Vacation home sales rise, while investment property sales fall
Purchases of homes by investors has fallen for the fourth straight year according to the 2015 Investment and Vacation Home Buyers Survey from the National Association of Realtors. Meanwhile, purchases of vacation homes have increased to above their most recent peak nine years ago.
The survey is based on responses of 2,000 homebuyers and reveals that investment-home sales in 2014 decreased 7.4% to an estimated 1.02 million. Owner-occupied purchases fell 12.8% to 3.23 million last year.
Vacation-home sales were up 57.4% in 2014 to 1.13 million, the highest level since the survey began.
The proportion of properties bought by investors (19%) fell to below that of vacation-home purchasers (21%) last year while owner-occupiers accounted for 60%, down 7% from 2013.
Construction spending lower in February
Spending on single-family home building was a major factor in the overall drop in construction spending in February. The latest figures from the Commerce Department showed a drop of 0.1% in February after a revised 1.7% decline in January.
Some analysts have called the data another poor reflection on the strength of the housing industry but others are more upbeat and highlight the poor winter in many parts of the country as a reason for slower building activity. Spending on construction of single-family homes was down 1.4% in February while apartment spending was up 4.1%.
Home prices increased steadily in January
Home prices saw a steady rise in January according to the latest S&P/Case-Shiller home price index of 20 U.S. cities. The index was 4.6% higher than a year earlier and following on from a 4.4% rise in December.
Low supply is driving higher prices but David Blitzer of S&P Dow Jones Indices warns that the low mortgage rates and moderate increases in hiring will be erased unless wages also increase: "Home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback.”
Denver saw the biggest increase in prices with an 8.4% rise from January 2013; Miami and Dallas were not far behind at 8.3 and 8.1% respectively.