The National Association of Realtors’ Pending Home Sales Index is a forward-looking indicator based on contract signings but not closings. In May, the index climbed 5.9 percent from the previous month and is 13.3 percent above year-before levels. Lawrence Yun, NAR’s chief economist, said the housing market is clearly superior this year compared to the past four years. The increase in contract signings marks 13 consecutive months of year-over-year gains, Yun said. Regionally, the West and Midwest posted the strongest gains over the previous month, with the West gaining 14.5 percent month-over-month. In the Midwest, pending home sales are 22.1 percent higher than they were in May 2011. More here and here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, mortgage rates increased a percentage point but remained near all-time survey lows. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 3.88 percent from 3.87 percent the week before. But, despite near record-low rates, mortgage application volume was down 7.1 percent last week. Michael Fratantoni, MBA’s vice president of research and economics, blamed the drop on a fall-off in refinance applications for government loans, which more than doubled the prior week. Still, refinance activity remains strong and accounted for 79 percent of total application volume. Purchase activity dipped 1.0 percent from the week before. More here and here.
CoreLogic reports that the current shadow inventory has fallen by 14.8 percent since April 2011 and now stands at 1.5 million units, or a four-month supply. Shadow inventory, also known as pending supply, refers to the number of distressed properties that are seriously delinquent, in foreclosure, and held as real-estate owned by mortgage servicers but are not currently listed. Mark Fleming, chief economist for CoreLogic, said shadow inventory has fallen 28 percent since peaking at 2.1 million units in January 2010. The decreasing number of non-listed distressed properties is a good sign for the housing market because it relieves downward pressure on home prices. The four-month supply of shadow inventory is the lowest level in nearly three years. More here.
Estimates released by the U.S. Department of Housing and Urban Development and the U.S. Department of Commerce show sales of newly built single-family homes at a seasonally adjusted annual rate of 369,000 in May. That is 7.6 percent above the revised April rate and nearly 20 percent above May 2011. The spike in sales exceeded economists’ expectations and put sales at a two-year high. The median price for a new house sold in May was $234,500; the average price was $273,900. The seasonally adjusted estimate of new houses for sale at the end of the month was 145,000. That represents a 4.7-month supply at the current sales rate. More here and here.
According to the National Association of Realtors, sales of existing homes fell 1.5 percent in May but remain 9.6 percent above last year’s pace. Existing-home sales include single-family, townhomes, condominiums, and co-ops. Lawrence Yun, NAR’s chief economist, said home sales have moved markedly higher with 11 consecutive months of gains over the same month a year earlier. Yun believes the month-over-month dip was the result of inventory shortage rather than a lack of demand. Listed inventory is 20.4 percent below last year’s level and, at the current sales pace, there is just a 6.6-month supply of homes for sale. The national median existing-home price rose 7.9 percent from a year ago to $182,600. Also, distressed sales continued to drop as a share of total sales. In May, distressed properties accounted for 25 percent of all existing-home sales. More here, here, and here.
According to the National Association of Home Builders Improving Markets Index, 28 new entrants made the list in June and 31 states now have at least one metropolitan area represented. Despite the gains in regional diversity, however, the total number of improved housing markets fell to 80 from 100 in May. The index lists housing markets that have shown improvement for at least six straight months in housing permits, employment, and home prices. David Crowe, NAHB’s chief economist, said the shifting of markets on and off the list underscores the fragility that remains in the market. But, according to Crowe, the fact that multiple new areas are added to the list each month is encouraging. In June, 52 metros held their spot on the list and 48 dropped off. More here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, total mortgage application volume fell 0.8 percent last week after surging 18.0 percent the week before. The Refinance Index was up 1.0 percent from a week earlier while the Purchase Index dropped 9.0 percent from the previous week. Michael Fratantoni, MBA’s vice president of research and economics, said refinance volume increased again but the composition of the activity changed significantly. Demand for conventional and HARP refinance applications both decreased last week but FHA applications reached an all-time high. The refinance share of total mortgage activity was also up, reaching 81 percent from 79 percent the week before. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 3.87 percent from 3.88 percent. The average 30-year rate for jumbo loans was 4.06 percent. More here and here.
The U.S. Census Bureau and the Department of Housing and Urban Development released their new residential construction report for May 2012. According to the data, housing starts are up 28.5 percent above last year’s level but down 4.8 percent from April’s revised rate. The drop, mainly due to declines in multifamily construction, masks a 3.2 percent improvement in single-family housing starts from the month before. Building permits also rose, climbing 7.9 percent above April’s rate and 25.0 percent over May 2011. Permits to build single-family homes increased 4.0 percent in May. More here and here.
Though builder confidence rose just one point in June, it is now at its highest level since May of 2007. The National Association of Home Builders Housing Market Index measures builders’ perceptions of the market for newly built, single-family homes on a scale where any number above 50 indicates that more builders view market conditions as good than poor. In June, the index reached 29. Barry Rutenberg, NAHB’s chairman, said the month’s modest uptick comes after a four point increase in May and is reflective of the continued, gradual improvement in many individual housing markets. The component measuring current sales conditions was up two points in June, while gauges of traffic and expectations for the next six months were unchanged. Regionally, the Midwest and West each posted significant gains. The South and Northeast each lost two points from the previous month. More here and here.
Gallup’s Economic Confidence Index, which began daily tracking in January of 2008, measures Americans’ confidence in current economic conditions and their expectations for the economy’s performance going forward. In May, the index recorded its highest monthly average since tracking began. Confidence rose 3.0 percent from April, which was the best month-over-month improvement since February. The gains indicate Americans’ perception of the economy continues to improve and, though the survey was conducted prior to an uptick in the unemployment rate, follow-up polling shows confidence levels held steady following the report. According to the results, 42 percent of Americans say the economy is improving and 16 percent say it is in excellent or good shape. More here.