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U.S. & Canada Real Estate Update: Looking at the First Half of 2019 08.1.2019 | Joe Palumbo

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Nothing impacts the cost of your relocation program like the real estate market. Its many ebbs and flows dictate just how easy (or tough) it’s gonna be for your mobile employees to get their heads out of the home buying/home selling process and keep focused on their new roles.

To that end, we provide routine assessments of current market conditions around the world. In this post, I’ll focus on the U.S. and Canadian markets and how they weathered the first half of 2019.

Existing home sales fell 1.7% in June to 5.27 million units at a seasonally adjusted annual rate. Through the first half of 2019, sales are running 4.2% below sales through the first six months of 2018. The median price of existing homes sold in June was $285,700, a 4.3% gain over the median price of homes sold in June 2018, according to the National Association of Realtors (NAR).

Industrial production was unchanged in June, generating a 1.3% gain over the past year. Production through the first half of the year is falling at a 1.7% annual rate; a year ago the YTD change was a 3.1% gain. During this recovery, industrial production has grown at a 2.3% average annual rate. (Federal Reserve Board of Governors, July 16, 2019.)

The average rate on 30-year fixed-rate mortgages in Freddie Mac’s survey was 3.75% during the week ending July 25, down six basis point from the previous week. The rate averaged 3.77% in July, down from 3.80% in June and 4.07% in May. (Freddie Mac Primary Mortgage Market Survey, July 25, 2019.)

Home sales recorded via Canadian MLS® Systems were little changed in June 2019 following a string of monthly gains recorded in March, April and May. Although running close to its 10-year average and up nearly 10% from the six-year low reached in February 2019, activity remains well below levels recorded over much of 2015, 2016 and 2017.

“There’s a growing divergence in Canadian housing market trends between eastern and western Canada,” said Gregory Klump, Chief Economist of the Canadian Real Estate Association (CREA). “While sales activity in Canada’s three westernmost provinces appears to have stopped deteriorating, it will be some time before supply and demand there becomes better balanced and the outlook for home prices improves.”

Highlights:
• National home sales edged back 0.2% month-over-month (m-o-m) in June.
• Actual (not seasonally adjusted) activity ticked up 0.3% year-over-year (y-o-y).
• The number of newly listed homes rose 0.8% m-o-m.
• The MLS® Home Price Index (HPI) climbed 0.3% m-o-m in June but was down 0.3% y-o-y.
• The actual (not seasonally adjusted) national average sale price was up 1.7% y-o-y.

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Written by Joe Palumbo

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Joe Palumbo, SRA, is Vice President of Real Estate Services for Weichert Workforce Mobility. He has over 30 years of real estate experience and has been qualified by the New Jersey and New York State Board of Real Estate Appraisers as an instructor of Residential Real Estate. He is a State Certified Residential Appraiser and licensed Realtor and was named to the New Jersey Board of Real Estate Appraisers in 2011.

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