Month: July 2013

Pending home sales slip from 6-year high

WASHINGTON (AP) — The number of Americans who signed contracts to buy homes dipped in June from a six-year high in May, a sign that sales could stabilize over the next few months.

The National Association of Realtors said Monday that its seasonally adjusted index for pending home sales ticked down 0.4% to 110.9 in June. The May reading was revised lower by a percentage point to 111.3, but it was still the highest since December 2006.

The slight decline suggests higher mortgage rates may be starting to slow sales. Still, signed contracts are 10.9% higher than they were a year ago. There is generally a one- to two-month lag between a signed contract and a completed sale.

Economists were relieved after seeing only a modest decline. They said that shows higher mortgage rates are having only a small impact on the home sales market.

“All told … pending home sales held up fantastically well,” Dan Greenhaus, chief global strategist at BTIG, an institutional brokerage, said in a note to clients.

The average rate on a 30-year fixed mortgage has jumped a full percentage point since early May and reached a two-year high of 4.51% in late June.

Rates surged after Chairman Ben Bernanke said the Federal Reserve could slow its bond-buying program later this year if the economy continues to improve. The Fed’s bond purchases have kept long-term interest rates low, encouraging more borrowing and spending.

In recent weeks, Bernanke and other Fed members have stressed that any change in the bond-buying program will depend on the economy’s health, not a set calendar date.

Since those comments, interest rates have declined. The average on the 30-year mortgage was 4.31% last week.

Even with higher mortgage rates, signed contracts increased in the West last month. They were unchanged in the Northeast and fell in the South and Midwest.

Home sales and prices have climbed since early last year, buoyed by solid hiring and historically low mortgage rates. Housing has been an important driver of economic growth this year as other parts of the economy have languished, such as manufacturing and business investment.

Sales of previously occupied homes slipped last month, after a big rise in May to the highest level in 3 ½ years.

But new-home sales jumped in June to the fastest pace in five years, boosting confidence that the housing recovery is strengthening.

New group being formed to advocate for homeowners’ interests

America’s Homeowner Alliance will be modeled after AARP, the seniors lobby. The group’s directors and advisory board represent a mix of industry and consumer group leaders.

By Kenneth R. HarneyJuly 26, 2013, LA Times

http://www.latimes.com/business/la-fi-harney-20130728,0,2232569.story

WASHINGTON — Do 75 million homeowners need their own advocate before Congress and federal agencies on issues such as the mortgage interest tax deduction, retention of low-down-payment loans and the start of tougher financing rules next January?

A group of mortgage and real estate industry veterans, joined by leaders of national community development, fair housing and consumer groups, thinks so. They’re set to launch an unusual effort — a national nonprofit organization modeled after AARP, the seniors lobby, solely to speak for the home-owning public.

It’s called America’s Homeowner Alliance and is scheduled to be formally announced within two weeks. The mission, according to its sponsors, is to “protect and promote sustainable homeownership for all segments” of the population, from moderate-income renters saving money for a down payment to long-established owners.

Members will be asked to pay annual dues of $20 — AARP’s dues are $16 — and will receive access to an extensive program of rewards and discounts from more than 1,000 participating companies that offer home-related products and services. They include Home Depot, Lowe’s, Best Buy, Sears, Verizon, major appliance manufacturers, furniture and housewares stores, and encompass what sponsors say will be more than 1 million products. Members will earn points on every product purchase and be able to redeem them for merchandise, travel or other benefits.

The new group, which will be headquartered in St. Louis, is the brainchild of Phil Bracken, former executive vice president for Wells Fargo Home Mortgage and now chief policy officer of government relations for Radian Guaranty Inc., a private mortgage insurer. His specialty as a lender has been financing and promoting affordable homeownership, especially for entry-level buyers, and he has chaired or co-chaired groups such as the Consumer/Lender Roundtable in Washington, D.C.

Bracken will serve as chairman of America’s Homeowner Alliance. Its president and chief executive will be Tino Diaz, who heads a management consulting firm in Florida and is a former chairman and president of the National Assn. of Hispanic Real Estate Professionals.

The group’s directors and advisory board represent a mix of industry and consumer group leaders, including several from Asian, Latino and African American real estate organizations, plus the Consumer Federation of America.

In an interview, Bracken said the alliance is needed “because no one currently represents homeowners’ interests,” even though trade groups representing realty brokers, lenders and builders take positions on legislative and regulatory issues that often coincide with those interests.

Lisa Rice, a vice president of the National Fair Housing Alliance and a member of Bracken’s advisory board, said that despite those supportive positions taken by trade groups, the fact remains: “Realtors represent Realtors; builders represent builders. There is no group that is only looking out for and taking care of homeowners.”

Bracken said he expects to mount a multichannel marketing outreach campaign using social media and the efforts of organizations participating in the alliance starting in September. He hopes to have 250,000 members within 12 months. The goal is 500,000 members by the end of the second year and 5 million members after five years.

“This is a long-term effort,” Bracken said, noting that it has taken AARP decades to grow into the powerhouse it is today.

Like AARP, which focuses on a diverse and large pool of people 50 and older, America’s Homeowner Alliance is targeted at a base of millions of consumers who often have common interests — current property owners and millions of renters who would like to become homeowners.

How will the alliance handle bread-and-butter real estate issues such as the mortgage interest deduction, which is a target this year for tax reformers who complain that homeowner write-offs add too much to the federal deficit and chiefly benefit upper-middle-income and wealthy property owners? Bracken says the group will strongly favor retention of the deductions — a position that coincides with those of the Realtors and home builders.

But at least one of Bracken’s board members, John Taylor, president and CEO of the National Community Reinvestment Coalition, hints at the sort of internal policy splits that seem inevitable for the alliance because of its diverse makeup. Taylor said in an interview that if Congress wanted to cut out deductions for second homes to help reduce the federal deficit, he would be in favor — and would urge the alliance to work with tax reformers on that issue.

kenharney@earthlink.net

Distributed by Washington Post Writers Group.

Annual home prices rise 7.9% in latest LPS report

Home selling prices continue to improve alongside the overall housing recovery. In May, the average home price reached an average of $226,000 in May, up a fairly significant 1.3% fromApril’s $223,000 and up 7.9% from year-ago levels of $209,000. Since the beginning of the year, the HPI is up 5.6%.

Despite the significant growth in home prices, the average price of a home remains 16.3% below peak levels set in June 2006.

May marked the third consecutive month that every one of the 20 largest states saw positive month-over-month growth.

Beginning with its May Home Price Index, Lender Processing Services significantly expanded its property data tracking, now covering an estimated 25% more U.S. counties — nearly 1,900 in total now — and more than 18,500 ZIP codes.

By combining the company’s property and loan-level databases, the HPI provides a repeat sales analysis of home prices as of their transaction dates each month for each of the ZIP codes that are covered. The HPI does take into account price discounts for REO and short sales.

Nevada took the top spot as the state with the biggest home price increase, up 3.0% month-over-month. California and Arizona tied for second, both up 1.8%, while North Dakota and Washington D.C. took third, up 1.7%.

Meanwhile, South Carolina and Wisconsin saw the steepest average price decline of 0.9% from April to May.

 

Additionally, all 40 of the largest U.S. metro areas also saw positive month-over-month growth.

Las Vegas was the metro with the largest increase in average home price, up 3.2% month-over-month. San Francisco; Reno, Nev., and Sacramento took third, all up 2.5% from April to May.

Rising home prices cause real estate investors to retreat

7/22/13 Housingwire.com

http://www.housingwire.com/fastnews/2013/07/22/rising-home-prices-cause-real-estate-investors-retreat?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+housingwire%2FuOVI+%28HousingWire%29

Escalating home prices and mortgage rates prompted many investors to pull back from housing, causing current homeowners to become the main buying force behind the real estate market.

According to the latest Campbell/Inside Mortgage FinanceHousingPulse Tracking Survey, current homeowners were the only group that saw its share of home purchases increase in June — from 43.8% in May to 44.6% last month based on a three-month average.

First-time homebuyers have backed away ever so slightly, with their market share going from 36.0% to 35.7% during the same one-month period.

But the real highlight of the report was the investor share of home purchase transactions, which fell to 19.7%, the lowest level recorded since September 2012.

For the fourth month in a row, the HousingPulse investor traffic index fell, this month more sharply than either the current homeowner traffic index or the first-time homebuyer index.

The survey’s respondents linked the ongoing decline in investor activity to rising home prices coupled with less opportunity for investors to flip homes.

A shrinking supply of distressed properties is doing investors no favors either. The HousingPulse Distressed Property Index revealed that the percentage of home purchases involving foreclosures or short sales fell to 28.2% in June, a significant drop from the 40.3% level recorded a year earlier. This also represented the lowest distressed property share recorded in at least three and a half years.

Southland Home Sales Drop; Record Yr/Yr Gain for Median Sale Price

July 17, 2013 dqnews.com

http://dqnewspressreleases.blogspot.com/2013/07/june-southland-home-sales-press-release.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DQNewsFeed+%28DQ+News+and+Custom+Reports%29

Southern California home sales fell in June amid a still-tight supply of homes for sale, rising mortgage rates and a letup in investor buying. The median sale price rose at a record year-over-year pace to the highest level – $385,000 – in more than five years, a real estate information service reported.

A total of 21,608 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 6.2 percent from 23,034 sales in May, and down 2.1 percent from 22,075 sales in June 2012, according to San Diego-based DataQuick.

Last month’s year-over-year sales decline was the first for any month since last September. June sales were 20.9 percent below the June average of 27,315 sales since 1988, when DataQuick’s statistics begin. Over the past seven years Southland sales have been below average for any particular month.

The median price paid for all new and resale houses and condos sold in the six-county region was $385,000 last month, up 4.6 percent from $368,000 in May and up 28.3 percent from $300,000 in June 2012. Last month’s median was the highest for any month since April 2008, when it was also $385,000, and the year-over-year increase was the highest for any month in DataQuick’s records back to January 1989.

The median price has risen on a year-over-year basis for 15 consecutive months, with those annual gains ranging between 10.8 percent and 28.3 percent over the past 11 months. June’s median remained 23.8 percent below the peak $505,000 median in spring/summer 2007. The median fell by $256,000 from that peak to its $249,000 trough in April 2009, and it has now regained just over half – 51.8 percent – of that peak-to-trough loss.

In a sign of continued market confidence, Southern California home buyers continue to put near-record amounts of their own money into residential real estate. In June they paid a total of $4.7 billion out of their own pockets in the form of down payments or cash purchases. That was down from May’s all-time high of $5.5 billion, and up from $4.1 billion a year ago.

“This market’s getting really interesting. Rates have shot up enough to put a dent in housing affordability. Investor and cash buyers are starting to back off a bit, while there’s evidence the supply of homes on the market, while still thin by historical standards, has risen meaningfully. We saw an amazing pop in home prices over the last year. Now we see signs suggesting that blistering pace won’t persist. We continue to believe that a ‘supply response’ to the run-up in prices will gradually tame price appreciation. If mortgage interest rates shoot up again then that’s virtually a given,” said John Walsh, DataQuick president.

It appears that around three-quarters of last month’s record 28.3 percent year-over-year gain in the Southland median sale price reflects rising home prices, while roughly a quarter reflects a change in market mix.

In June, the lowest-cost third of the region’s housing stock saw a 23.5 percent year-over-year rise in the median price paid per square foot for resale houses. The annual gain was 20.5 percent for the middle third of the market and 17.5 percent for the top, most-expensive third.

The number of sales in the middle and upper price ranges continued to rocket above year-ago levels, while activity dropped sharply in many supply-starved affordable markets.

Home sales rose 22.7 percent year-over-year in the $300,000 to $800,000 price segment – a range that would include many move-up buyers. The number sold for $500,000 or more jumped 35.9 percent from one year earlier, while $800,000-plus sales rose 33.6 percent year-over-year.

In June, 33.0 percent of all Southland home sales were for $500,000 or more, up from 31.9 percent of sales in May and up from 23.1 percent a year earlier. Last month over-$500,000 sales were the highest since February 2008, when 34.2 percent of all sales crossed that price threshold.

Last month the number of Southland homes sold below $200,000 dropped 43.2 percent year-over-year, while sales below $300,000 fell 35.0 percent.

Weak demand isn’t the culprit. The main problems are a fussy mortgage market and an inadequate supply of homes for sale. Many owners can’t afford to sell their homes because they still owe more than they are worth, and lenders aren’t foreclosing on as many properties, further limiting supply.

In June foreclosure resales – homes foreclosed on in the prior 12 months – accounted for 9.1 percent of the Southland resale market. That was down from a revised 10.9 percent the month before and down from 24.4 percent a year earlier. Last month’s foreclosure resale rate was the lowest since it was 7.9 percent in July 2007. In the current cycle, foreclosure resales hit a high of 56.7 percent in February 2009.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 16.2 percent of Southland resales last month, the lowest level in nearly four years. Last month’s figure was down from an estimated 17.3 percent the month before and down from 24.4 percent a year earlier.

Absentee buyers – mostly investors and some second-home purchasers – bought 28.7 percent of the Southland homes sold last month. That was down from 29.5 percent in May and up from 27.3 percent a year earlier. The record was 32.4 percent in January this year, while the monthly average since 2000, when the absentee data begin, is 18.2 percent. Last month’s absentee buyers paid a median $300,000, up 31.0 percent from a year earlier.

After hitting a peak earlier this year, the share of homes flipped has edged slightly lower but remains higher than last year. In June, 5.6 percent of all Southland homes sold on the open market had previously sold in the prior six months, down from a flipping rate of 5.8 percent in May and up from 4.4 percent a year ago. (The figures exclude homes resold after being purchased at public foreclosure auction sales on the courthouse steps).

Buyers paying with cash accounted for 30.2 percent of last month’s home sales, down from 32.7 percent the month before and down from 32.3 percent a year earlier. The peak was 36.9 percent this February, and since 1988 the monthly average is 16.1 percent. Cash buyers paid a median $320,000 last month, up 34.5 percent from a year ago.

Credit conditions continued to show modest signs of improvement.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 28.5 percent of last month’s Southland purchase lending – the highest since August 2007, when jumbos made up 36.7 percent of the market. Last month’s figure was up from 27.8 percent the prior month and up from 20.0 percent a year earlier. In the months leading up to the credit crunch that struck in August 2007, jumbos accounted for around 40 percent of the home loan market.

Last month 9.2 percent of Southland home purchase loans were adjustable-rate mortgages (ARMs), up from 8.0 percent the prior month and 6.7 percent a year earlier. June’s figure was the highest since ARMs were 10.5 percent of the purchase loan market in August 2008. Since 2000, a monthly average of about 32 percent of Southland purchase loans have been ARMs.

The most active lenders to Southern California home buyers last month were Wells Fargo with 8.7 percent of the purchase loan market, imortgage.com with 2.6 percent, and Bank of America with 2.6 percent.

All lenders combined provided $6.2 billion in mortgage money to Southern California home buyers in June, down from $6.4 billion in May and up from $5.2 billion in June last year.

Government-insured FHA loans, a popular low-down-payment choice among first-time buyers, accounted for 19.4 percent of all purchase mortgages last month. That was down from 20.6 percent the month before and 28.4 percent a year earlier. In recent months the FHA share has been the lowest since spring 2008. The decline reflects tighter FHA qualifying standards implemented in recent years as well as the difficulties first-time buyers are having competing with investors and cash buyers.

DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment Southland buyers committed themselves to paying last month was $1,483, up from $1,329 the month before and up from $1,102 a year earlier. Adjusted for inflation, last month’s typical payment was 38.1 percent below the typical payment in the spring of 1989, the peak of the prior real estate cycle. It was 49.3 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to decline. Foreclosure activity remains well below year-ago and far below peak levels. Financing with multiple mortgages is very low, and down payment sizes are stable, DataQuick reported.

To view the county-by-county chart, visit DQNews.com.

June California Home Sales Press Release

June 18, 2013 dqnews.com

An estimated 41,027 new and resale houses and condos sold statewide last month. That was down 6.9 percent from a revised 44,087 in May, and down 3.5 percent from 42,513 sales in June 2012, according to San Diego-based DataQuick.

California June sales have varied from a low of 35,202 in 2008 to a high of 76,669 in 2004. California June sales have varied from a low of 35,202 in 2008 to a high of 76,669 in 2004. Last month’s sales were 16.8 percent below the average of 49,301 sales for all the months of June since 1988, when DataQuick’s statistics begin.

The median price paid for a home in California last month was $352,000, up 3.5 percent from $340,000 in May and up a record 28.5 percent from $274,000 in June 2012. June was the 16th consecutive month in which the state’s median sale price rose year-over-year. In March/April/May 2007 the median peaked at $484,000. The post-peak trough was $221,000 in April 2009.

Of the existing homes sold last month, 10.0 percent were properties that had been foreclosed on during the past year – the lowest level since foreclosure resales were 9.4 percent of the resale market in August 2007. Last month’s figure was down from a revised 11.3 percent in May and 24.9 percent a year earlier. Foreclosure resales peaked at 58.8 percent in February 2009.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 16.0 percent of the homes that resold last month. That was down from an estimated 16.8 percent the month before and 24.3 percent a year earlier.

The typical mortgage payment that home buyers committed themselves to paying last month was $1,356. That was up from $1,227 in May and up from $1,006 a year earlier. Adjusted for inflation, last month’s typical payment was 41.2 percent below the 1989 peak of the prior real estate cycle, and 52.4 percent below the 2006 peak of the current cycle.

DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

Indicators of market distress continue to decline. Foreclosure activity remains well below year-ago and peak levels reached several years ago. Financing with multiple mortgages is low, while down payment sizes are stable, DataQuick reported.

Realtor.com: Inventories are Returning to Normal

While June inventories continue to be down on year-over-year basis, they rose for the sixth consecutive month and are steadily returning to more normal levels. The number of homes listed for sale increased by 4.3 percent in June to 1.9 million homes, the highest level in the last year, according to monthly data released Monday by realtor.com.

Inventories on realtor.com reached their highest level in more than a year, suggesting that market fundamentals continue to be strong and that housing supply in many markets is gradually catching up with housing demand. At same time, the median age of the inventory increased by just one day in June, suggesting that housing sales are generally keeping pace with new property listings.

Both year-over-year list prices and inventories rose simultaneously. While the median list price has stabilized somewhat, it remains 5.27 percent higher than it was one year ago. Rising inventories appear to be having a moderating effect on median list prices, although on a year-over-year basis, median list prices were up by 1 percent or more in 98 of the 146 MSAs covered by realtor.com, compared to 103 markets in June, while the number of markets with a list price decline of at least 1 percent rose from 23 to 25.

Key Market Indicators for June 2013

June 2013

Year-over-Year % Change

Month-over-Month % Change

Number of Listings

1,931,713

-7.29%

4.26%
Median Age of Inventory

80

-15.79%

1.27%

Median List Price

$199,900

5.27%

0.45%

Despite six consecutive months of steady growth, inventories continue to be down by 7.29 percent on a year-over-year basis, although they are now approaching more normal levels. The median age of the inventory rose to 80 days in June, up by one day (1.27 percent) over the month but down by 15.79 percent on a year-over-year basis.

The geography of low inventories changed during June. The top ten markets reporting year-over-year inventory declines are no longer dominated by California markets but now include Boston, Lansing, Grand Rapids and Monmouth NJ. Their potential shortfalls in supply are likely to support robust house price appreciation going forward. Inventories remain depressed in markets where prices have not improved significantly or where negative equity is greater than elsewhere, making it difficult or owners to sell.

10 MSAs with Greatest Year-over-year Inventory Increases

June 2013 vs. June 2012

Dayton-Springfield, OH

17.60%

Riverside-San Bernardino, CA

13.91%

Melbourne-Titusville-Palm Bay, FL

13.10%

Ocala, FL

11.28%

Sacramento, CA

10.99%

Atlanta, GA

10.90%

Shreveport-Bossier City, LA

10.78%

Santa Fe, NM

10.21%

Springfield, IL

9.18%

El Paso, TX

8.60%

 

 

 

 

 

 

 

The for-sale inventories were up by one or more percent on a year-over-year basis in 20 markets in June, compared to 15 markets in May and just 7 markets in April. Markets with the largest increases are shown below. In some of these markets-especially those in California-rising inventories may simply serve to prevent a potential housing bubble by creating a greater balance between supply and demand. However, in other markets-for example, Dayton, Springfield, Shreveport, and El Paso-rising inventories may be a signs of continued and growing market weakness. In either case, the increase in the number of markets with significant YOY increases in their for-sale inventories category suggests that house price appreciation may begin to moderate as the 2013 home buying season draws to an end.

Largely as the result of local economic conditions rather than national patterns, many smaller markets continue to struggle and their numbers appear to be modestly down compared to one year ago. Given the problems that continue to plague these markets, it is unlikely they will experience the run-up in housing values that was seen in other areas.