Time On Market Falls As Inventory Tightens

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.

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August Asking Prices Rise At Fastest Pace Since Recession

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.

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Average Mortgage Rates Fall In Latest Survey

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.

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Economic Outlook Calls For Housing Growth And Improvement

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.

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Foreclosure Sales Fall, Prices Climb In Second Quarter

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.

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Pending Home Sales At Two Year High In July

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.

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Home Purchase Demand Rises As Rates Fall

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.

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Index Finds Eighth Consecutive Month Of Improved Home Values

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.

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Shadow Inventory Levels Greatly Improved Since Peak

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.

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New Home Sales 25 Percent Higher Than Last Year

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.

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