Pending Home Sales Reach Highest Level In 19 Months

The National Association of Realtors’ Pending Home Sales Index rose 7.3 percent to 100.1 in November and is 5.9 percent above last year’s levels. The improvement brought pending sales to their highest level since April 2010 when the homebuyer tax credit was about to expire. Lawrence Yun, NAR’s chief economist, said some of the gains may have been due to delayed transactions resulting from previous contract failures. According to Yun, housing affordability is at a record high and there is pent-up demand from buyers who have been on the sidelines. Pending home sales rose in every region of the country. The West saw a 14.9 percent increase and the Northeast was up 8.1 percent. More here.

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Positive Economic Indicators End Year On High Note

Positive economic indicators have economists expressing cautious optimism for the housing market in the year ahead. As the year ends, housing prices appear to have stabilized, supply is on the decline, and banks are beginning to loosen lending standards. According to a fourth-quarter report from Capital Economics, distressed home prices, which contribute to the downward pressure on values, have fallen just 0.5 percent in the last year and housing inventory has dropped 20 percent. Combined with the fact that, since the height of the housing boom, prices have dropped 33 percent, Capital Economics says prices have reached a bottom, though they don’t foresee an immediate and dramatic jump in the new year. More here.

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Study Examines Americans’ Attitudes Toward Purchasing A Home

According to a study from the Mortgage Bankers Association titled The Great Recession and Attitudes Toward Homebuying, nearly 80 percent of American households believe now is a good time to purchase a home. The research examined consumer attitudes toward homeownership before, during, and after the most recent recession using 30 years of data from the University of Michigan’s Survey of Consumer Attitudes. The findings show despite slow economic growth and high unemployment, Americans overwhelmingly say conditions are good for buyers. The positive perception was particularly strong among young, educated, white and Hispanic Americans. Michael Fratantoni, MBA’s vice president of research and economics, said the study shows young households still value homeownership and that homebuyer sentiment has returned to its long-term average. More here.

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New Home Sales Up 10 Percent From 2010

The U.S. Census Bureau and the Department of Housing and Urban Development’s New Residential Sales report for November shows sales of new single-family homes rose 1.6 percent over October’s pace to a seasonally adjusted annual rate of 315,000. The improvement puts new-home sales 9.8 percent above last year’s estimate of 287,000. There were 158,000 new homes for sale at the end of the month, which represents a six-month supply at the current sales pace. The median price for a new house in November was $214,000; the average price was $242,900. More here.

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Existing Home Sales Continue Rising In November

According to estimates from the National Association of Realtors, existing home sales, including single-family, townhomes, condominiums, and co-ops, rose 4.0 percent in November over October’s rate and were up 12.2 percent over the 3.94 million-unit pace in November 2010. Lawrence Yun, NAR’s chief economist, said sales reached the highest mark in 10 months and are 34 percent above the cyclical low point reached in mid-2010. Yun believes the gains in contract activity signal that people are realizing the great opportunity that exists in today’s market for buyers with long-term plans. Total housing inventory dropped 5.8 percent to 2.58 million homes available for sale, which represents a 7.0-month supply at the current sales pace. The national median existing-home price was $164,200 in November. More here.

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Housing Starts Surge in November

In November, privately-owned housing starts rose 9.3 percent and reached their highest level in a year and a half. According to The U.S. Census Bureau and the Department of Housing and Urban Development, the spike in residential construction drove total housing starts to a seasonally adjusted annual rate of 685,000, 24.3 percent above last November’s rate of 551,000. Single family housing starts were 2.3 percent above October’s rate. Building permits for future construction also rose during the month. Permits for privately-owned housing units were up 5.7 percent for the month and 20.7 percent for the year. Single-family authorizations were at a rate of 435,000, 1.6 percent above October’s estimate. More here.

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Average Mortgage Rate Dips Lower, So Does Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell again last week, though total mortgage application volume also was down. The Market Composite Index, which measures both refinance and purchase activity, dipped 2.6 percent from the previous week. The Purchase Index decreased 4.9 percent and the Refinance Index slipped 1.6 percent. The average contract interest rate on 30-year fixed-rate mortgages with conforming loan balances fell to 4.08 percent from 4.12 percent the previous week. The drop brought rates to their lowest level yet this year. The refinance share of all mortgage activity reached a high for the year with 80.7 percent of total applications. More here.

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Builder Sentiment Hits Highest Level Since May 2010

The National Association of Home Builders/Wells Fargo Housing Market Index measures builder confidence in the market for newly built, single-family homes. In December, the index improved for the third straight month and reached its highest point since May 2010. David Crowe, NAHB’s chief economist, said it was the first time that builder confidence has improved for three consecutive months since mid-2009, signifying a legitimate, though slowly emerging, upward trend. Each of the three component indexes registered gains in December, with the component gauging traffic of prospective buyers up three points to its highest level since 2008. Builder confidence was strongest in the south, where it rose four points. More here.

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Economic Growth, Housing Activity To Rise In 2012

According to Freddie Mac’s December 2011 U.S. Economic and Housing Market Outlook, 2012 should bring stronger economic growth, a better job market, and an increase in housing activity. Frank Nothaft, Freddie Mac’s chief economist, says the economy grew at a faster pace in the waning months of 2011 due to stronger retail sales, low inventory levels, and increasing non-farm payroll employment. The acceleration of economic growth in the fourth quarter should provide momentum heading into 2012. Nothaft also forecasts a drop in the unemployment rate over the next year. After falling to 8.6 percent in November, the unemployment rate will experience a modest decline in the next year, though it will remain uncomfortably high. Nothaft also forecasts increasing home sales and new construction for the housing market. Low mortgage rates and high affordability will lead to a three-to five-percent sales spike in 2012. Due to the fact that home prices vary depending on local market performance, Freddie Mac’s outlook calls for further gains in markets that are currently appreciating but, in markets with higher vacancy rates and a large number of distressed sales, prices will continue to feel downward pressure. More here.

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68 Percent Of Americans Say Now Is The Time To Buy

Fannie Mae’s National Housing Survey polls Americans each month to assess their attitudes and expectations toward owning a home, renting, mortgage rates, the economy, household finances, and overall consumer confidence. In November, 68 percent of respondents said now was a good time to buy a home and, for the first time in six months, surveyed Americans said they expected prices to rise over the next year. Among respondents, 22 percent said they expected price increases over the next 12 months. The average expected increase was 0.2 percent. Doug Duncan, Fannie Mae’s vice president and chief economist, said though home price expectations have become slightly positive, consumers remain concerned about the economy and view their household finances as being relatively flat. When asked whether they’d buy or rent their next home, 63 percent of Americans said they’d prefer to buy. More here.

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