condominiums, and co-ops, decreased to a seasonally adjusted annual rate of 5.46 million in April, down from 5.6 million in March, the report indicated. On a year-over-year basis, home sales fell for two straight months and were 1.4 percent below a year ago in April, according to NAR. Additionally, this slump in sales was felt across all the four U.S. regions covered by NAR, thanks to the "staggeringly low inventory levels," according to Lawrence Yun, Chief Economist, NAR. "The root cause of the under- performing sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buy- ing a home," he said. The report noted that though total housing inventory at the end of April increased 9.8 percent to 1.80 million homes available for sale, it was still 6.3 percent lower than the level of 1.92 million re- corded a year ago and had fallen for 35 consecutive months. Unsold inventory was at a four-month supply at the current pace of sales, compared to 4.2 months a year ago during the same period. "What is available for sale is going under contract at a rapid pace," Yun said. "Since NAR be- gan tracking this data in May 2011, the median days a listing was on the market was at an all-time low in April, and the share of homes sold in less than a month was at an all-time high." While the median price for existing homes this April rose 5.3 percent to $257,900 from $245,000 in April 2017, the report indicated that properties stayed on the market for an average of 26 days in April. This was lower than 30 days recorded in February this year and 29 days during the same period a year ago. The report said that 57 percent of homes sold in April were on the market for less than a month. "With mortgage rates and home prices continuing to climb, an increase in housing supply is absolutely crucial to keeping af- fordability conditions from further deterioration," Yun said. "The cur- rent pace of price appreciation far above incomes is not sustainable in the long run." "The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home." — Lawrence Yun, Chief Economist, NAR

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