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Pending Home Sales Improve in September

October 25, 2012 By

Daily Real Estate News | Thursday, October 25, 2012

Pending home sales were little changed in September but remain well above a year ago, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, edged up 0.3 percent to 99.5 in September from 99.2 in August and is 14.5 percent above September 2011 when it was 86.9. The data reflect contracts but not closings.

Lawrence Yun, NAR chief economist, said pending home sales continue to hold a higher ground. “Home contract activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range,” he said. “This means only minor movement is likely in near-term existing-home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013.”

Pending home sales have risen for 17 consecutive months on a year-over-year basis, leading to the solid recovery seen in closed existing-home sales this year. In September all regions were showing double-digit increases in contract activity from a year ago with the exception of the West, which is constrained by limited inventory.

The PHSI in the Northeast rose 1.4 percent to 79.3 in September and is 26.1 percent higher than a year ago. In the Midwest the index fell 5.8 percent to 89.5 in September but is 19.3 percent above September 2011. Pending home sales in the South increased 1.0 percent to an index of 111.5 in September and are 17.6 percent higher than a year ago. In the West, the index rose 4.3 percent in September to 106.9, but is only 0.8 percent above September 2011.

Housing affordability conditions are forecast to remain favorable through next year, with the 30-year fixed-rate mortgage staying near record lows for the balance of this year but gradually rising to 4 percent in the second half of 2013.

Completed existing-home sales in 2012 will total close to 4.6 million, an increase of 9 percent, and are projected to rise about 9 percent next year to nearly 5.1 million. With notably lower housing inventory, the national median existing-home price is expected to increase 6 percent this year and 5 percent in 2013.

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Inventory of For-Sale Homes Falls 20% From Year Ago

June 13, 2012 By
Daily Real Estate News | Wednesday, June 13, 2012

The number of homes on the market continues to become a shrinking pool. Inventory of for-sale single-family homes, condos, townhomes, and co-ops dropped 20 percent in May compared to year-ago levels, according to data from REALTOR.com of 146 markets.

Inventories in May declined in all but two — Philadelphia and Shreveport-Bossier City, La. — of the 146 markets tracked by Realtor.com.

While inventories were on the decline, the median national list price was on the rise, inching up 3.17 percent in May compared to May 2011.

“These key indicators continue to suggest that the housing market is steadily moving along a path of stabilization and gradual recovery,” Realtor.com notes.

12 Markets Where Inventories Have Dropped the Most

California metro areas are seeing some of the largest drops in inventories of for-sale homes.

From May 2011 to May of this year, the following metro areas have posted the highest drops in the country with their housing inventories, with inventories falling 35 percent or more in the last year. Those metros are:

  1. Oakland, Calif.: -56.60%
  2. Fresno, Calif.: -48.76%
  3. Bakersfield, Calif.: -48.59%
  4. Phoenix-Mesa, Ariz.: -44.71%
  5. Seattle-Bellevue-Everett, Wash.: -42.65%
  6. San Jose, Calif.: -40.80%
  7. Tampa-St. Petersburg-Clearwater, Fla.: –39.76%
  8. Stockton-Lodi, Calif.: -39.25%
  9. Atlanta: -39.19%
  10. San Francisco: -38.90%
  11. Riverside-San Bernardino, Calif.: -37.43%
  12. Sacramento: -35.92%

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

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FHA Hopes Bulk Sales Will Curb Foreclosures

June 11, 2012 By
Daily Real Estate News | Monday, June 11, 2012

The Federal Housing Administration announced it will begin selling off distressed mortgages in bulk, which may help prevent foreclosures for thousands of home owners. Beginning in September, FHA says it hopes to sell 5,000 mortgages each quarter.

The move will also help the FHA get rid of some of the 700,000 or so seriously delinquent mortgages that it holds. Many of those delinquent loans originated from 2007 and 2009, the height of the housing crisis.

Housing Secretary Shaun Donovan says there may be a greater opportunity for investors to buy the troubled loans and either reduce the principal on the loans or offer rent-to-own plans, thereby keeping more home owners in their homes.

Home owners whose loans are sold might one day get a call from someone saying “‘Hey, we’re willing to cut your payment dramatically, or cut the balance on your loan dramatically,” Donovan said. “There are going to be a set of options that might arrive on that doorstep as the best news that home owner has ever heard.”

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Short-Sale Process Expected to Speed Up in June

May 29, 2012 By
Daily Real Estate News | Tuesday, May 29, 2012

The short-sale process is expected to get shorter starting June 15. New guidelines issued under the Federal Housing Finance Agency will require Fannie Mae and Freddie Mac to give home buyers of short sales notice of their final decision within 60 days. The new guidelines also will require the mortgage giants to respond to initial short-sale requests within 30 days of receiving an offer from a potential buyer.

The speedier process is expected to be a boost to the housing market, Michael McHugh, president of the Empire State Mortgage Bankers Association, told the New York Times. Home buyers and sellers often have to wait months before they receive a decision from a lender on an offer for a short sale. Some deals fall apart just from the long wait alone.

Short sales have been increasing in recent months, as many lenders find them more appealing than foreclosures, which can be much more costly and take longer to remove from their books.

Short sales now outpace foreclosure sales in many parts of the country. Short sales represent more than 14 percent of existing-home sales, according to CoreLogic housing data from March, the most recent month available.

McHugh says that a faster short-sale process may be particularly helpful in speeding the recovery in judicial states, where foreclosures must go through the courts before they are approved. For example, in New York, judicial foreclosures can take a year or longer to be approved. Now short sales may be viewed by defaulting home owners as more of an option in avoiding foreclosure.

“There should be a significant improvement in the turnaround,” McHugh said regarding housing markets with judicial foreclosure processes.

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Market Stabilizing? Home Inventories Fall by Nearly 20%

May 25, 2012 By
Daily Real Estate News | Friday, May 25, 2012

Home inventories of for-sale listings continue to fall, which may help raise overall housing prices as demand picks up.

Inventory of for-sale single-family homes, condos, townhouses, and co-ops dropped by 18.85 percent in April compared to a year ago, according to housing data of 146 metro markets tracked by REALTOR.com.

“These key indicators continue to suggest the housing market may be at a turning point and headed towards a broad-based recovery,” REALTOR.com notes in a release on its April housing data. “Lower inventories, combined with faster moving markets and relatively stable median listing prices are indicative of the kind of balanced housing market that has not been seen in many years.”

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Home Prices Begin to Bounce Back

May 24, 2012 By
Daily Real Estate News | Thursday, May 24, 2012

The Federal Housing Finance Agency reported that nationwide home prices posted their first gain in the first quarter since 2007. While the gain was modest at 0.6 percent, housing experts note it’s still another sign that the housing market is gaining momentum.

FHFA’s housing price index is calculated using home sales price information based off Freddie Mac and Fannie Mae-backed mortgages.

FHFA’s seasonally adjusted monthly index rose 1.8 percent in March over February, which is the largest monthly increase in at least 20 years. Year-over-year, home prices increased 2.7 percent, FHFA reports.

“Increased affordability and a somewhat smaller inventory of homes for sale are positively impacting house prices,” says Andrew Leventis, FHFA’s principal economist.

Price increases were the highest in Hawaii with a 10.3 percent increase, and in Washington, D.C., which saw a 9.8 percent gain, according to FHFA.

Still, Number of Underwater Home Owners Remain High

Despite recent improvements in home prices, the percentage of underwater borrowers has shown little improvement in the last year. More than 30 percent of home owners in the first quarter remained underwater on their mortgage, owing more on their home than it’s currently worth, according to a new Zillow housing report.

A year ago, 32.4 percent of all borrowers had negative equity on their loan compared to 31.4 percent during the most recent quarter, Zillow reports.

Yet, Zillow notes that nine out of 10 underwater borrowers are current on their mortgage payments.

“[It's] important to note that negative equity remains only a paper loss for the vast majority of underwater home owners,” says Stan Humphries, Zillow’s chief economist. “As home values slowly increase and these home owners continue to pay down their principal, they will surface again.”

The highest share of underwater home owners continues to be in Las Vegas, where 71 percent of home owners are underwater, followed by Phoenix (at 55.5 percent) and Atlanta (at 55.2 percent), according to the Zillow housing report.

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Apartment, Condo Market Heats Up

March 9, 2012 By
Daily Real Estate News | Friday, March 09, 2012

For the sixth consecutive quarter, the apartment and condo housing market continued to show signs of improvement.

The Multifamily Production Index, released by the National Association of Home Builders, measures builder and developer sentiment about current market conditions in the sector. The index reached 48.9 in the fourth quarter — out of a scale up to 100 — and reached its highest reading since the fourth quarter of 2005.

“The apartment and condo sector continues to be a bright spot in the housing market, with the overall index at its highest level in six years,” says David Crowe, NAHB’s chief economist. “The rental components have been the driving force behind the increased index level. And although the for-sale component remains weaker, it is still double what it was just six quarters ago.”

Still, the improvements are met with caution. Builders warn about the ongoing difficulty developers have faced in obtaining credit to finance development of new apartments as a major roadblock.

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