Industry News
In May, pending home sales experienced a slight decline of 2.1%, as reported by the National Association of REALTORS® (NAR). This decrease was primarily driven by monthly losses in the Midwest and South, while the Northeast and West saw gains. However, when looking at year-over-year data, all U.S. regions recorded reductions in pending home sales.
Key Highlights:
- Pending Home Sales Index (PHSI):
- The PHSI, a forward-looking indicator based on contract signings, decreased to 70.8 in May.
- This represents a 6.6% drop in pending transactions compared to the same month last year.
- For context, an index of 100 corresponds to the level of contract activity in 2001.
NAR Chief Economist Lawrence Yun noted, “The market is at an interesting point with rising inventory and lower demand. Supply and demand movements suggest easing home price appreciation in upcoming months. Inevitably, more inventory in a job-creating economy will lead to greater home buying, especially when mortgage rates descend.”
This month, we’re diving into the critical issue of advancing homeownership amidst today's market shortages. Join us as Jessica Lautz, NAR’s Deputy Chief Economist and VP of Research, leads a compelling discussion with two dynamic real estate leaders: Danielle Blake, Chief of Commercial, Miami REALTORS®, and Randy Day, 2022 President, Utah Association of REALTORS® and President of Presidio Anasazi Realty Moab.
Highlights of the Podcast:
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Shared Challenges, Unique Solutions: Despite operating in vastly different real estate markets, Miami and Moab face similar barriers to homeownership, including a shortage of buildable land and restrictive zoning and planning ordinances.
The U.S. housing market is currently short more than 300,000 affordable homes for middle-income buyers, according to a recent analysis by the National Association of Realtors® (NAR) and Realtor.com®. This ongoing housing inventory crunch is hitting middle-income buyers harder than any other income bracket, underscoring a critical issue in the current market landscape.
The housing affordability and supply report from NAR and Realtor.com® highlights the stark disparity in available home listings across different price ranges. A balanced market, as defined in the report, is one where half of all homes for sale fall within a price range affordable for middle-income buyers. Unfortunately, this balance is far from being achieved in today’s market.
When the leadership of Miami REALTORS® brainstormed out-of-the-box responses to their region’s affordable housing crisis, their ideas ranged from housing teachers at school sites to constructing homes within parking garages. Ultimately, they decided to pursue an innovative solution: repurposing shipping containers into affordable dwellings. This initiative, supported by a REALTOR Party Community Outreach grant, involved developing two discarded containers into a 480-square-foot home on land contributed by the county. Over six years, they navigated regulatory barriers and effected significant improvements in the system, paving the way for future affordable housing developments.
Overcoming Regulatory Challenges
“The battleground of affordable housing is going to happen in the zoning and planning departments in all of our cities throughout the country,” says Miami REALTORS® 2022 Board Chair Fernando Arencibia, Jr. Danielle Blake, the board’s Chief of Commercial, emphasizes that the primary takeaway from the project was not the unit itself but the process. Their mission was to study the barriers to make this a viable solution for other builders.
The prototype, developed in partnership with NAR, Miami-Dade County, and the City of South Miami, was sold to a buyer whose income is 80% of the area median. By restrictive covenant, the property must remain affordable for a minimum of twenty years.
