The National Association of Realtors’ Pending Home Sales Index is a forward-looking indicator based on contract signings but not closings. In May, the index climbed 5.9 percent from the previous month and is 13.3 percent above year-before levels. Lawrence Yun, NAR’s chief economist, said the housing market is clearly superior this year compared to the past four years. The increase in contract signings marks 13 consecutive months of year-over-year gains, Yun said. Regionally, the West and Midwest posted the strongest gains over the previous month, with the West gaining 14.5 percent month-over-month. In the Midwest, pending home sales are 22.1 percent higher than they were in May 2011. More here and here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, mortgage rates increased a percentage point but remained near all-time survey lows. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 3.88 percent from 3.87 percent the week before. But, despite near record-low rates, mortgage application volume was down 7.1 percent last week. Michael Fratantoni, MBA’s vice president of research and economics, blamed the drop on a fall-off in refinance applications for government loans, which more than doubled the prior week. Still, refinance activity remains strong and accounted for 79 percent of total application volume. Purchase activity dipped 1.0 percent from the week before. More here and here.
CoreLogic reports that the current shadow inventory has fallen by 14.8 percent since April 2011 and now stands at 1.5 million units, or a four-month supply. Shadow inventory, also known as pending supply, refers to the number of distressed properties that are seriously delinquent, in foreclosure, and held as real-estate owned by mortgage servicers but are not currently listed. Mark Fleming, chief economist for CoreLogic, said shadow inventory has fallen 28 percent since peaking at 2.1 million units in January 2010. The decreasing number of non-listed distressed properties is a good sign for the housing market because it relieves downward pressure on home prices. The four-month supply of shadow inventory is the lowest level in nearly three years. More here.
Estimates released by the U.S. Department of Housing and Urban Development and the U.S. Department of Commerce show sales of newly built single-family homes at a seasonally adjusted annual rate of 369,000 in May. That is 7.6 percent above the revised April rate and nearly 20 percent above May 2011. The spike in sales exceeded economists’ expectations and put sales at a two-year high. The median price for a new house sold in May was $234,500; the average price was $273,900. The seasonally adjusted estimate of new houses for sale at the end of the month was 145,000. That represents a 4.7-month supply at the current sales rate. More here and here.
According to the National Association of Realtors, sales of existing homes fell 1.5 percent in May but remain 9.6 percent above last year’s pace. Existing-home sales include single-family, townhomes, condominiums, and co-ops. Lawrence Yun, NAR’s chief economist, said home sales have moved markedly higher with 11 consecutive months of gains over the same month a year earlier. Yun believes the month-over-month dip was the result of inventory shortage rather than a lack of demand. Listed inventory is 20.4 percent below last year’s level and, at the current sales pace, there is just a 6.6-month supply of homes for sale. The national median existing-home price rose 7.9 percent from a year ago to $182,600. Also, distressed sales continued to drop as a share of total sales. In May, distressed properties accounted for 25 percent of all existing-home sales. More here, here, and here.