Pending Home Sales Rise:

In a housing market equipped with very low mortgage rates, Unemployment at 5% and steady appreciation.....there is just one thing missing: Inventory.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, inched 0.2 percent to 107.7 in October from an upwardly revised 107.5 in September and is now 3.9 percent above October 2014 (103.7). The index has increased year-over-year for 14 consecutive months.e largest segment of the housing market continues to hold on.  Year-over-year, existing home sales rose 3.8% and is on track to record their best annual sales in eight years.

Although further expansion in existing-sales is expected next year, ongoing inventory shortages and affordability pressures from rising prices and mortgage rates will likely temper sales growth to around 3 percent (5.45 million) in 2016. Home prices are expected to slightly moderate from a 6 percent increase in 2015 to 5 percent next year.

"Unless size-able supply gains occur for new and existing homes, prices and rents will continue to exceed wages into next year and hamstring a large pool of potential buyers trying to buy a home," says NAR Chief Economist, Lawrence Yun.

Desire to own a home continues to increase:

First-time home buyers are just 32 percent of all purchases, according to the National Association of Realtors, but more are on their way as sentiment among that group towards owning a home is improving.

The share of buyers saying their primary reason for buying was the simple desire to own a home rose overall and most dramatically among first-time purchasers.

"There are several reasons why there should be more first-time buyers reaching the market, including persistently low mortgage rates, healthy job prospects for those college-educated, and the fact that renting is becoming more unaffordable in many areas," said Lawrence Yun, the Realtors' chief economist. "Unfortunately, there are just as many high hurdles slowing first-time buyers down. Increasing rents and home prices are impeding their ability to save for a down payment, there's scarce inventory for new and existing-homes in their price range, and it's still too difficult for some to get a mortgage."
Debt was the primary reason cited by first-time buyers for the delay in home ownership. They said debt kept them from saving for a down payment for at least three years. More than half of those citing debt pointed to student-loan debt as the main culprit.

While debt continues to stall younger buyers, their attitude toward home ownership appears to be making a dramatic move. Sixty-four percent of first-time buyers surveyed said their primary reason for purchasing was the "desire to own." That is up from 53 percent just one year ago. For repeat buyers, ownership tied with the desire for a larger home. The view of home ownership as a good investment also moved slightly higher to 80 percent; 43 percent of those surveyed said they see housing as a better investment than stocks. 

A few things that have not changed in housing — the median age of buyers (31), sellers (54), and the share of multi generational households buying (13 percent), according to the Realtors survey. Builders have been focused on what they see as growing multi generational housing demand, adding separate entrances and second kitchens.

Today's buyers are using the websites and mobile apps at an ever-increasing pace to find their potential purchases. They are also moving faster, buying in an average 10 weeks compared with 12 between 2009 and 2013. The median time on the market for recently sold homes stayed at four weeks for the second-straight year. This is far less time than historical norms and is due to the still very low inventory of homes for sale that plagues most of the country. 

INFO THAT HITS US WHERE WE LIVE

We should probably be grateful that those who forecast the economic future aren't the people responsible for creating it. Economists have been forecasting a decline in home price appreciation for some time now. And while price gains have slowed a bit, they're still pretty good. 
A global real estate information provider reported U.S. home prices nationwide were up 6.4% year-over-year in September. Annual gains in fact have been ranging between 4.8% and 6.5% for the last 15 months, which sounds like pretty stable appreciation. The firm projects a 4.7% price gain by September 2016, but cautions the increase may dip from September to October.

Another real estate information company reports that the third quarter was the most profitable time to sell a home in 8 years. Homeowners who sold this past July, August, and September made more than during any other quarter since 2007: an average price gain of $40,658, or 17%, over the purchase price of their property. 
Sellers owned their homes for 6.72 years, on average, at the time of sale. Finally, an annual survey by the National Association of Realtors (NAR) revealed that the share of first-time buyers declined for the third year in a row, from 33% to 32%, the second lowest read since 1987's 30% level. Historically, first timers should make up nearly 40% of primary purchases.

A rising tide lifts all boats:

Strong home price gains this spring, summer and fall have given drowning homeowners a new supply of air. While the number of borrowers in a negative-equity position on their mortgages is still high, at just over 14 million, that number is falling fast, especially for those most seriously underwater. There were 6.9 million U.S. homes seriously underwater at the end of the third quarter of this year, according to RealtyTrac, a foreclosure sales and analytic company. It defines "seriously underwater" as owing at least 25 percent more on the mortgage than the home is currently worth. The tally represents 12.7 percent of all properties with a mortgage. The number is down from 7.4 million at the end of the second quarter and is the lowest level since RealtyTrac began looking at underwater data in 2012. "After a lull late last year and early this year, home sales volume and average sales prices picked up dramatically again in the second and third quarters of this year, resulting in a substantial drop in seriously underwater homeowners," said Daren Blomquist, vice president at RealtyTrac. More than 10 million properties today are considered "equity rich," where the borrower owns at least half the home outright. That is 19 percent of all properties with a loan, according to RealtyTrac.But in this case we are not the walking undead but abandoned homes in some state of foreclosure but not yet repossessed by banks and put up for sale which can be a real eye-sore in the neighborhood. All the improvements in home equity would seem to bode well for future home sales, but several barriers still stand in the way. First and foremost is the short supply of homes for sale in general, both new and existing. Homeowners don't want to sell if they're not sure they can't find something better. Second is the fact that home prices are rising more than historical norms right now, and some sellers think they can do better if they wait longer.