Baby Boomers May Be Key To Housing Recovery

Though first-time buyers are typically the driving factor behind a healthy housing market, industry experts increasingly see baby boomers as key to the housing recovery. Affordability is at all-time highs and, because homeowners of middle age or older have generally lived in their homes longer and have built up more equity, they’re better positioned to take advantage of market conditions. In addition, repeat buyers accounted for 56 percent of the market share during the second quarter, up from 40 percent the year before. The majority of repeat buyers are over the age of 45. Also, people age 55 or older account for almost 25 percent of all new custom-home purchases. Sharon Dworkin Bell, senior vice president of the 50+ Housing Council at the National Association of Builders, says when the recovery starts, the boomer segment will be the one that moves the fastest. More here.

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Pending Home Sales Up From Last Year, Down From July

The National Association of Realtors’ Pending Home Sales Index dipped 1.2 percent in August but remained 7.7 percent above the previous year’s levels. Lawrence Yun, NAR’s chief economist, said the decline reflects an uneven market and, based on improving fundamentals, sales should be higher. Yun said we need to remove the road blocks to the housing recovery for people who are trying to take advantage of excellent affordability conditions. Pending home sales were above year ago levels in all regions and up month-over-month in the South, where the index rose 2.6 percent. More here.

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Mortgage Application Demand Surges As Rates Fall

According to The Mortgage Bankers Association’s Weekly Applications Survey, the Market Composite Index, which measures total mortgage loan demand, increased 9.3 percent last week from the week before. The Refinance Index was up 11.2 percent and the Purchase Index gained 2.6 percent. Mike Fratantoni, MBA’s vice president of research and economics, said refinance application volume was at its highest level since April 19, due, in part, to a drop in mortgage rates. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 4.25 percent from 4.29 percent the week before. The 30-year rate for jumbo loan balances dropped to 4.51 percent. The average loan size for home purchase was $212,700 in August, up from $211,200 the previous month. More here.

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Home Prices Rise For Fourth Consecutive Month

The S&P/Case-Shiller Home Price Indices though July 2011 showed its fourth consecutive month of increases, with both the 10- and 20-city composites up 0.9 percent in July over June. David M. Blitzer, chairman of the index committee at S&P Indices, said July’s data shows fairly broad improvement in the annual rates of change in home prices, along with anticipated monthly increases. Some price gains are expected during spring and summer due to seasonal demand. Still, 17 of the 20 cities tracked by S&P showed monthly increases and 14 of the 20 cities saw their annual rates of change improve in July. Blitzer said, despite four consecutive months of rising prices, home values would have to continue to climb through the end of the year before it can be called a sustained recovery. More here.

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New Home Sales Up 6.1 Percent Over August 2010

Estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development show sales of new single-family houses were at a seasonally adjusted annual rate of 295,000, 2.3 percent below July’s rate but 6.1 percent above August of last year. The median sales price of new homes sold in August was $209,100; the average sales price was $246,000. The estimate of new houses for sale at the end of August was 162,000, a 6.6-month supply at the current sales rate. A six-month supply of single-family homes is considered healthy for the housing market. More here and here.

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Price Indexes Show Continued Gains For Home Values

According to three recently released home-price indexes, home values saw continued gains in July. The Federal Housing Finance Agency’s price index, which includes the price of properties backing mortgages sold to or guaranteed by government-sponsored enterprises, rose 0.8 percent in July, after gaining 0.7 percent in June. Prices are up more than 2.2 percent over the past six months, surpassing the same period a year ago under the federal tax credit, and up 0.1 percent in July, according to the FNC Residential Price Index. Research and analytics company, Radar Logic, also released their monthly housing report which surveys 25 major markets. The average home price, among the surveyed markets, was up 0.9 percent from June.

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Existing Home Sales Hit Five Month High

Sales of previously owned homes hit a five-month high in August, according to data from The National Association of Realtors. Existing-home sales spiked 7.7 percent to an annual rate of 5.03 million units, exceeding economists’ expectations. Total sales, including single-family, townhomes, condominiums, and co-ops, were 18.6 percent higher than they were in August of last year. Single-family home sales were 20.2 percent above last year’s pace. Ron Phipps, NAR’s president, said the relationship between home prices, mortgage rates, and family income has been hovering at historic highs all year creating the best housing affordability conditions in a generation. The national median existing-home price for all housing types was $168,300. Total housing inventory fell 3.0 percent in August to 3.58 million homes available for sale, an 8.5 month supply at the current sales pace. More here and here.

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Mortgage Application Activity Increases

According to The Mortgage Bankers Association’s Weekly Applications Survey, the seasonally adjusted Market Composite Index, which measures total mortgage loan application volume, increase 0.6 percent last week from the previous week. On an unadjusted basis, the index was up 25.2 percent from the week before, which included Labor Day. The Refinance Index gained 2.2 percent and the seasonally adjusted Purchase Index fell 4.7 percent, though the unadjusted Purchase Index was up 17.1 percent. Refinance activity accounted for 78.3 percent of total loan requests, up from 76.8 the week before. The average contract interest rate for 30-year fixed-rate mortgage was 4.29 percent. More here and here.

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Building Permits On The Rise In August

Permits to build privately-owned housing units in August rose 3.2 percent above July’s estimates and 7.8 percent above last year, according to new residential construction statistics from the U.S. Census Bureau and the Department of Housing and Urban Development. Single-family building permits rose 2.5 percent above the month before. Despite the rise in permits for future construction, housing starts fell in August, down 5.0 percent from July’s revised pace. The decline was due, in large part, to a 13.5 percent drop in multifamily housing. Single-family home construction was down just 1.4 percent from July. More here and here.

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Builder Confidence Slips Slightly In September

The National Association of Home Builders/Wells Fargo Housing Market Index measures builder confidence in the market for newly built, single-family homes on a scale where any number below 50 indicates more builders view the market as poor than good. In September, the index dropped one point to 14. The index has been between 13 and 16 for six straight months. David Crowe, NAHB’s chief economist, said some bright spots are beginning to emerge in a select metro areas but, due to a weak economy and job market, the broader picture remains bleak. Regionally, only the Midwest saw gains in September, rising one point from August. More here.

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