The National Association of Realtors’ Pending Home Sales Index rose 2.4 percent in June and is 19.8 percent above last year’s levels. Economists were expecting a 2.0 percent drop in the index. Pending sales are a forward-looking indicator based on contract signings and, according to NAR chief economist Lawrence Yun, the lag time between pending contracts to actual closings is one to two months. Therefore, two consecutive months of rising activity should lead to overall improvement in closed sales in upcoming months, Yun said. Pending sales increased by 4.4 percent in the South and 6.4 percent in the West. More here and here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages climbed to 4.57 percent last week from 4.54 percent the week before. The Market Composite Index, which measures total loan application demand, dropped 5.0 percent, following the previous week’s more than 15 percent surge. The MBA’s four-week moving averages for purchase and refinance activity were flat. Also, the Federal Housing Finance Agency reported that June marked the third consecutive month mortgage rates declined. According to the FHFA, rates haven’t been above 5.0 percent since April 2010. More here and here.
Sales of new single-family homes fell in June but declining inventory and rising prices suggest the market for new homes is beginning to stabilize. According to estimates from the U.S. Census Bureau and the Department of Housing and Urban Development, new home sales fell 1.0 percent from the month before, though they were 1.6 percent above June 2010. The number of new homes for sale at the end of the month was 164,000, which represents a 6.3-month supply at the current sales pace. The median sales price for new houses was up 7.2 percent from a year earlier. More here and here.
Standard & Poor’s/Case Shiller Home Price Indices, the most closely followed of the many price indexes, showed a second consecutive month of price gains for both their 10- and 20-city composites in May. The 10-city composite index was up 1.1 percent and the 20-city composite rose 1.0 percent. David M. Blitzer, chairman of the index committee at S&P Indices, said that the improvements in May were partly due to expected seasonal gains, as there is typically stronger demand for houses in spring. Prices rose month-over-month in 16 of the 20 cities tracked. The past two months of price increases follow an eighth-month period of declines. More here.
According to an economic outlook from Fannie Mae chief economist Doug Duncan, there are a number of positive signs emerging that indicate the housing market recovery will begin to accelerate later this year. Pending home sales rose 8.2 percent in May, which suggests a rebound in existing-home sales in the coming months. Also, the percentage of distressed sales continues to decline. A larger share of distressed property sales distorts prices downward and as that percentage falls, so does pressure on prices. Duncan says supply-demand conditions in the new home market have become more balanced and new-home sales will remain relatively flat for 2011. Home prices and sales will improve in the third quarter of this year and see more meaningful gains in 2012, according to Fannie Mae’s forecast. More here.