Housing Market Looking Solid…For Now
by Jeff Pinkerton
It’s time to check in on the Kansas City housing market. The Kansas City Regional Association of Realtors (KCRAR) has released its figures for September, and the housing market continues to show signs of growth. The chart below shoes total homes sales for existing homes (in green) and new homes (in blue) since January 2012.
In both cases, home sales dipped between August and September, but this is a seasonal issue. Home sales peak during the summer months and retrench when school starts up, so year-over-year is the best way to measure progress. In both new and existing home sales, Kansas City is trending upward. Monthly new home sales increased only slightly between September 2012 (187) and September 2013 (190), but existing home sales increased 23 percent (from 1,895 to 2,335) over the same period.
Put another way, between January and September 2012, home sales totaled 20,385 (1,644 new and 18,741 existing). Thru September 2013, there were a total of 22,589 homes sold (1,907 new and 20,682 existing).
Sales prices have also increased during the year. Average monthly sales prices for new homes are up 11.7 percent and existing home prices are up 8.8 percent .
While it is good to see the housing market on solid footing, it will be interesting to see what happens in the months ahead. Mortgage rates, while still extremely low, are starting to creep up slightly over the past few months. The homeownership rate in the U.S. has been declining and now stands at 65.4 percent. This trend is especially strong in younger age groups.
So, while it is safe to say the housing market (both local and national) finally has its legs under it now, it may quickly be challenged by economic and demographic realities.