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.
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.
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.
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.
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.