US Home Sales Fall in Prime Season

April decline of 1.9% comes as mortgage rates stay elevated and prices near highs

US Home sales fell in April for the second straight month, as high mortgage rates and near record prices continue to stall the market during the prime selling season. Sales of previously owned homes decreased 1.9% from the prior month to a seasonally adjusted annual rate of 4.14 million, the National Association of Realtors said Wednesday.

The decline last month came as a surprise to housing analysts. Economists surveyed by The Wall Street Journal estimated sales of previously owned homes rose a seasonally adjusted 1.4% in April from March. But high mortgage rates are keeping a lid on the spring season, typically the busiest time of year in the housing market.

In March, existing-home sales posted their biggest monthly decline in more than a year. The low inventory of homes for sale is also thwarting buyers, because high rates have prompted many homeowners to stay put.

At the current sales pace, there was a 3½- month supply of homes on the market at the end of April, below the four to six months’ supply that is generally considered a market balanced between buyers and sellers. That shortage is pushing prices higher.

The national median existing-home price rose 5.7% in April from a year earlier to $407,600, NAR said. That was the highest price for any April data going back to 1999 and approaching the record high for any month of $413,800. Prices aren’t adjusted for inflation. “Record-high home prices are hitting affordability,” said Lawrence Yun, NAR’s chief economist.

“For a home buyer, it is a very frustrating market out there.” On an annual basis, existing- home sales were down 1.9% in April. These sales make up most of the housing market and were largely based on contracts signed in March and February. Mortgage rates have fallen this month. But the average rate on the standard 30-year fixed mortgage is still above 7%, according to last week’s data from Freddie Mac.

Some people who have been waiting for borrowing rates to fall before selling their homes can’t wait any longer, economists and real-estate agents say.

Source: Wall Street Journal

Real estate prices soar in Manila

Global Home Prices Rise 4.1 Percent Annually In March

According to global property consultant Knight Frank, the first quarter of 2024 witnessed an average annual growth rate of 4.1% across the 44 markets covered by the Knight Frank Prime Global Cities Index, marking the strongest rate of growth since Q3 2022 - a period when interest rates were surging and nearly 70% of central banks were tightening monetary policy.

On a quarterly basis, price growth also showed signs of strengthening, with a 1.1% increase in Q1 2024, up from a 0.3% increase in the last quarter of 2023.

While the current annual growth of 4.1% marks a notable recovery from zero growth seen at the end of 2022, it remains below the long-term average annual growth rate of 5.4%. However, quarterly growth at 1.3% is now aligning with the long-term quarterly average.

Looking across the 44 cities that make up the index, 78% are experiencing annual price growth, while 19% are seeing declines. The rate of price declines has slowed: a year ago, in Q1 2023, nine markets were experiencing annual price falls of more than 5%. In Q1 this year, only one market - Frankfurt - was seeing prices fall at this rate.

Liam Bailey, Knight Frank's global head of research commented, "The rebound in global housing markets is continuing, as evidenced by our Prime Global Cities Index reaching 4.1% annual growth. Rather than heralding a return to boom conditions, the index indicates that upwards price pressures are stemming from relatively healthy demand, set against continued low supply volumes. The pivot in rates - when it comes - will encourage more vendors into the market, leading to a welcome return to liquidity in key global markets."

Global Cities Focus

At the top of the list was Manila with 26.2% annual growth, followed by Tokyo at 12.5%. Indian cities are experiencing strong growth, with Mumbai at 11.5% and Delhi at 10.5%. In fourth place, Perth, at 11.1%, confirms the resilience of key Australian markets.

Manila's strong growth can be attributed to two particular factors: strong economic performance, which has boosted consumer confidence and spending power, and significant infrastructure investment in and around the city, which has also boosted demand.

In Tokyo, the robust growth in house prices early in 2024 can be attributed to two key factors: exceptionally favorable mortgage terms offered by Japanese banks and a weaker yen, which has increased foreign investment in Tokyo's real estate. Despite Japan's overall population decline, Tokyo continues to see a net increase in population due to migration from other parts of Japan.

With annual GDP growth running at over 8%, strong economic growth across India has boosted house prices in the main cities, particularly in Delhi and Mumbai, as our results confirm.

While the Australian market has remained healthy in recent months, there has been a slowing in price growth in most cities. However, Perth has been positively impacted by the rebound in commodity prices, particularly in the mining sector, which is a significant part of Western Australia's economy.

The weaker markets in Knight Frank's index are mainly seeing a continuation of the negative impact of higher interest rates, which is affecting affordability.

Source: World Property Journal

Approved construction projects dip in March

The number and value of construction projects with approved building permits declined in March, according to the Philippine Statistics Authority (PSA).

Approved construction projects totaled 13,320 during the said month, which indicates a 15.5-percent dip from 15,764 projects in the same month last year. In a monthly comparison, it was also lower by 1.7 percent from the 13,551 building permits recorded in February 2024.

The amount of approved projects, meanwhile, totaled P34.07 billion, indicating a 24.3-percent decline from last year's P45 billion and from the previous month's P44.99 billion.

Among the total projects, residential buildings comprised most of the approved constructions at 8,964 or 67.3 percent of the total projects.

"It recorded an annual decrease of 18.1 percent from the same month of the previous year's level of 10,949 constructions," the PSA said.

Majority of the total residential construction work was on single-type houses, with 7,743 valued at P11.18 billion.

Non-residential type of construction, meanwhile, totaled 3,105 during the month and recorded the highest value at P16.37 billion.

The latest number of non-residential constructions during the month fell by 6.1 percent in comparison to last year's 3,307.

In terms of types of structures, the PSA said that residential buildings had the highest average cost of P11,812.95 per square meter (sqm) in March.

This was followed by non-residential constructions with P10,602.23 per sqm, and an addition to existing constructions with P10,364.91 per sqm.

On the other hand, the floor area of approved construction projects declined by 14 percent and was recorded at 2.8 million sqm in comparison to last year's 3.3 million sqm.

Floor area of non-residential constructions reached 1.53 million sqm during the said month, or 54.0 percent of the total area of constructions, while residential constructions recorded 1.27 million sqm, or 44.9 percent of the total floor area of constructions in March 2024.

The PSA said that the Calabarzon Region recorded the highest construction projects and value during the month, with 3,245 approved building permits amounting to P9.04 billion.

Source: Philippine Statistics Authority