The National Association of Realtors’ Pending Home Sales Index is a forward-looking indicator that measures the number of signed contracts that occur each month. In July, the index rose 2.4 percent, reaching a two-year high and climbing 12.4 percent over year-before levels. Lawrence Yun, NAR’s chief economist, said the index is now at its highest level since April 2010 and, though month-to-month movement has been uneven, there have been 15 consecutive months of year-over-year gains in contract activity. Regionally, pending sales were up across the country, with double-digit improvements in the Northeast, Midwest, and South over last year’s estimates. The NAR projects existing-home sales will rise between 8.0 and 9.0 percent this year, with an additional 7.0 or 8.0 percent improvement in 2013. More here and here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, the seasonally adjusted Purchase Index increased more than 1.0 percent last week. But despite the improvement in demand for home purchase loans, the Market Composite Index, which measures both purchase and refinance application volume, was down 4.3 percent due to a 6.0 percent slide in the Refinance Index. The refinance share of total mortgage activity also fell, dropping to 79 percent from 80 percent the previous week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 3.80 percent from 3.86 percent the week before. The average rate for jumbo loans also declined, dropping to 4.06 percent. More here and here.
The majority of metropolitan areas covered by Zillow’s Home Value Index saw increasing home prices in July. Of the 167 areas included, 62 percent experienced price increases from the month before, with Phoenix seeing the largest spike in values. Nationally, prices were up 0.5 percent month-over-month and 1.2 percent from last year. Dr. Stan Humphries, Zillow’s chief economist, said the housing market continues to heal, as tighter inventory levels have led to the eighth consecutive month of improved home prices. According to Humphries, prices will likely soften a bit in the fall, as rising values will lift some would-be sellers out of negative equity allowing them to put their home up for sale. Also in the report, the number of foreclosures declined in July with just 5.7 out of every 10,000 homes being foreclosed, down from 6.5 the previous month. More here.
Freddie Mac’s August 2012 U.S. Economic & Housing Market Outlook examines the so-called shadow inventory and whether there are a significant number of distressed properties soon to hit the market and erase recent price gains. The concern over the shadow inventory stems from the theory that there are a large number of these soon to be foreclosed properties that will eventually flood the market and send home prices tumbling downward. But, though there is evidence of some excess inventory, the number is far less severe than it has been. According to Freddie Mac’s chief economist Frank Nothaft, much of the shadow inventory has been absorbed over the past few years as fewer new homes were being built and household formation was rising. Now with rental markets in balance and continuing shrinkage of the vacant housing stock, Nothaft believes improvements in home prices are stable and the recovery may be strengthening. According to the Mortgage Bankers Association’s National Delinquency Survey, the number of seriously delinquent loans has fallen by nearly 1.4 million since its peak in 2009. More here.
The U.S. Census Bureau and the Department of Housing and Urban Development released their new home sales estimates for July. According to the data, sales of newly built single-family homes rose 3.6 percent to a seasonally adjusted annual rate of 372,000. June’s rate was was revised upward to 359,000. New home sales are now 25.3 percent higher than they were a year ago, further evidence of improvement in the market and gaining consumer confidence. The median sales price of new homes sold in July was $224,200; the average price was $263,200. At the current sales pace, there was a 4.6-month supply of new houses available for sale at the end of July. More here and here.