The S&P/Case-Shiller Home Price Indices, the most closely followed measure of national home values, registered a decline of 0.7 percent for their 20-city composite index through November, a bigger drop than the 0.5 percent forecast by economists. David Blitzer, chairman of the index committee at Standard & Poor’s, said price weakness continued despite low interest rates and better real GDP growth in the fourth quarter. Some analysts believe sellers are becoming more flexible on prices than they have been in the past, which would account for prices softening at the same time sales, sentiment, and the broader economy have shown improvement. More here and here.
According to the Thomson Reuters/University of Michigan consumer sentiment index, Americans’ confidence in the economy rose again in January. The overall reading for the month rose to 75.0 from 69.9 in December. It was the highest reading since February 2011 and a better-than-expected improvement. Richard Curtin, the survey’s director, said the recent gains in confidence are dependent on continued gains in employment and, as long as the job market continues to improve, real consumer spending should post a 2.1 percent gain in 2012. The component of the index measuring current economic conditions rose nearly five points and the gauge of consumer expectations was at its highest level since May 2011. More here and here.
The U.S. Department of Housing and Urban Development and the U.S. Census Bureau’s New Residential Sales report for December shows new home sales slowed after three consecutive months of gains. According to the report, sales of new single-family houses were at a seasonally adjusted annual rate of 307,000 units, which is 2.2 percent below November’s rate of 314,000. The Census Bureau estimates there were 302,000 new homes sold in 2011. December’s median sales price was $210,300; the average price was $266,000. There were 157,000 new homes for sale at the end of the month, which is a 6.1-month supply at the current sales rate. More here.
The National Association of Realtors’ Pending Home Sales Index fell 3.5 percent in December but remains 5.6 percent above the previous year’s level. Lawrence Yun, NAR’s chief economist, says the trend line remains positive despite the dip. According to Yun, the preceding two months of contract activity were the highest in the past four years, which suggests December’s decline won’t endanger recent gains in home sales. Pending sales, which indicate contract signings not closings, were up in the Midwest but decreased in the Northeast, South, and West. More here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, total mortgage application volume fell last week following the previous week’s surge in activity. The Market Composite Index, which measures both refinance and purchase applications, was down 5.0 percent. But, though both the Refinance and Purchase Index dropped, the four-week moving average for the Market Index is up 4.12 percent. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 4.11 percent last week from 4.06 percent the week before. The average 30-year rate for jumbo loans dropped to 4.39 percent. During the month of December, 56.6 percent of borrowers chose fixed-rate 30-year loans, while 23 percent chose 15-year loans. More here.