Archive for March 2014

Housing Market Still Healing, Making Progress

March 11, 2014 Housing Market Comments Off on Housing Market Still Healing, Making Progress

The housing market has made significant strides in the past year but is still healing from the Great Recession, according to a new report from the U.S. Department of Housing and Urban Development and the U.S. Department of the Treasury. The February edition of the administration’s Housing Scorecard shows significant progress in a number of key areas. For instance, the scorecard notes that purchases of new homes rose, foreclosure completions continued trending downward, and home prices were stable during the month. Still, Kurt Usowski, HUD’s deputy assistant secretary for economic affairs, says there is work to be done. Usowski says the administration’s efforts to stabilize the housing market are having a positive effect but the encouraging news does not detract from the need to build on the progress. Among the highlights in the report, homeowner equity continues to rise, with the Federal Reserve announcing a 4.3 percent spike in the fourth quarter of 2013. Homeowners’ equity has risen 60 percent since the beginning of 2012. More here.

Economic Confidence Flat In February

March 10, 2014 Housing Market Comments Off on Economic Confidence Flat In February

Since the government shutdown last October, Americans’ confidence in the economy has been on the rise. The shutdown caused a dramatic plunge in economic confidence but it bounced back quickly, with subsequent improvement bringing it back to levels last seen before the government gridlock. According to a recent release from Gallup, however, those gains stalled in February. The level of confidence in current conditions and perceptions of whether the economy is getting better or worse saw no change from the month before. But, rather than signaling a coming slowdown, Gallup feels that – with federal fiscal matters temporarily resolved – confidence should have a chance for significant improvement, especially as the seasons change. Last spring and summer saw a surge in confidence and, if this year follows the same pattern, economic confidence could reach positive levels this year, surpassing previous highs. Gallup’s Economic confidence Index is based on Gallup Daily tracking interviews conducted with more than 13,000 U.S. adults throughout each month. More here.

Housing Markets Nationwide Return To Normal

March 7, 2014 Housing Market Comments Off on Housing Markets Nationwide Return To Normal

The National Association of Home Builders’ Leading Markets Index is a measure of the housing market’s health that looks at housing and economic activity in 350 metropolitan areas across the country. The Index scores each area based on their average permit, price, and employment levels for the past year divided by their annual average over the last period of normal growth. According to this gauge, 59 of the 350 included metros have returned to or exceeded their last normal level of economic and housing activity. Kevin Kelly, NAHB’s chairman, said markets are returning to normal levels despite the cold weather that has constrained market activity this winter. According to Kelly, this bodes well for the remainder of 2014, as the job and housing markets continue to mend and warmer weather helps boost home sales activity. With this latest release, the number of markets operating at or above 90 percent of previous norms has climbed to 130. More here.

Mortgage Rate Drop Boosts Demand

March 6, 2014 Housing Market Comments Off on Mortgage Rate Drop Boosts Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages fell last week. The drop in rates was the first following two consecutive weeks of increases and led to a 9.4 percent spike in total mortgage application demand, which includes both purchase and refinance activity. The seasonally adjusted Purchase Index, which is an indicator of future home sales, jumped 9 percent from one week earlier, while the Refinance Index rose 10 percent. The improvement puts purchase activity 6 percent higher than its level two weeks ago, though it still trails last year’s pace by 19 percent. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Buying More Affordable Than Rent In 100 Largest Metros

March 5, 2014 Housing Market Comments Off on Buying More Affordable Than Rent In 100 Largest Metros

Though mortgage rates rose in 2013, they are still well below historical norms. And, according to a new report from Trulia, historically low rates mean buying a home is still cheaper than renting in the 100 largest housing markets across the country. Even with last year’s price increases, mortgage rates would have to hit 10.6 percent before renting a home was more affordable than buying one. Jed Kolko, Trulia’s chief economist, said today’s mortgage rates would be the envy of buyers from the 1980s, ’90s, and 2000s. But Kolko also warns buyers that, in many markets, the rent-vs-buy decision depends on what happens to prices after you buy. Sharp price appreciation could make homeownership essentially free, Kolko said. But, on the other hand, price decreases could mean renting, in retrospect, would’ve been the better deal. Still, when Trulia calculated the cost of renting vs. buying assuming that prices will rise or fall as they did during each market’s worst seven-year period, buying remained more affordable than rent in all but 37 of 100 metro areas. More here.

Economy’s Slow Start Won’t Derail Growth

March 4, 2014 Housing Market Comments Off on Economy’s Slow Start Won’t Derail Growth

Fannie Mae’s Economic & Strategic Research Group expects economic growth to post modest gains in 2014, despite a slow start to the year. Various factors have contributed to the decline in economic activity during the first quarter of the year, including harsh weather and slower employment growth. In fact, cold winter weather has been blamed for slowing everything from residential construction to consumer spending and home sales across the country. Still, Fannie Mae expects these conditions to be temporary and believes the economy will accelerate later this year. Doug Duncan, Fannie Mae’s chief economist, said they expect the impact from special factors currently weighing on activity to reverse and believe there will be a sufficient pickup to meet their forecast for modest economic growth in 2014. More here.

Pending Home Sales Unchanged In January

March 3, 2014 Housing Market Comments Off on Pending Home Sales Unchanged In January

The National Association of Realtors’ Pending Home Sales Index is a forward-looking indicator of future existing-home sales that measures the number of contract signings each month. In January, the Index was virtually unchanged, rising 0.1 percent above December’s upwardly revised estimate. Lawrence Yun, NAR’s chief economist, said ongoing disruptive weather patterns across much of the U.S. have inhibited home shopping. Yun believes that weather, combined with low inventory and declining affordability levels, have slowed home sales. But despite slowing this winter, the sales pace is expected to pick up after the first quarter and total existing-home sales are projected to reach over 5 million by the end of the year. Regionally, pending sales rose in both the Northeast and South, while dropping in the West and Midwest. Yun says new home construction may be the key to alleviating inventory issues and taming price growth. The median existing-home price is expected to grow 5 to 6 percent in 2014. More here.

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