Home Prices Slip In Third Quarter

The Federal Housing Finance Agency House Price Index was 1.6 percent lower in the third quarter than the second quarter of 2010. Monthly prices were down 0.7 percent in September, and 3.4 percent below the year before. The index, calculated from mortgages acquired by Fannie Mae and Freddie Mac, shows prices down a total of 8.4 percent over the past five years. The Standard & Poor’s Case-Shiller Home Price Index also shows prices falling in the third quarter, dropping 2.0 percent after increases in four of the previous five quarters. Still, the 20-city composite index was up 0.6 percent in September from a year earlier and the 10-city composite rose 1.6 percent. More here, here, here and here.

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Americans Cautiously Optimistic About Housing

According to The Third Quarter 2010 Fannie Mae National Housing Survey, 68 percent of Americans think now is a good time to buy a home. The survey, meant to assess Americans’ confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy, also found that 25 percent of respondents think home prices will rise in the next year and 66 percent think buying a home is a safe investment. Overall, respondents were cautiously optimistic about their personal finances with as many expecting them to improve as those that expect their finances to remain the same. More here and here.

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New Home Sales Drop in October

According to The U.S. Census Bureau and the Department of Housing and Urban Development, sales of new single-family homes fell 8.1 percent in October. Though economists expected an increase, sales fell from September’s revised rate, putting them 28.5 percent below last year’s levels. The median sales price of new houses sold in October was $194,900; the average price was $248,200. There were an estimated 202,000 new homes listed for sale at the end of October. At the current sales pace, that represents a supply of 8.6 months. More here and here.

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Loan Demand Highest in 6 Months

According to The Mortgage Bankers Association’s Weekly Applications Survey, demand for purchase applications surged 14.4 percent last week, the highest level since the week ending May 7. Michael Fratantoni, MBA’s vice president of research and economics, said the increase aligns with other data suggesting consumers are feeling more confident with their financial situation. The Refinance Index, though, was down 1.0 percent from the previous week. The Market Composite Index, which measures total loan application volume, was up 2.1 percent. More here and here.

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Existing Home Sales Fall After Two Months of Gains

Sales of previously owned homes fell 2.2 percent in October, according to a report from The National Association of Realtors. Existing home sales, which include single-family, townhomes, condominiums, and co-ops, declined after two months of increases, putting them 25.9 percent below last year’s level when sales were elevated by the home buyer tax credit. Lawrence Yun, NAR’s chief economist, said sales activity, though affected by temporary foreclosure stoppage in some states, is clearly off the bottom and attempting to settle into sustainable levels. The national median existing-home price for all housing types was $170,500, down just 0.9 percent from October 2009. More here and here.

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Housing Inventory Down In October

The number of single-family homes, condominiums, and townhouses listed for sale dropped 3.3 percent in October compared to the month before. Inventory fell in 22 of the 26 major metropolitan areas surveyed by real-estate brokerage firm ZipRealty. Typically, October sees a slight increase in inventory, as sellers try to beat the seasonal sales downturn. Despite the decrease, inventory was up 13 percent over last year, when home sales were boosted by the home buyer tax credit. Data here. More here.

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Future Brightening For New Home Sales

David Crowe, the National Association of Home Builders’ chief economist, says builder optimism is on the rise because the level of new homes for sale is the lowest in 42 years and, even a slight improvement in the economy, will lead to a rise in demand.

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Building Permits Up, Housing Starts Down

Building permits for privately-owned housing units and single-family homes were both up in October, according to The U.S. Census Bureau and the Department of Housing and Urban Development. Single-family authorizations were up 1.0 percent from the month before and privately-owned housing units rose 0.5 percent. Though the permit data suggests future improvements for construction, housing starts during the month of October fell 11.7 percent to their lowest level since April 2009. The drop was driven by a 43.5 percent decrease in multifamily construction. Single-family housing starts were down just 1.1 percent. More here and here.

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Loan Demand Falls As Mortgage Rates Rise

According to The Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages jumped from 4.28 percent to 4.46 percent last week. Michael Fratantoni, MBA’s vice president of research and economics, said the rate increase was due to stronger economic data and uncertainty about the impact of the Federal Reserve’s latest purchase of Treasury securities. Because of the increase in mortgage rates, the Refinance Index dropped 16.5 percent and the Purchase Index was down 5.0 percent. More here and here.

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A Brighter Forecast for Housing in 2011

The National Association of Realtors’ chief economist Lawrence Yun says the housing market has regained stability and expects further gains in 2011. Pointing to positive trends in the overall economy, as well as housing prices, sales, and affordability, Yun predicted existing-home sales will reach 5.5 million units next year, home prices will rise 1.0 percent, and GDP will be up 2.5 percent. Consumer confidence, business spending, and job growth are the keys to continued economic growth and recovery according to Yun. Also, NAR’s U.S. Economic Outlook for October forecasts a significant increase in sales in 2011 and continued improvements for residential construction. More here and here.

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