The National Association of Home Builders’ Improving Markets Index identifies metropolitan areas that have shown six consecutive months of improvement in housing permits, employment, and home prices. In July, the index rose by four to include 84 metropolitan areas. The list now includes markets in 32 states and the District of Columbia. Barry Rutenberg, NAHB’s chairman, said the geographic diversity and growing number of cities on the list highlight the recent improvements in home prices and job market conditions across certain parts of the country. July’s index includes 73 metros that retained their spot from the month before and 11 new entries, including Prescott, Ariz.; Springfield, Mass.; St. Cloud, Minn.; and Houston, Texas. More here.
Gallup’s Job Creation Index polls American workers about whether or not their workplace is expanding or reducing the size of its workforce. In June, the index rose one point from May, continuing to hover near its highest level since mid-2008. Among U.S. workers, 36 percent said their employers are hiring and expanding the size of their workforce, while just 16 percent said their employers were reducing the size of their workforce. Regionally, hiring was strongest in the Midwest. Also, private-sector employment has experienced significant improvement since reaching its low in February 2009. Private sector hiring now exceeds levels seen in August 2008, before the financial crisis began. More here.
The Demand Institute is a non-profit organization that studies consumer demand. Their latest report, titled The Shifting Nature of U.S. Housing Demand, says the housing market has turned a corner and the recovery has begun. But while the report sees positive signs for housing’s future, it also says that this recovery will be unlike previous recoveries. According to the report, demand for rental properties will lead the recovery and help clear some of the inventory of existing homes for sale. But despite short-term demand for rental properties, the vast majority of Americans still say buying a home is the best long-term investment they can make and more than 70 percent of those intending to move in the next three to five years say they plan to purchase a home. The Demand Institute believes initial demand for rental properties will help clear inventory but won’t affect the homeownership rate in the long term. The report also calls for home prices to increase one percent during the second half of this year and post gradual improvements each year following, reaching annual increases of three to four percent by 2015. More here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, the Market Composite Index, which measures both refinance and purchase loan application volume, fell 2.1 percent last week. But, though the Refinance Index suffered a 3.0 percent decline from the previous week’s levels, the seasonally adjusted Purchase Index increased by the same amount, gaining 3.0 percent from the week before. Mortgage rates, on the other hand, hit new all-time lows. The average contract interest rate for 30-year, fixed-rate mortgages with conforming loan balances fell to 3.79 percent from 3.86 percent. In June, the average loan size for home purchase was $240,897. Last week’s results contain an adjustment for the Fourth of July holiday. More here.
The most recent results from Trulia’s Price Monitor show asking prices on for-sale homes rose for the fourth time in five months in June. Prices increased 0.3 percent month-over-month, after staying relatively flat in May. Year-over-year, prices were up 0.3 percent and, excluding foreclosures, home values rose 1.7 percent. Nearly half of the nation’s largest metropolitan areas saw price increases over last year and 84 out of 100 experienced increases over the previous quarter. At the same time, Trulia’s Rent Monitor found rent increases outpacing asking-price gains in 22 of the 25 largest rental markets. Rental prices were 5.4 percent higher in June than they were a year earlier. Rising rents are a key factor in the housing market’s recovery. Increasing rental costs may make homeownership more attractive to prospective buyers, especially since mortgage rates are at all-time lows and affordability is higher than its been in decades. More here, here, and here.
The U.S. Department of Housing and Urban Development and the U.S. Department of the Treasury’s June Housing Scorecard is a comprehensive report on the housing market which compiles and analyzes key data and measures the administration’s foreclosure prevention and recovery programs. Among the findings in the June report, home equity rose 7.4 percent in the first quarter of 2012. The increase brought home equity levels to their highest point since the second quarter of 2010. Also, sales of previously owned and newly built homes both posted gains in May and inventory is at its lowest level in years. Despite the improvements, however, foreclosure starts and completions also rose, which indicates some continued fragility in the market. Also, 86 percent of homeowners entering the administration’s HAMP program in the last 23 months have received a permanent mortgage modification. To date, one million homeowners have received a HAMP modification. More here and here.
Several housing market experts, including the National Association of Realtors’ Lawrence Yun, Zillow’s Stan Humphries, and the National Association of Home Builders’ David Crowe, recently spoke at a forum hosted by the National Association of Real Estate Editors. They forecast continuing improvement for the nation’s real estate markets, though they expect that improvement to be gradual. Among their predictions, Yun said some markets may experience a 10 percent rise in home prices and he expects distressed sales to drop by 25 percent this year. The NAHB calls for a nearly 20 percent increase in housing starts and Humphries says rising rents will ultimately lead consumers back to the housing market as homeownership becomes attractive to Americans once again. More here and here.
Fannie Mae’s most recent Economic & Strategic Research Group says moderate growth is expected for the remainder of the year despite a recent slowing of economic gains. Doug Duncan, Fannie Mae’s chief economist, says the resilience of the economy and the consumers in particular that has been demonstrated over the past few years will persist, despite threats to the economy such as the European debt crisis. The Group says the housing market has performed relatively well in the current environment with home sales up 8.0 percent year-over-year and the main measures of home prices firming over recent months. Consumers are the key, according to their analysis. Fannie Mae projects growth to come in at 2.2 percent this year. More here.
CoreLogic’s most recent National Foreclosure Report shows 63,000 foreclosures were completed in May, down from 77,000 a year ago and 27 percent below their peak in 2010. Mark Fleming, CoreLogic’s chief economist, said there have been more than 819,000 completed foreclosures over the past year or an average of 2,440 foreclosures completed each day. But though the number of completed foreclosures is dropping, the overall level remains high. There have been nearly 3.6 million foreclosures completed across the country since the financial crisis began in 2008. Still, the national foreclosure inventory holds steady at around 1.4 million homes. Also, the report says the five states with the highest number of completed foreclosures over the past year account for nearly 50 percent of the national total. More here and here.
The Joint Center for Housing Studies of Harvard University recently released their annual State Of the Nation’s Housing report. According to the report, there are several signs which indicate future gains for the market. Among them, the report cites strengthening rental markets, increasing home sales, and improved stability. Eric S. Belsky, managing director of the Joint Center for Housing Studies, said with rents up, home prices down, and mortgages rates at record lows, monthly mortgage costs relative to rent haven’t been this favorable since the early 1970s. Belsky also believes that unless the broader economy goes into a tailspin, stronger sales, lower inventory, and stabilizing prices should pave the way for a pickup in single-family housing construction. The report cautions that we’re still in the early stages of the housing recovery and a number of challenges remain but is optimistic about the market’s prospects. More here.