Builder Confidence Slips For First Time In Seven Months

According to the National Association of Home Builders’ Housing Market Index, builder confidence slipped three points to 25 in April, the first decline after seven consecutive months of gains. The index measures builders’ perception of the market for newly built, single-family homes on a scale where any number below 50 indicates more builders view conditions as poor than good. David Crowe, NAHB’s chief economist, said the decline is a pause in what has been a fairly rapid build-up in confidence since last September. According to Crowe, despite increased interest from potential buyers, builders have yet to see that interest translate into sales activity. Still, regional results show that most of the decline was felt in the Midwest, where confidence was down eight points. The Northeast posted a four point gain and reached its highest level since May 2010. The West was unchanged at 32 and the south dropped three points to 24.

Americans Expect Rising Prices, Say It's Time To Buy

Fannie Mae’s March 2012 National Housing Survey finds Americans more confident in their financial situation and more optimistic about the housing market than in previous months. According to the monthly survey, 73 percent of respondents say now is a good time to buy a home, which is up three points from February and at its highest level in more than a year. Doug Duncan, vice president and chief economist of Fannie Mae, said conditions are coming together to encourage people to want to buy homes. Rising rent and an expectation of higher home prices are among the conditions making homeownership more and more attractive to Americans. The number of participants who say they expect rental prices to rise over the next year is at its highest level ever recorded. And the number expecting an increase in home prices over the next 12 months is up five percent from March. Also, only 12 percent say they expect their financial situation to get worse over the next year, which is tied for the lowest level to date. More here and here.

Mortgage Rates Fall To Lowest Level In A Month

According to the Mortgage Bankers Association’s Weekly Applications Survey, mortgage rates fell to their lowest level since March 9 last week. The average contract interest rate for 30-year fixed-rate mortgages dropped to 4.10 percent from 4.16 percent the week before. But, despite the drop, the Market Composite Index, which measures total mortgage loan application volume, was also down, slipping 2.4 percent from the week before. Both the Refinance and Purchase Index decreased slightly, though no adjustment was made for Good Friday. Also in the report, the refinance share of mortgage activity was 70.5 percent and the share of applications for investment properties increased to 8.3 percent, up from 7.4 percent in February. More here.

Improving Markets Index Hits 101 In April

The National Association of Home Builders/First American Improving Markets Index identifies metropolitan areas that have seen growth in housing permits, employment, and home prices for at least six straight months. In April, the index hit 101 moving up two from the previous month. Barry Rutenberg, the NAHB’s chairman, said a total of 35 states are now represented on the list, with 10 states having four or more entries. Rutenberg says the improvement means at least 101 individual metros are showing measurable and consistent signs that they are headed in the right direction. In April, 13 metros were added to the list while 11 markets fell off the list. A total of 88 metropolitan areas held on to their spot from the month before. More here.

Gov't Scorecard Finds 2012 Off To A Strong Start

The U.S. Department of Housing and Urban Development and the U.S. Department of the Treasury released their March housing scorecard,which compiles key housing market data and the results of the government’s recovery efforts. And though the report still finds fragility in the market, it also shows that home sales are off to their strongest start since 2007, after upwardly revised January numbers and a solid February for existing-home sales. Also, mortgage delinquency rates continue to fall and are substantially below last year’s levels. And, according to the scorecard, the administration’s recovery efforts have started more than 5.8 million mortgage modification arrangements since April 2009, including 1.8 million HAMP trial modifications. More here.

Rising Rents Make Buying A Better Deal

This year’s selling season comes with an added dose of optimism due, in part, to the increasing cost of renting a home or apartment. A survey by research firm Reis, found the average apartment’s rent rose 2.7 percent last year and, in some markets, was up more than five percent. And, though historically renting has been 10 percent cheaper than buying a home, an analysis from Deutsche Bank found that the gap began closing in 2010 and, by the end of last year, renting was nearly 15 percent more expensive than buying. This, along with high affordability and low mortgage rates, has industry analysts optimistic that 2012 could be the first year since 2005 that the number of renters entering the housing market increases from the previous year. It is also one of the chief reasons for an increase in optimism as the housing market enters the spring-selling season. More here.

Outlook Forecasts Economic Growth, Housing Recovery

Improvements in the labor market and overall economy have led to optimistic forecasts for the housing market in 2012. In their latest Economic and Housing Market Outlook report, Freddie Mac sees an awakened economy spurring housing forward after years of somewhat depressed conditions. Frank Nothaft, Freddie Mac’s vice president and chief economist, says a variety of encouraging indicators suggest that the housing market may be feeling a nascent recovery and more neighborhoods may see stabilization of demand and values this spring. The report cites increases in housing starts and sales and continued gains in home builder and housing professionals’ confidence as evidence of an improved market. It also credits low mortgage rates and high affordability, along with consumer confidence and perceptions of the job market, as a reason behind increased housing demand. More here.

Refinance And Purchase Activity Increase As Rates Drop

According to the Mortgage Bankers Association’s Weekly Applications Survey, total mortgage application volume picked up 4.8 percent last week from the week before. The jump in demand was fueled by a 7.2 percent surge in the Purchase Index and a 4.0 percent spike in refinance activity, which had been down in previous weeks. Michael Fratantoni, MBA’s vice president of research and economics, said applications to buy a home are more than 2.0 percent above the level at this time last year and purchase applications for conventional loans are now nearly 10 percent above last year’s levels. Refinance activity accounted for 71.2 percent of all mortgage activity. The average contract interest rate for 30-year fixed-rate mortgages was 4.16 percent, down from 4.23 percent the previous week. More here and here.

Stabilizing Prices Bring Forecasts Of Future Improvement

A roundup of price reports and recent housing data from the National Association of Realtors finds that, though home values showed slight declines in January, there are signs of further price stabilization due to improving inventory levels, declining distressed property sales, and strong buyer traffic. And, when excluding distressed property sales, home prices actually showed a slight increase in January. Early measurements for February show positive improvements in prices. For example, existing home prices saw their first year-over-year increase since 2010 and distressed property sales, which are typically sold at a discount and put downward pressure on prices, have fallen to 34 percent of all sales, down from 40 percent a year ago. Declining inventory and fewer distressed sales should provide further support for home prices. And, with high affordability and rising rents, purchasing a home may be the more affordable option for house hunters this year. More here.

Housing Analysis Says Many Markets Bottomed In 2009

According to data released by Pro Teck Valuation Services, many housing markets across the country bottomed in 2009, despite industry analysts saying prices had further to fall. The data shows that many markets are already stabilizing or rebounding. Tom O’Grady, Pro Teck’s chief executive, said their data indicates that prices should be gradually increasing over the next few years, though the rate at which they increase will depend on the specifics of each individual market. The evaluation divided the number of non-distressed property sales by the total housing stock in each region as an indicator of future price performance. In addition, Pro Teck listed the top 200 markets and found that states, such as Texas and Oklahoma, that experienced a boom from the oil industry are among the best performing markets for single-family homes. More here.