Archive for September 2013

New Home Construction On The Rise

According to the U.S. Census Bureau and the Department of Housing and Urban Development, permits to build new single-family homes rose 3 percent in August, reaching their highest level since 2008. The improvement, combined with a 7 percent jump in single-family housing starts, provides more evidence of a consistent and sustained recovery in the residential housing market. And, in addition to the obvious benefits to housing, gains in new-home construction are closely tied to the broader economy. In fact, economists’ estimate that every new home built leads to the creation of three jobs for a year. Demand for new homes is expected to continue, as household formation numbers recover from historic lows. More here and here.

Existing Home Sales Up in August

Sales of previously owned homes rose in August, according to the National Association of Realtors. Total existing-home sales increased 1.7 percent from the month before and were 13.2 percent above year-before levels. Regionally, sales were up in the Midwest and South, flat in the Northeast, and down in the West. But, despite reaching the highest sales pace since February 2007, Lawrence Yun, NAR’s chief economist, said the market may be experiencing a temporary peak. Yun cautioned that sales may be uneven in the months ahead due to tight inventory and less favorable affordability conditions. In short, fewer homes for sale puts upward pressure on prices. In fact, the median home price in August was up nearly 15 percent from 2012 and has posted double-digit increases for nine consecutive months. More here.

Average Mortgage Rate Dips, Refinance Demand Surges

A drop in the average contract interest rate for 30-year fixed-rate mortgages caused an 11.2 percent spike in demand for mortgage applications last week, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. The increase was due, in part, to an 18 percent surge in the Refinance Index and a 3 percent jump in the seasonally adjusted Purchase Index. The previous week saw a 13.5 percent drop in overall demand for mortgage applications, despite an adjustment for the Labor Day holiday. Last week’s recovery brought demand back to nearly the same level as before the holiday. More here and here.

Builders Confident In Market For New Homes

When it comes to gauging the health of the market for newly built homes, professional builders offer an unique perspective. Because of this, the National Association of Home Builders conducts a monthly survey to determine the level of confidence home builders have in the market. The survey, conducted for the past 25 years, scores builders’ confidence so that any number above 50 indicates more builders view conditions as good than poor. In September, the Index was unchanged from the previous month at 58. September’s reading follows four consecutive months of gains. Rick Judson, NAHB’s chairman, said confidence is holding at the highest level in nearly eight years but buyers are beginning to express more hesitancy due to recent increases in mortgage rates. Despite the increases, however, interest rates are still quite low based on historical norms, Judson said. More here.

Foreclosure Starts Fall To Lowest Level Since 2005

In yet another sign of recovery in the housing market, August foreclosure starts were 44 percent lower than one year ago and are now at their lowest level since December 2005. A total of 55,775 properties began the foreclosure process during the month, according to RealtyTrac’s most recent U.S. Foreclosure Market Report. The drop drove total foreclosure activity down 2 percent from the month before and 34 percent below August 2012. Despite the improvement, some areas of the country saw increases. Daren Blomquist, vice president of RealtyTrac, said foreclosure flash floods will continue to hit some markets over the next few months as delayed foreclosure starts are quickly pushed into the pipeline. More here.

Majority of Americans Say Now Is A Good Time To Buy

Fannie Mae’s National Housing Survey polls Americans each month to assess their perception of the housing market, including attitudes toward owning or renting a home, price and rate changes, consumer confidence, household finances, and the overall economy. According to the results of the most recent survey, Americans’ optimism about housing growth has begun to plateau after trending upward since the beginning of the year. Still, a majority of respondents say now is a good time to buy a home and the number who said they’d prefer to buy if they had to move increased from last month. The percentage of people who believe it’d be easy for them to get a home mortgage also increased from the previous month’s survey. Overall, participants said they think home prices and rent will rise over the next year, while the number of people who said mortgage rates would increase over the same time period fell slightly from the month before. More here.

Rising Home Prices Help Underwater Homeowners

The number of homeowners who owe more on their mortgages than their home is worth has fallen by 42 percent since the beginning of 2012. The positive trend has resulted in 5 million fewer underwater homeowners across the nation, according to the latest housing scorecard from the U.S. Department of Housing and Urban Development and the U.S. Department of the Treasury. The monthly scorecard collects key housing data and the results of the administration’s foreclosure prevention programs. Kurt Usowski, HUD’s deputy assistant secretary for economic affairs, said the more than 40 percent drop in underwater homeowners indicates that we are moving in the right direction. The improvement is largely due to continuing gains in home prices. Recent price reports have values up more than 12 percent over the past 12 months. More here.