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.
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.
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.
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.
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.