The National Association of Realtors’ Pending Home Sales Index is a forward-looking indicator that measures the number of signed contracts that occur each month. In July, the index rose 2.4 percent, reaching a two-year high and climbing 12.4 percent over year-before levels. Lawrence Yun, NAR’s chief economist, said the index is now at its highest level since April 2010 and, though month-to-month movement has been uneven, there have been 15 consecutive months of year-over-year gains in contract activity. Regionally, pending sales were up across the country, with double-digit improvements in the Northeast, Midwest, and South over last year’s estimates. The NAR projects existing-home sales will rise between 8.0 and 9.0 percent this year, with an additional 7.0 or 8.0 percent improvement in 2013. More here and here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, the seasonally adjusted Purchase Index increased more than 1.0 percent last week. But despite the improvement in demand for home purchase loans, the Market Composite Index, which measures both purchase and refinance application volume, was down 4.3 percent due to a 6.0 percent slide in the Refinance Index. The refinance share of total mortgage activity also fell, dropping to 79 percent from 80 percent the previous week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 3.80 percent from 3.86 percent the week before. The average rate for jumbo loans also declined, dropping to 4.06 percent. More here and here.
The majority of metropolitan areas covered by Zillow’s Home Value Index saw increasing home prices in July. Of the 167 areas included, 62 percent experienced price increases from the month before, with Phoenix seeing the largest spike in values. Nationally, prices were up 0.5 percent month-over-month and 1.2 percent from last year. Dr. Stan Humphries, Zillow’s chief economist, said the housing market continues to heal, as tighter inventory levels have led to the eighth consecutive month of improved home prices. According to Humphries, prices will likely soften a bit in the fall, as rising values will lift some would-be sellers out of negative equity allowing them to put their home up for sale. Also in the report, the number of foreclosures declined in July with just 5.7 out of every 10,000 homes being foreclosed, down from 6.5 the previous month. More here.
Freddie Mac’s August 2012 U.S. Economic & Housing Market Outlook examines the so-called shadow inventory and whether there are a significant number of distressed properties soon to hit the market and erase recent price gains. The concern over the shadow inventory stems from the theory that there are a large number of these soon to be foreclosed properties that will eventually flood the market and send home prices tumbling downward. But, though there is evidence of some excess inventory, the number is far less severe than it has been. According to Freddie Mac’s chief economist Frank Nothaft, much of the shadow inventory has been absorbed over the past few years as fewer new homes were being built and household formation was rising. Now with rental markets in balance and continuing shrinkage of the vacant housing stock, Nothaft believes improvements in home prices are stable and the recovery may be strengthening. According to the Mortgage Bankers Association’s National Delinquency Survey, the number of seriously delinquent loans has fallen by nearly 1.4 million since its peak in 2009. More here.
The U.S. Census Bureau and the Department of Housing and Urban Development released their new home sales estimates for July. According to the data, sales of newly built single-family homes rose 3.6 percent to a seasonally adjusted annual rate of 372,000. June’s rate was was revised upward to 359,000. New home sales are now 25.3 percent higher than they were a year ago, further evidence of improvement in the market and gaining consumer confidence. The median sales price of new homes sold in July was $224,200; the average price was $263,200. At the current sales pace, there was a 4.6-month supply of new houses available for sale at the end of July. More here and here.
Sales of previously owned homes increased 2.3 percent to a seasonally adjusted annual rate of 4.47 million in July, according to the National Association of Realtors. The improvement over June’s rate of 4.37 million put existing-home sales 10.4 percent above last year’s levels. Lawrence Yun, NAR’s chief economist, said record-low mortgage rates and rising rents are helping to unleash pent-up demand. Still, Yun feels the market would be performing even better if not for weakness in the broader economy and labor market, increasing home prices, and shrinking inventory. The national median existing-home price for all housing types is now $187,300, 9.4 percent above a year ago. The increase marks the fifth consecutive month of year-over-year price gains and the strongest monthly improvement since January 2006. Also, one third of homes purchased in July were on the market for less than a month. More here and here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, refinance activity fell last week as average mortgage rates increased. The Market Composite Index, which measures both refinance and purchase activity, fell 7.4 percent from the week before, largely due to a 9.0 percent drop in the Refinance Index. Purchase application volume, on the other hand, was up slightly, rising 0.9 percent. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances moved up to 3.86 percent from 3.76 percent a week earlier. Still, mortgage rates remain near historic lows. Also in this week’s survey, the investor share of home purchase applications rose to 5.7 percent in the month of July and the share of purchase mortgages for second homes increased to 5.8 percent from 5.6 percent in June. More here and here.
Since Realtor.com began keeping record of monthly for-sale inventory in 2007, the number of homes on the market has fallen nearly 40 percent. In fact, the total number of homes for sale across the country in July was 1.866 million units, a historic low and a 19.25 percent drop from one year ago. Falling inventory is usually a positive sign that housing is in recovery, as fewer homes for sale means rising prices and less time on the market. In July, the median number of days on the market among houses for sale was 88 days, 9.27 percent below last year. According to the report, the decline is consistent with other data showing significant improvement in market conditions compared to one year ago. More here.
Nearly 74 percent of all new and existing homes sold during the second quarter of this year were affordable to a family earning the national median income of $65,000, according to the National Association of Home Builders Housing Opportunity Index. But though that’s high by historical standards, it’s down from a record 77.5 percent of homes during the first quarter. Barry Rutenberg, NAHB’s chairman, said the decline in affordability is a positive development because it’s another signal that the housing recovery is taking root, which should lend confidence to buyers and sellers in the current market. In 92 percent of the metros covered by the index, prices were up from the first quarter of this year. The most affordable major housing markets during the second quarter included Youngstown and Dayton, Ohio; Buffalo, N.Y.; Indianapolis, Ind.; and Modesto, Calif. More here and here.
The latest estimates from the U.S. Census Bureau and the Department of Housing and Urban Development show permits to build privately-owned housing units reached a four-year high in July. Building permits rose 6.8 percent from June’s rate of 760,000 to a seasonally adjusted annual rate of 812,000, which is nearly 30 percent higher than they were a year earlier. Permits to build single-family homes increased 4.5 percent. Construction of new homes and apartments, on the other hand, slipped in July. Housing starts fell 1.1 percent after rising nearly 7.0 percent the month before. Despite the drop, housing starts remain 21.5 percent above year-ago levels. More here and here.