Despite the inventory of homes for sale in November reaching an eight-month low, home sales were still up 2.1 percent from a year ago, according to the National Association of REALTORS®.
As is the trend during the holiday season, home loan application volume slowed down in the last quarter of 2014. A mid-December report by the Mortgage Bankers Association showed figures down almost 12 percent compared to the same time one year ago. Home loan rates are still hovering near historic lows.
A good sign for new home construction in early 2015: in early November, homebuilders were granted almost 5 percent more permits to break ground—the highest amount in six years. Permits usually have a three to four month lead on housing construction, and the number of approved permits for new builds portends an optimistic start to the new year.
Housing starts dropped 1.6 percent in November after two back-to-back monthly increases, yet the annual pace of 1.028 million units was still up almost 8 percent when compared to the first 11 months of 2013, according to Reuters.
A December Financial Times survey forecasted that the amount of existing homes for sale will increase, as will competition from new homes and homebuilders. Millennials were predicted to see more job stability and to create households. Indeed, with job gains and wage growth starting to accelerate, first-time buyers are heading back into the market. This group accounted for 31 percent of home purchase transactions in November, the biggest share since October 2012. Will this mean an increase in first-time home purchases as a trend for 2015? Tune in to May’s Homes & Money Newsletter to find out.