Tag Archive for norms

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.

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.

Smaller Metros Leading The Housing Recovery

Nationwide, housing and economic activity is 86 percent back to normal, based on current permits, prices, and employment data. In fact, more than 35 percent of all markets tracked by The National Association of Home Builders Leading Market Index are operating at 90 percent or better of their previous normal. The index tracks 350 metro areas across the country and identifies those that are now approaching or exceeding their previous norms. According to the most recent release, 56 out of those 350 have returned to or surpassed their normal levels of economic and housing activity. And nearly half of the improved markets are areas with populations less than 500,000. David Crowe, NAHB’s chief economist, said 45 percent of metro areas are recovering at a faster pace than the nation as a whole, with smaller markets leading the way. The results are a good sign that the housing recovery’s progress will continue in 2014. More here.

Gov’t Scorecard Finds Progress in Housing

New Home purchases and home prices remain strong while foreclosures continue to fall, according to the November edition of the federal government’s housing scorecard. The monthly scorecard collects key housing data and the results of the administration’s recovery efforts. Released by the U.S. Department of Housing and Urban Development and the U.S. Department of the Treasury, the most recent scorecard finds progress in the housing market, though officials caution that the overall recovery remains fragile. Still, according to the report, housing affordability remains above historical norms, despite rising prices and mortgage rates. Kurt Osowski, HUD’s deputy assistant secretary for economic affairs, said continuing growth in the economy and job market, along with rising home prices, have combined to reduce foreclosure starts to levels not seen since 2005. More here.

Young Adults Could Hold Key To Future Home Sales

The number of adults under the age of 35 living with their parents is at its highest level since 1981. That, combined with the fact that the homeownership rate for those aged 25 to 34 is at an all-time low, means home sales could be greatly impacted as these young adults move out and buy homes of their own. In fact, if population to homeownership ratios return to a level consistent with their historical norms, the 1.8 million individuals currently living at home could equal 590,000 households and nearly 200,000 new homeowners, according to research from Danielle Hale, a research economist with the National Association of Realtors. An additional 200,000 homes sold this year would represent a 4 percent improvement in this year’s projected sales level. More 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.