“Home sales are running at a pace similar to 2015 levels – even with exceptionally low mortgage rates,
a record number of jobs and a record high net worth in the country…”
– Lawrence Yun, Ph.D., National Association of Realtors (NAR) chief economist, July 23, 2019.
“Imbalance persists for mid-to-lower priced homes with solid demand and insufficient supply,
which is consequently pushing up home prices.”
– Lawrence Yun, Ph.D., NAR chief economist in the context of the U.S. housing shortage, July 23, 2019.
Before diving into the data from the National Association of Realtors (NAR), it is worth mentioning that new conventional housing sales have reportedly ticked up recently, which will be part of a later analysis by MHProNews. That noted, the NAR said this week that existing housing sales, not unlikely manufactured homes, have been slipping. However, the reasons for each decline – conventional housing vs. manufactured homes sales dips – are quite different, as this report and analysis will reflect.
The pull quotes from NAR’s Dr. Yun above, and the report that follows – properly understood – should be clear economic signals that explain why manufactured home sales should be soaring. But as regular readers here – thousands of manufactured home industry professionals who check in daily on #1 MHProNews know – new HUD Code housing sales has been sliding instead of growing for 9 consecutive months in year-over-year sales.
The facts from the respected and massive NAR will be revealing to those seeking understanding. Let’s start with what NAR has said about manufactured homes.
NAR Housing Research, Including on Manufactured Homes
It was just over a year ago that the NAR spotlighted manufactured homes in a report that explored the misunderstood benefits of HUD Code manufactured housing. NAR’s Yun encouraged the study, which was performed by Certified Business Economist (CBE) Scholastica ‘Gay’ Cororaton, included a blog post entitled “Making the Case for Manufactured Homes.”
That seminal research by NAR CBE Cororaton is inexplicably still not publicly visible on the Manufactured Housing Institute (MHI) website.
By contrast, a search of the NAR website today revealed over FIVE THOUSAND results for the phrase ‘Manufactured Housing Institute,’ see the online search screen capture performed earlier today, below. Why such a stunning contrast?
NAR On Land Use…
Land use, zoning, and placement barriers are increasingly being spotlighted as a key underlying element for the lack of affordable housing, particularly in urban and suburban areas. So it is no surprise that NAR hits that issue in the following manner.
“The freedom to buy, sell, and utilize property, as protected in the 5th amendment, underlies all real estate transactions and markets. Any restrictions placed on a property owner from realizing the highest and best use of that property hinders economic growth and development and reduces freedoms inherent in our society,” says the National Association of Realtors (NAR) website.
Under that same topic, their website adds, “Governments shall not arbitrarily infringe on the basic right of the individual to acquire, possess and freely transfer real property, and shall protect private property rights as referred to in the 5th and 14th Amendments of the United States Constitution. This is a foundational element for all REALTORS® and for NAR.”
Rephrased, NAR points to Constitutionally protected rights as among the most potent arguments for a broader application of properly owner rights.
HUD Secretary Ben Carson has repeatedly identified land use, zoning, and placement issues are indeed part of the problem. He said as much in a speech yesterday, 7.23.2019, and in doing so, specifically pointed to manufactured homes and the HUD/NAHB Innovations in Housing Showcase as part of the solution to more affordable housing.
Those private property rights are routinely challenged by a variety of local, state, and federal policies, which impacts consumers, businesses, and investors alike. In fairness, the Manufactured Housing Institute (MHI) has a statement on land use, a review of that is linked below.
A clearer cut ‘call to action’ on land use as it impacts manufactured homes and communities has been issued by the Manufactured Housing Association for Regulatory Reform (MHARR), see that at this link below.
2019 Housing Sales Similar to 2015 Levels, Says NAR
Those varied statements and linked sources tee up the latest, sobering data about housing sales. The NAR has issued the following data points.
“Home sales are running at a pace similar to 2015 levels – even with exceptionally low mortgage rates, a record number of jobs and a record high net worth in the country,” said Lawrence Yun, NAR’s chief economist. Yun says the nation is in the midst of a housing shortage and much more inventory is needed. “Imbalance persists for mid-to-lower priced homes with solid demand and insufficient supply, which is consequently pushing up home prices,” he said.
Yun said other factors could be contributing to the low number of sales. “Either a strong pent-up demand will show in the upcoming months, or there is a lack of confidence that is keeping buyers from this major expenditure. It’s too soon to know how much of a pullback is related to the reduction in the homeowner tax incentive.” From their latest statement:
- The median existing-home price2 for all housing types in June reached an all-time high of $285,700, up 4.3% from June 2018 ($273,800). June’s price increase marks the 88th straight month of year-over-year gains.
- Total housing inventory3 at the end of June increased to 1.93 million, up from 1.91 million existing-homes available for sale in May, but unchanged from the level of one year ago. Unsold inventory is at a 4.4-month supply at the current sales pace, up from the 4.3 month supply recorded in both May and in June 2018.
- Properties typically remained on the market for 27 days in June, up from 26 days in May and in June of 2018. Fifty-six percent of homes sold in June were on the market for less than a month.
- According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage decreased to 3.80% in June, down from 4.07% in May. The average commitment rate across all of 2018 was 4.54%.
- “Historically, these rates are incredibly attractive,” said NAR President John Smaby, a second-generation Realtor® from Edina, Minnesota and broker at Edina Realty. “Securing and locking in on a mortgage now – given the current, favorable conditions – is a decision that will pay off for years to come.”
According to the NAR on May 11, 2018, some housing data bullets. Several of these underscore the point that manufactured homes should be selling at a far more robust pace than has occurred in the past 9 months.
Overview of the Real Estate Market
· 5.34 million existing homes were sold in 2018, according to data from the National Association of REALTORS®. 667,000 newly constructed homes were sold in 2018, according to the U.S. Census Bureau.
· The Association of Real Estate License Law Officials (ARELLO) estimates that there are about 2 million active real estate licensees in the United States.
· According to the 2012 Economic Census, there are 86,004 real estate brokerage firms operating in the United States.
· There are approximately 121.6 million occupied housing units in the United States, according to the 2017 American Housing Survey. The typical owner-occupied home was built in 1978; the typical renter-occupied home was built in 1974. The typical home size is 1,500 square feet. The typical home owner is 55 years old and has lived in the current home for 14 years.
· In 2016, 63.7 % of families owned their primary residence, according to the Federal Reserve’s Survey of Consumer Finances.
Home Buyer Statistics
· First-Time vs. Repeat Buyers:
o First-time buyers: 33%
o Median age of first-time buyers: 32
o Median age of repeat buyers: 55
o Median household income of first-time buyers: $75,000
o Median household income of repeat buyers: $100,000
· The typical home purchased was 1,900 square feet in size, was built in 1991, and had three bedrooms and two bathrooms.
· Among those who financed their home purchase, buyers typically financed 90% of the home price.
· 87% of buyers purchased their home through a real estate agent or broker—a share that has steadily increased from 69 percent in 2001.
· Buyers who would use their agent again or recommend their agent to others: 74%
· Where buyers found the home they purchased:
o Internet: 50%
o Real estate agent: 28%
o Yard sign/open house sign: 7%
o Friend, relative or neighbor: 7%
o Home builder or their agent: 5%
o Directly from sellers/Knew the sellers: 2%
o Print newspaper advertisement: 1%
NAR Membership Statistics
Members to date: 1,342,627 as of April 2019
Number of local associations: 1,148 as of January 2019
Manufactured home industry professionals should stop and ponder those membership and association data points. Why is it that the MHI is so opposed to having competing organizations? Why has there been a purported deal made with a former member to pivot and attack MHI critics? Or why are they pushing for a new bill, which would likely take years to pass – if ever – instead of simply enforcing existing laws on enhanced preemption and the Duty to Serve manufactured housing?
https://www.manufacturedhomepronews.com/federal-bill-that-mhi-prosperity-now-namhco-tout-mharr-opposes-why/
That’s the final episode today of “News Through the Lens of Manufactured Homes, and Factory-Built Housing” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)
Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. Connect with us on LinkedIn here and here.
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