NW REporter

News In Brief

  • The National Association of REALTORS® released its annual profile of homebuyers and sellers, which found the boom in housing prices brought on by a pandemic-era surge in activity and increasing mortgage rates led to fewer people being able to buy their first home. First-time buyers made up 26% of sales in 2022, the lowest total since the group began collecting the data. People buying their first home also got older, rising to 36 this year compared to 33 last year, another all-time high. Buyers were also moving farther away where they had lived before when purchasing a new home. The median distance between the home buyers purchased and where they moved from was 50 miles, the highest ever recorded. From 2018 to 2021, the median was 15 miles. The share of white homebuyers went up this year to 88%. Hispanic or Latino buyers were the only other group to increase at 3%, while Black buyers were 3% of the total and Asian people were 2%. White buyers were more likely to be repeat buyers, which meant they could cash in on equity from their previous purchase to help absorb the increased cost of moving, NAR said.
  • New homes and apartments in Washington will be required to install heat pumps beginning in July, the Washington State Building Code Council ruled last month. The council voted 9-5 last week on the ruling, a decision that could help the state further reduce carbon emissions by electrifying the heating systems of new buildings. The council, which is appointed by the governor, voted in April to revise the state’s building code to require heat pumps in large and commercial buildings. Homes, apartments, offices and other buildings account for a large portion of planet-warming greenhouse pollution, according to the Seattle Times. Residential, commercial and industrial buildings account for more than a third of emissions in Seattle, a quarter statewide and around 40% globally. Still, a suite of bills aiming to update building codes, improve energy use in office buildings and lower the cost of heat pumps all failed to pass the state Legislature earlier this year. Heat pumps are an increasingly popular and energy-efficient alternative to conventional gas furnaces and air conditioners. They use electricity to power a compressor, pumps and fans to transfer heat by pushing heat outside your home during the warmer parts of the year, and pulling it in during the cold. Modern heat pumps can reduce electricity consumption by up to half, compared with most conventional heaters, but the upfront cost is still a concern for many interesting in transitioning from fossil fuels to electricity in heating their residences.
  • The largest U.S. homebuilder offered up the latest examples of how quickly buyers are fleeing the housing market. Buyers canceled nearly a third of deals in D.R. Horton Inc.’s (DHI) fiscal fourth quarter, up from 19% a year ago, the Texas-based company said Wednesday. New orders declined 15% to 13,582 homes from a year earlier, down by 10% in value. The company is responding by walking away from land deals that don’t meet certain metrics as the market has shifted, writing off $34 million of deposits and expenses tied to the transactions, and offering more incentives to sellers to close deals. The historic increase in mortgage rates this year, sparked by the Federal Reserve’s aggressive campaign to tame inflation, has pulled back housing demand and crushed builder confidence. The average rate on a 30-year fixed-rate mortgage sits near 7%, according to Freddie Mac. A year ago, it was more than half that at 3%. Expensive borrowing costs have slumped mortgage demand, which slipped to a 22-year low, per the Mortgage Bankers Association, and prompted brokerage firms, including Redfin on Wednesday, to eliminate portions of their workforce. D.R. Horton quarterly results — which missed on earnings and revenue — also echoed what Pultegroup (PHM) previously reported in its latest earnings release. Order cancellations increased 24% in the period, up from 15% in the second quarter and 10% a year ago, the Atlanta-based builder reported in October, while purchase contracts fell 28% from a year ago. As a result, the homebuilder is trying to pivot by increasing incentives and shift from mortgage rate buy-downs to price cuts. A similar move was also shared by D.R. Horton, which is “offering mortgage interest rate locks and buy-downs and other sales incentives to address affordability concerns and to drive sales traffic to our communities,” Bill W. Wheat, executive vice president and CFO, said. Wall Street analysts say it will come down to “stabilization” in rates for home builders; otherwise it will be a long road ahead.
  • Homebuyers in Seattle need to earn nearly double the average American’s annual income to afford a home. According to a new report from Redfin, the “annual income required to afford a median-price home” in October was $205,312 in the Emerald City. Nationally, the average income required is $107,281 — up 46% from a year ago — to afford a $2,682 monthly mortgage payment due to mortgage rates nearly doubling and inflation, Redfin said. The monthly mortgage payment on a “typical home” in Seattle as of October was $5,133 a month, a sharp increase from $3,525 in October 2021, according to the Seattle-based real estate brokerage. Seattle’s median sales price in October 2022 was $763,000, Redfin’s report said. The income required to purchase a home in San Francisco ($402,821 for a $10,071 monthly mortgage payment) and San Jose ($363,265, $9,082) are the highest in the country, according to the report. “The income required to buy a home then skyrocketed in 2022 as mortgage rates rose at their fastest pace in history, reaching 7% by the end of October (though rates posted their biggest single-day decline on record on Thursday upon news that inflation cooled),” Redfin’s report said. “Home prices also continued to increase for much of the year, though they’ve now started declining from their peak and year-over-year growth has now slowed to around 3%.”Click here for the full Redfin report.
  • Washington is among the best states in the country for lung cancer survival rates, according to the American Lung Association’s 2022 State of Lung Cancer report. But there’s a big problem, the report shows. Not a lot of people who are eligible for an early screening in Washington state actually get them. According to the 2022 State of Lung Cancer report, only about 6% of eligible people in Washington state actually get screened for the disease early. That percentage is just above the national average. The report shows about 11.5% of Washington state’s population currently smokes. That report ranks Washington as one of the highest states in the country. The chances of survival 5 years after a lung cancer diagnosis is much higher, nearly 30%, the report shows. Statistics from the American Cancer Society show more people die of lung cancer than all other types of cancer. An estimated 2,700 people have lost their lives to cancer in Washington state this year. According to the American Lung Association, people of color who are diagnosed with lung cancer face worse outcomes compared to white Americans, including a lower survival rate. They’re also less likely to be diagnosed early, get surgical treatment, or more likely to receive no treatment at all, the Association said. Click here for more resources, tools and to take a quick survey to see if you or your loved one qualifies for a lung cancer screening scan.
  • The sixth-most expensive zip code in the United States, based on median home sales prices, belongs to King County. According to PropertyShark’s list of the top 100 most expensive U.S. zip codes, Medina (98039) ranked No. 6 with a record-high median sales price of $4,750,000. PropertyShark, a New York City-based real estate data source, said this year marked the first time a Washington state zip code cracked the top six. A record 14 zip codes throughout the country surpassed the $4 million median mark, led by Silicon Valley’s Atherton ($7,900,000), Sagaponack, Suffolk County, NY ($5,750,000), Ross, Marin County, Calif. ($5,500,000), Miami Beach, Miami-Dade County, Fla. ($5,200,000) and Beverly Hills, Los Angeles County, Calif. ($5,122,000). California is home to 19 of the top 23 spots, and 21 of the 100 priciest zip codes came from Los Angeles County. PropertyShark said it ranked the zip codes based on closed-sales data. Following Medina on the Washington state list are a host of eastside cities; Bellevue had three zip codes fall in the state’s top 10 (Medina, 98039: $4,750,000; Mercer Island, 98040: $2,280,000; Bellevue, 98004: $1,900,000; Sammamish, 98075: $1,869,000; Kirkland, 98033: $1,558,000; Bellevue, 98006: $1,550,000; Sammamish, 98074: $1,540,000; Woodinville, 98077: $1,535,000; Bellevue, 98005: $1,396,000; Redmond, 98053: $1,320,000). Seattle did not crack the top 10. The top 100 most expensive zip codes in the country are located in just 10 different states, and 70% come from California, according to PropertyShark. Click here for the full report from PropertyShark.
  • The Seattle Times reported that Washington is projected to collect $762 million more in revenue in the current two-year budget period than projected last quarter, according to figures recently released by the Economic and Revenue Forecast Council. In the upcoming two-year budget cycle, spanning mid-2023 to mid-2025, Washington is expected to see $681 million more than previously projected. Gov. Jay Inslee will release his budget proposal for that time frame in December. The revenue forecast will guide Inslee and state lawmakers when they convene early next year for a legislative session in which they’ll pass the budget for the 2023-25 biennium. The next revenue forecast is scheduled for March, roughly two months into the legislative session.