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Bank of America WeeklyWrapTM

Week of August 14, 2017


Metro areas with greatest inventory changes month-over-month

Metro areas with greatest inventory increases month-over-month
Metro areas with greatest inventory decreases month-over-month

The two charts above show the top five metropolitan areas with the greatest month-over-month increases and decreases in inventory. Inventory changes reflect the local supply and demand of homes and are subject to macro-market trends as well as seasonality. An inventory increase gives buyers more choices and negotiating power, while a decrease means fewer options for buyers.

The first chart shows the metro areas with the greatest inventory increase month-over-month. All five metro areas saw increases above 6%. Three of the metro areas were in the New England area, with the two highest metro areas located in New Hampshire.

The second chart displays the metro areas with the greatest month-over-month decreases in inventory. Lake Havasu City-Kingman, Arizona had the largest decrease with nearly two times the decrease of the other four metro areas. The other four metro areas can all be found in Florida and saw a roughly 3.5% decrease in inventory. This trend suggests that home inventory was tight in Florida in June.

Metropolitan/division Month-over-month
inventory change
Concord, NH 6.77%
Rockingham County-Strafford County, NH 6.22%
Kansas City, MO-KS 6.13%
Burlington-South Burlington, VT 6.09%
Bellingham, WA 6.01%
Metropolitan/division Month-over-month
inventory change
Cape Coral-Fort Myers, FL -3.50%
Punta Gorda, FL -3.68%
Naples-Immokalee-Marco Island, FL -3.68%
Ocala, FL -3.73%
Lake Havasu City-Kingman, AZ -6.52%
The tables above similarly show the month-over-month changes for metro areas with the greatest increases and decreases in inventory. For the most part, the decreases hover around -3%, which still suggests a healthy supply of homes to meet current demand. The inventory decreases in Florida may affect baby boomers, as many of these metro areas are popular for retirees.

Source data: CoreLogic®
Data date: 07/25/2017

Funding snapshot

Percentage of single-family home sales by funding source
Number of single-family home sales by funding source

These graphs show how homebuyers are paying for new single-family homes. According to the second graph, the number of sales of new single-family homes increased by 7% to 168,000 in the second quarter of 2017. This increase in sales may be a result of the recovering housing market.

Quarter Conventional FHA Insured VA Guaranteed Cash Total
2015 Q3 70% 15% 9% 6% 100%
2015 Q4 71% 15% 8% 5% 100%
2016 Q1 69% 17% 8% 5% 100%
2016 Q2 68% 17% 9% 5% 100%
2016 Q3 73% 14% 8% 5% 100%
2016 Q4 71% 14% 9% 6% 100%
2017 Q1 72% 14% 9% 4% 100%
2017 Q2 73% 12% 9% 7% 100%
Quarter Conventional FHA Insured VA Guaranteed Cash Total
2015 Q3 83,000 18,000 11,000 7,000 119,000
2015 Q4 79,000 17,000 9,000 6,000 112,000
2016 Q1 93,000 23,000 11,000 7,000 134,000
2016 Q2 108,000 27,000 15,000 8,000 158,000
2016 Q3 106,000 20,000 12,000 7,000 144,000
2016 Q4 89,000 18,000 11,000 7,000 125,000
2017 Q1 113,000 22,000 14,000 7,000 156,000
2017 Q2 122,000 20,000 15,000 11,000 168,000
These two tables provide a closer look at how homebuyers are paying for new single-family homes.* Most homebuyers purchase their home under a conventional mortgage, while roughly 5% of homebuyers purchase their homes with cash. Cash sales rose to 7% in the second quarter of 2017 to approximately 11,000 — one of the highest points in the last two years. This trend suggests that cash buyers may have an advantage when competing in bidding wars in tight housing markets. Conversely, only about 12% of homebuyers purchased their homes with FHA loans, which is one of the lowest points for FHA loan sales in the last two years.

*For purposes of this chart, percentages have been rounded, leading some totals to appear not to equal 100%.

Source data: U.S. Census
Data date: 07/24/2017

#TomFerryShow episode 126:
How to find investors and calculate risk

Tom Ferry
Tom Ferry is the CEO and Founder of Tom Ferry — Your Coach, the nation's fastest growing real estate coaching organization in North America.footnote 1 Watch this week's Tip of the Week video for resources and strategies to help drive your business to new levels.

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footnote 1The 2013 Inc. 5,000 List, Inc. Magazine, 2013.

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