There’s a reason it’s been difficult to buy a home in recent months.

Mortgage rates have been remarkably low since the summer, and for that reason alone, many prospective buyers have clamored to purchase homes. They’re being tripped up, however, by soaring prices.

Home prices increased 5.9% nationally in August 2020, according to the CoreLogic Home Price Index, compared to a year prior. We have limited inventory to thank for that. The supply of available homes in August decreased by 17% from the previous year, leading to an uptick in demand and creating a housing market loaded with bidding wars as eager buyers compete to win contracts on the limited inventory.

The result? Many buyers are struggling to find homes, so they may not get to take advantage of the phenomenally low mortgage rates.

Is it worth it to buy a home today?

Locking in a mortgage at a low

WASHINGTON (AP) — U.S. construction spending increased 1.4% in August, led by a surge in single-family homes.

© Provided by Associated Press
A new home under construction is shown Thursday, Sept. 24, 2020, in Houston. U.S. construction spending increased 1.4% in August, led by a surge in spending on single-family homes. (AP Photo/David J. Phillip)

The gain was double the 0.7% increase in July, the Commerce Department reported Thursday, and the August gain was better than economists had been expecting. In an additional sign of strength, the government revised higher its earlier estimates for spending in July and June.

Spending on residential construction rose 3.7% ,with a 5.5% rise in spending on single-family homes offsetting a 0.1% dip in apartment construction, a smaller an more volatile sector.

Video: Weakened home affordability could impact urban flight (CNBC)

Weakened home affordability could impact urban flight

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The U.S. housing sector is on a roll, with an increasing number of Americans leveraging on the record-low mortgage rates. The latest pending home sales data for August reached the highest level on record as more Americans signed contracts to buy homes in the month, suggesting that the hot U.S. housing market will maintain the strong spell well into fall.

All-Time High Pending Home Sales

The National Association of Realtors or NAR’s Pending Home Sales Index — a forward looking indicator of home sales based on contact signing — soared 8.8% from July to 132.8 in August, hitting a record high, according to the NAR survey since January 2001. Contract signings are 24.2% higher from the year-ago period as well.

It is worth mentioning that August marks the fourth consecutive month of gains as well as the third year-over-year rise since the pandemic hit the housing market hard. All four

The number of homes under sales contract hit a record high in the National Association of Realtors’ 19-year history of monthly surveys.

© Getty Images
Pending home sales hit record in August

The number of pending homes increased 8.8 percent since July and were up nearly a quarter since last August. The pending home sales index reached a high-water mark of 132.8, meaning sales were 32.8 percent higher than the index’s 2001 starting level of 100.

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“While I did very much expect the housing sector to be stable during the pandemic-induced economic shutdowns, I am pleasantly surprised to see the industry bounce back so strongly and so quickly,” said Lawrence Yun, the association’s chief economist.

Near-zero interest rates from the Federal Reserve have helped push mortgage rates to record lows, which has helped fuel the buying spree.

“Tremendously low mortgage rates – below 3 percent – have again

WASHINGTON (Reuters) – Contracts to buy U.S. previously owned homes surged to a record high in August, suggesting housing market activity was gathering speed amid record-low mortgage rates.

The National Association of Realtors said on Wednesday its Pending Home Sales Index, based on contracts signed last month, jumped 8.8% to an all-time high of 132.8 last month. Economists polled by Reuters had forecast pending home contracts, which become sales after a month or two, rising 3.4% in August.

Pending home sales increased 24.2% from a year ago. The housing market has pressed ahead even as the COVID-19 pandemic has thrown millions out of work. The unemployment burden has fallen disproportionately on low-wage

The market for new homes in the U.S. is continuing its recent torrid pace. Based on the latest sales data reported by the U.S. Census Bureau, the preliminary nominal estimate of the market capitalization for new homes was $30.6 billion in August 2020.

Taking the trailing twelve-month average of the market cap for new homes to factor out seasonality in the data while factoring in data revisions in previous months, we estimate August 2020’s adjusted market cap to be $25.76 billion. In nominal terms, this is the highest this figure has been since August 2006, which can be seen in a chart showing the historical market cap data going back to January 1976.

Perhaps more remarkably, the median sale price of new homes sold in the U.S. fell to an initial estimate of $312,700 in August 2020. The initial estimate of the average sale price of a new home sold

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New US home sales came in well above forecasts in August with a 4.8 percent gain, as the housing market continues to recover from the coronavirus downturn, the Commerce Department said on Thursday.

August’s annualized rate of just over one million sales, seasonally adjusted, came after the upwardly revised annual rate of 965,000 sales reported in July and underscores how housing has managed to climb back from the hit taken during the Covid-19 downturn.

25 SEPTEMBER 2020
9:06 AM

Overall hotel profitability was positive for the second consecutive month, according to STR’s August P&L report.

BROOMFIELD, Colorado—Improvements in U.S. hotel profitability metrics slowed in August, according to STR‘s latest monthly P&L data release.

In a year-over-year comparison with August 2019, the industry reported the following:

• GOPPAR: -91.3% to US$6.90
• TRevPAR: -74.5% to US$55.72
• EBITDA PAR: -112.1% to US$-6.96
• LPAR (Labor Costs): -64.4% to US$27.19

“Overall profitability (GOPPAR) remained in positive territory for a second straight month, but the incremental improvements we had seen over the previous two months slowed,” said Raquel Ortiz, STR’s assistant director of financial performance. “Even though August produced the industry’s lowest year-over-year demand decline since March, revenue was stagnant. TRevPAR for full-service hotels was only 25% of what it was last August, while limited-service properties came in at 38% of last year’s value.”

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Introduction

Housing is a long leading indicator for the economy overall; i.e., it typically peaks over a year before the economy does as a whole, and is also usually one of the first sectors to rebound during a recession.

Thursday morning’s report on August new home sales certainly fit that mold.

Near-15-year high in new home sales is strong confirmation that the long leading housing sector has been surging

As I wrote last week, when housing starts and permits were reported, historically, interest rates have led housing sales and starts, which in turn lead prices, which in turn lead inventory.

Here’s the updated look at mortgage interest rates since the beginning of 2011, measured YoY, vs. single-family housing permits (the least volatile metric), also measured YoY:

Thursday morning the Census Bureau reported new home sales for August. There are two important facts about new home sales:

1. They are the