Archive for the 'Home sales' Category
Cheaper to Buy Than Rent in 78 Percent of Major Cities
April 28th, 2011
Written by Frost Mortgage
Owning a home is more affordable than renting in 39 of the nation’s 50 most-populated cities, based on the latest quarterly rent vs. buy index from Trulia. Falling home prices and rising rents make buying cheaper in 78 percent of cities, up from 72 percent in the previous quarter; the price-to-rent ratio fell quarter-to-quarter in most of the 50 cities. Las Vegas is the top locale to buy vs. rent, followed by Phoenix; Arlington, Texas; Fresno, Calif.; Miami; Mesa, Ariz; Jacksonville, Fla.; Sacramento, Calif.; Detroit; and Omaha, Neb.
Inman News (04/28/11)
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New-Home Sales Up, But Pace Is Still Lagging
April 26th, 2011
Written by Frost Mortgage
New-home sales climbed in March after three straight months of declines, reports the Commerce Department. Sales increased 11 percent from February to an annual rate of 300,000 units, but the pace is still far short of the 700,000 units a year that economists consider healthy. Economists believe it could take years for sales to return to those levels. Commerce also reports that the median price of a new home rose nearly 3 percent from February to $213,800.
Washington Post (04/26/11) P. A12
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Economy Notches Some Gains
April 22nd, 2011
Written by Frost Mortgage
The Federal Housing Finance Agency reported that U.S. home prices declined for a fourth consecutive month in February, falling 1.6 percent from the previous month. In March, new data showed that housing starts and residential resales rebounded. Both, though, are off from a year earlier — when the property market was temporarily buoyed by a federal tax credit. The results come as initial claims for unemployment insurance fell 13,000 to 403,000 last week, based on Labor Department reports, and as the Conference Board’s index of leading economic indicators gained 0.4 percent in March.
Wall Street Journal (04/22/11) Ackerman, Andrew; Dougherty, Conor
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Existing-home sales up 3.7% in March
April 20th, 2011
Written by Frost Mortgage
Existing-home sales rose 3.7% between February and March, but still remain below year-ago levels as consumers struggle to obtain mortgage financing, the National Association of Realtors said Wednesday.
However, the homebuyers joining the market are enjoying record-low mortgage rates. NAR’s home affordability index shows the monthly mortgage principal and interest payment on a median-priced home is only 13% of gross household income, the lowest level since 1970.
“Given that FHA (Federal Housing Administration) and VA (Veterans Affairs) government-backed loan programs turned a modest profit over to the U.S. Treasury last year, and have never required a taxpayer bailout, we believe low down payment loans should continue to be available for those consumers who have demonstrated financial responsibility and are willing to stay well within their budget,” NAR President LawrenceYun said.
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Discounts Expected in Spring Housing Market
March 22nd, 2011
Written by Frost Mortgage
The National Association of Realtors reports a 9.6 percent drop in home resales in February and a decline in the median price to a nine-year low of $156,100 – which it attributes in part to poor weather, a jump in distress sales and abandoned deals due to lowball appraisals. Observers anticipate a similar trend for new homes, prompting some builders to hike discounts and broker commissions. Experts say low interest rates and bargain pricing could draw more buyers during the spring home-buying season.
Wall Street Journal (03/22/11) P. A5 Kalita, S. Mitra; Wotapka, Dawn
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Home Affordability Returns to Pre-Bubble Levels
February 9th, 2011
Written by Frost Mortgage
Data from Moody’s Analytics shows that U.S. home affordability returned to pre-bubble levels in a growing number of markets over the last year as price depreciation set the stage for a housing rebound. Of the 74 markets tracked, affordability at the end of the third quarter had either returned to or surpassed the average reached between 1989 and 2003 in 47 of those markets. At the same time, however, price drops left more borrowers owing more on their mortgage than the property is worth.
(More)
Wall Street Journal (02/09/11) Timiraos, Nick
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Housing Moving to Higher Ground in 2011
January 18th, 2011
Written by Frost Mortgage
According to a majority of economists attending the NAHB International Builders’ Show earlier this month, housing should see gradual improvements in activity in 2011 as the country’s economy and employment picture continue to improve, hopefully building momentum that will produce more considerable gains next year.
Citing job growth, NAHB chief economist David Crowe projected 575,000 single-family home starts in the year ahead — a 21 percent gain from an estimated 475,000 units started last year. Multifamily housing, poised to profit from a disproportionate number of Generation Y members moving into the housing market, could see its starts jump 16 percent in 2011 to 133,000 units and another 53 percent increase next year to 203,000 units.
RISMedia (01/18/11)
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Albuquerque’s housing market still unsettled
November 19th, 2010
Written by Frost Mortgage
The Albuquerque housing market reached a new low in October, and there are foreboding signs that it will continue falling through next spring.
Closed sales of existing homes declined 37.6 percent compared to Oct. 2009, according to the latest report from the Greater Albuquerque Association of Realtors.
Many thought the market had bottomed last year, and were surprised by the steep October drop. They now say 2009 was a false bottom, and with foreclosures on the rise, the market is heading toward its ultimate depths.
The Albuquerque metro region’s housing market has been sliding since early summer, when government subsidies …
New Mexico Business Weekly – by Steve Ginsberg
Read more: Albuquerque’s housing market still unsettled | New Mexico Business Weekly
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Home purchase loan demand up as rates hit record lows
October 6th, 2010
Written by Frost Mortgage
U.S. mortgage applications for home purchases rose for a second straight week, with demand at its highest level since early May as potential homeowners took advantage of record low interest rates, data from an industry group showed on Wednesday.
Demand for home refinancing loans, however, slumped for a fifth straight week as tight lending standards and a weak labor market prevent many homeowners from taking advantage of rock-bottom rates.
The Mortgage Bankers Association on Wednesday said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended October 1 decreased 0.2 percent. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was down 3.0 percent.
The MBA’s seasonally adjusted purchase index, a tentative early indicator of home sales, increased 9.3 percent, reaching the highest level since the week ended May 7.
Jay Brinkmann, chief economist at the MBA, said the increase in purchase activity was led by a 17.2 percent increase in Federal Housing Administration, or FHA, applications, while conventional purchase applications increased by 3.6 percent.
“One possible driver of last week’s big increase in FHA applications was a desire by borrowers to get applications in before new FHA requirements took effect October 4th, which included somewhat higher credit score and down payment requirements,” he said in a statement.
The housing market has been struggling since the April 30 expiration of popular home buyer tax credits. To take advantage of the tax credits, buyers had to sign purchase contracts by April 30. Contracts originally had to close by June 30, but that was extended by three months.
Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, said the housing market remains vulnerable to setbacks.
“Right now we are digging out of the very deep hole left behind by the first-time home buyer tax credits, which pushed sales forward, but plunged after expiration,” he said.
“Data on pending home sales has been positive, but we are still at very low levels and until we get faster growth in employment we are not going to see a housing market recovery,” he said.
The National Association of Realtors earlier this week said pending sales of previously owned U.S. homes in August rose to a four-month high.
“Excess inventory is weighing heavily on the housing market and it will take time to resolve that problem,” Gault said.
The MBA’s seasonally adjusted index of refinancing applications decreased 2.5 percent.
“We have record low interest rates, but many people cannot take advantage of them because credit is tight and many people are unemployed,” he said.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.25 percent, down 0.13 percentage point from the previous week. That is a lowest level in the survey, which has been conducted weekly since 1990.
By Julie Haviv
NEW YORK | Wed Oct 6, 2010 7:07am EDT
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Existing Home Sales Show Healthier Increase
September 24th, 2010
Written by Frost Mortgage
Existing home sales increased by 7.6 percent in August to a seasonally adjusted annual rate of 4.13 million units from an upwardly revised 3.84 million units in July (previously reported as 3.83 million units).
This remains 19.0 percent below the sales pace in August 2009. The seasonally adjusted rate of 4.13 million units is a move up from the record low recorded last month, but it is still the second-lowest in the history of these data.
Both single-family and condo and co-op home sales saw similar increases, which drove the overall sales pace. Single-family home sales rose by 7.4 percent to 3.62 million units in August from 3.37 million units in July, but remained 19.2 percent lower than the same month a year ago. Condo and co-op sales increased by 8.5 percent to 510,000 units from 470,000 units in July, 17.1 percent lower than in August 2009.
Total housing inventory in August decreased by 0.6 percent to 3.98 million existing homes for sale. The decline was driven by an 11.2 percent decrease in condos and co-ops on the market, but single-family homes for sale increased by 1.5 percent, the third straight monthly increase. This is the highest number of single-family units for sale since April.
Total housing inventory for August represents an 11.6 month supply at the current sales pace, down from 12.5 months in July. The months supply may have fallen from last month, but it remains the second-highest in the survey, with last month’s setting a record.
A parallel NAR practitioner survey showed that first-time buyers purchased 31 percent of homes in August, a decrease from 38 percent in July. The share of investor purchases rose to a 21 percent market share in August from 19 percent in July, with the remainder of the home purchases to repeat buyers. All-cash sales decreased to 28 percent in August from 30 percent in July.
Eric Fox, vice president of economics and statistical modeling with Veros Real Estate Solutions, Santa Ana, Calif., said after a series of peaks and valleys, in which home buyers seeking to take advantage of tax credits pushed up sales in the spring, which resulted in paltry sales in the summer months, existing home sales appear to be showing a more predictable level.
“We knew we were borrowing from summer sales, but when numbers plummeted in July, we still seemed shocked,” Fox said. “We got hit by a wave; now we’re on a more level surface.”
Fox said with the corrections following the tax credit, existing home sales should show “gradual” improvement, although he noted many of the 100 markets Veros follows will see a decline over the next 12 months.
“Some markets will do quite well–Texas, Louisiana, Iowa, the Dakotas–they’re very strong, with projected growth of around 2-3 percent,” Fox said. “What drives these forecasts are the unemployment rates in these areas. The national unemployment rate is 9.6 percent, but many of these states have unemployment in the 5 percent range. So where you have good employment with housing affordability, you have a better market. Also, some of these states have a lower housing inventory, so it’s a healthier market.”
By contrast, states such as Florida and Nevada continue to struggle. “In both of these states, the unemployment rate is much higher–in Las Vegas, it’s more than 13 percent,” Fox said. “There’s a huge housing inventory. Even with record affordability, many people are sitting on the sidelines, afraid that if they buy, they’ll be underwater.”
Regionally, NAR said all regions saw an increase in existing home sales from last month. Sales in the West increased by 13.8 percent in August but remain 16.1 percent lower than a year ago. Home sales in the Northeast rose by 7.9 percent in August but are 24.4 percent below August 2009. Home sales in the South increased by 5.2 percent in August but are 13.4 percent from last year. Sales in the Midwest increased by 5.0 percent in August but are 26.3 percent below a year ago.
The August numbers bring the average for the first two months of the third quarter to 3.99 million units compared to our forecast of 4.06 million units. We expect that 2010 will see about 4.76 million home sales and that is likely to stay in the 4.7 million range for 2011 as the economic recovery remains tepid.
Kan, Joel; Sorohan, Mike
(Joel Kan is director of research and business development with the Mortgage Bankers Association. He can be reached at jkan@mortgagebankers.org.)
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