New Home Sales Up 28 Percent From 2011

In August, sales of new single-family homes were 0.3 percent below July’s upwardly revised annual rate of 374,000, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. New home sales were at a seasonally adjusted annual rate of 373,000, which is 27.7 percent above last year’s level. But though sales were relatively flat month-over-month, median price rose significantly, climbing 11.2 percent and setting a record for the largest one-month gain. The median sales price of new houses sold during the month was $256,900; the average sales price was $295,300. Also, there was a 4.5-month supply of new homes available for sale at the end of August. More here and here.

Mortgage Demand Rises As Rates Hit Another Low

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage loan applications grew last week as rates dropped to another survey low. The Market Composite Index, which measures both refinance and purchase loan volume, increased 2.8 percent from the week before. The improvement was due to a 3.0 percent spike in the Refinance Index and a 1.0 percent jump in the Purchase Index. Refinance applications accounted for 81.2 percent of total application volume, the highest since early August. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 3.63 percent from 3.72 percent the week before. It was the lowest average mortgage rate recorded in the survey’s history. More here.

Major Price Index Posts Third Consecutive Monthly Increase

The S&P/Case-Shiller Home Price Indices are among the most closely followed measures of home values in the United States. They are intended to accurately track the price path of single-family homes in each of the included metropolitan areas. According to the latest release, which contains data through the end of July, home prices experienced their third consecutive month of increases, with gains to both the 10- and 20-City Composite Indexes. Average home prices increased 1.5 percent for the 10-City Composite and 1.6 percent for the 20-City Composite. It would have been the fourth straight month of improvement had Detroit’s prices not fallen 0.6 percent in April. David Blitzer, chairman of the index committee, said the report confirms the recent good news about housing and is reason for optimism. More here and here.

Housing Market Improvement Continues Despite Sluggish Economy

According to the most recent release from Fannie Mae’s Economic and Strategic Research Group, the housing market’s performance during the second quarter has been increasingly positive despite sluggishness in the broader economy. Home prices have begun to rise and, based on some measures, are posting their best year since 2005. Also, new home sales are up nearly 20 percent from the year before and existing home sales have improved 10 percent over the past 12 months. Doug Duncan, Fannie Mae’s chief economist, said the increasingly positive news from the housing market has compensated for some of the economy’s sluggishness. But despite year-over-year gains, the report cautions that housing activity remains below historical standards and shows signs of only modest growth through the rest of 2012. More here.

Housing Starts Now Nearly 30 Percent Above Last Year

The latest estimates from the U.S. Census Bureau and the Department of Housing and Urban Development show construction of new homes gaining ground in August. According to the report, housing starts rose 2.3 percent above July’s estimate of 733,000 and are 29.1 percent above last year’s rate of 581,000. The improvement included a 5.5 percent spike in single-family housing starts, the best pace in more than two years. Despite the gains, building permits were flat for the month. Single family authorizations were up just 0.2 percent and total authorizations were down 1.0 percent. Still, permits were 24.5 percent above the August 2011 estimate. More here and here.

Average Mortgage Rates Fall To New Survey Low

The Mortgage Bankers Association’s Weekly Mortgage Application Survey covers more than 75 percent of all U.S. retail residential mortgage applications. Last week, the report found average mortgage rates at the lowest level they’ve been since the survey began in 1990. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 3.72 percent from 3.75 percent the week before. The average rate on jumbo loan balances dropped to 3.99 percent from 4.00 percent the previous week. Despite declining rates, the Market Composite Index, which measures total loan application volume, was relatively flat, falling just 0.2 percent. The drop was due to a 4.0 percent slide in the Purchase Index. The Refinance Index rose 1.0 percent from the week before. More here and here.

Existing Home Sales Surge In August

Sales of previously owned homes spiked 7.8 percent in August, according to the National Association of Realtors. Total existing-home sales, which include single-family homes, townhomes, condominiums, and co-ops, rose to a seasonally adjusted annual rate of 4.82 million from 4.47 million in July. The gains put sales 9.3 percent higher than year-before levels and mark the sixth-straight month of improvement. Lawrence Yun, NAR’s chief economist, said the housing market is steadily recovering, with consistent increases in sales adding to the evidence that more buyers are taking advantage of excellent housing affordability conditions. The national median existing-home price for all housing types was $187,400 in August, which is 9.5 percent higher than a year ago. At the current sales pace, there was 6.1-month supply of homes available for sale at the end of August. More here and here.

Builder Confidence Rises To Highest Level Since 2006

The National Association of Home Builders Housing Market Index measures builder confidence in the market for newly built, single-family homes. The monthly survey asks builders for their perceptions of the current market, traffic of prospective buyers, and expectations for the next six months, then scores each component on a scale where any number over 50 means more builders see conditions as good than poor. In September, the index rose to 40, the highest level since June 2006 and the fifth straight month of improvement. David Crowe, NAHB’s chief economist, said builders across the country are expressing a more positive outlook and are seeing more traffic through their model homes than they have in more than five years. More here and here.

Homeownership More Affordable Than Rent In Nation's Largest Metros

After comparing the cost of renting to the price of homeownership, Trulia’s Summer 2012 Rent vs. Buy Report determined that buying a home is more affordable than renting in America’s 100 largest metropolitan areas. Closing costs, maintenance, insurance, and property taxes were among the factors included in determining the price of homeownership. The report also assumed homes would be sold after seven years. The results found buying a home is anywhere from 25 percent to 70 percent more affordable than renting in the largest cities across the country. Jed Kolko, Trulia’s chief economist, said homeownership is cheaper than renting in all of the 100 largest metros, by a wide margin. According to Kolko, rent continues to rise faster than home prices, making buying a house the more affordable choice across much of the country. More here.

Housing Affordability Rises Despite Price Increases

Recent home price reports show housing values are rising across the country. But, though price increases are good news for the economy and homeownership, they will typically have a negative affect on affordability conditions. According to the National Association of Realtors Housing Affordability Index, however, housing affordability is better this year than it was in 2011. The Index, which gauges how affordable the median-priced home is based on current family income and mortgage rate data, finds that homes are actually more affordable than they were last year, despite the price increases. Due to gains in family income and mortgage rates hovering near record lows, the median income family now earns 82 percent more than they’d need to afford the typical previously-owned home. More here.