Last week, economic confidence experienced its greatest one-week improvement since Gallup began daily tracking in January 2008. Gallup’s index posted an 11-point spike in confidence, nearing a high for the year and ending an extended period where the index reflected Americans’ uncertainty about the economy. The gains coincide with a University of Michigan Surveys of Consumers report showing an uptick in consumer confidence in August. But, though consumers’ attitudes about their present financial situation improved, their outlook on the future and expectation of wage gains were unchanged. Many respondents cited reductions in outstanding debt, rather than increasing income, as the reason for their improved financial standing. More here and here.
According to the Mortgage Bankers Association’s Weekly Application Survey, demand for mortgage loans surged last week from the week before. The Market Composite Index, which measures both refinance and purchase activity, was up 11.1 percent due to a 12 percent increase in the Refinance Index and an 8.0 percent jump in the Purchase Index. Last week’s results include the customary upward adjustment for the Labor Day holiday, however, which may overstate the level of refinance applications because lenders who rely heavily on online applications saw little or no decline due to the holiday. Still, the average contract interest rate for 30-year fixed-rate mortgages dropped to 3.75 percent last week from 3.78 percent the week before. And the refinance share of all mortgage activity climbed to 80 percent from 79 percent the previous week. More here and here.
The National Association of Home Builders Improving Markets Index lists metropolitan areas that have shown six consecutive months of improvement in housing permits, employment, and home prices. In September, the index reached a total of 99, up 19 over August’s total of 80. Barry Rutenberg, chairman of the NAHB, said the growth is an encouraging sign that housing continues on a slow but steady recovery path that is advancing from one local market to the next. The list now includes metros in 33 states and the District of Columbia. New markets added to the index include Tucson, Ariz.; Jacksonville, Fla.; Springfield, Ill.; Greenville, N.C.; and Bend, Ore. Only 12 cities fell off the list from the previous month, while 68 retained their spots and 31 new metros were added. More here and here.
The results of Fannie Mae’s August 2012 National Housing Survey show Americans are uncertain about the direction of the economy but are optimistic about the housing market. According to the latest survey, which polled 1,001 Americans to assesses their attitudes toward the economy, housing, and consumer confidence, fewer respondents feel the economy is on the right track, with just 33 percent saying its headed in the right direction. But despite the decreasing number of Americans expressing confidence in current economic conditions, an increasing number of participants see positive trends in housing data. Among the survey’s highlights, just 11 percent of respondents said they expect home prices to fall over the next year, the lowest level ever recorded. Also, a majority of Americans said now is a good time to buy a home and 18 percent said it was a good time to sell, the highest percentage recorded since the survey began in 2010. Doug Duncan, Fannie Mae’s chief economist, said consumer attitudes toward the housing market remain modestly positive despite the muted economic recovery. More here and here.
The amount of time it takes to sell a home has fallen dramatically over the past year, according to new estimates. In July, the median amount of time a home was on the market was 69 days, which is 29.6 percent below last year when it was 98 days. The data, released by the National Association of Realtors, shows that one third of the homes sold in July were on the market for less than a month. Lawrence Yun, NAR’s chief economist, said tightening inventory has caused homes to sell more quickly. Yun says the trend began in the spring and is supporting sustained price growth in markets around the country. At the current sales pace, there was a 6.4-month supply of homes for sale on the market in July, a 31.2 percent drop from last year. More here and here.
Trulia’s Price Monitor measures asking price, rather than sales price, in order to provide the most current information on housing market trends and home values. In August, prices posted their seventh straight monthly increase and a 2.3 percent year-over-year gain. The improvement over last year was the biggest since the recession and, excluding foreclosures, equaled a nearly 4.0 percent increase in home prices. According to the report, prices rose in 68 of the country’s 100 largest metropolitan areas, with the largest increases occurring in Phoenix, Tucson, and Las Vegas. Jed Kolko, Trulia’s chief economist, said asking prices rose faster than at any time since the recession in August and, excluding foreclosures, are now rising faster than wages. More here and here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from the week before. But, despite decreasing rates, mortgage application volume also decreased last week. The Market Composite Index, which measures total mortgage loan application volume, dropped 2.5 percent due to a 3.0 percent decline in the Refinance Index and a 0.8 percent slide in purchase activity. The slowdown came as the average contract interest rate for 30-year fixed-rate mortgages fell to 3.78 percent from 3.80 percent the previous week. Average mortgage rates also fell for jumbo and FHA loans. The refinance share of total mortgage activity held steady from the week before at 79 percent. More here and here.
The latest 2012 Economic and Housing Outlook from National Association of Realtors’ chief economist Lawrence Yun calls for modest economic growth and continued improvement for the housing market. Yun’s forecast says, though real GDP growth was 1.5 percent in the second quarter, it will grow at near 2.0 percent for the rest of the year. And though that is still below the historical norm of 3.0 percent a year, it is an improvement over 2011. Housing starts are forecast to rise by 27 percent this year, with a jump of nearly 50 percent in 2013. Yun also expects continued gains for both new and existing home sales. So far this year, existing home sales have been nearly 8.0 percent above last year, while new home sales are up nearly 20 percent. According to the NAR’s expectations, new home sales will hit 600,000 by 2013 and existing home sales will rise to nearly 5 million next year. The forecast also calls for a continued decline in distressed properties and increasing median home prices. More here.
RealtyTrac’s Q2 2012 U.S. Foreclosure Sales Report found foreclosure-related sales fell in the second quarter. Sales of homes in some stage of foreclosure accounted for 23 percent of all residential sales, up from 22 percent in the first quarter. But though they increased as a share of total sales, the number of foreclosure-related sales was actually down, falling 12 percent from the previous quarter and 22 percent from the year before. It was the first annual decrease in foreclosure sales following five quarters of increases. Prices, on the other hand, rose 6.0 percent from the previous quarter and 7.0 percent from year-before levels due to fewer foreclosures on the market. It was the first annual increase in average price since 2010 and the largest increase since 2006. Daren Blomquist, RealtyTrac’s vice president, said given the shortage of supply and strong buyer demand in the second quarter, it’s no surprise that the average price rose on both a quarterly and annual basis. More here.