Mark Zandi, chief economist and co-founder of Moody’s Economy, says the housing market is six-to-twelve months from real recovery and predicts weaker home sales this summer and another slight dip in prices as foreclosures hit the market.
Foreclosure activity fell on a year-over-year basis in 14 of the 20 cities with the highest foreclosure rates in the country, according to RealtyTrac’s Metropolitan Foreclosure Market Report. Still, 159 of the 206 metro areas tracked in the report posted increases, and foreclosure activity nationwide is up 16 percent from the first quarter of 2009. James J. Saccacio, chief executive officer of RealtyTrac, said the drop in activity in some of the nation’s foreclosure hot spots is largely the result of government intervention and other non-market influences. The report, which measures foreclosure activity in metropolitan areas with populations of at least 200,000, shows cities in California, Florida, Nevada, and Arizona accounted for all of the top 20 foreclosure rates in the country. More here and here.
According to The Mortgage Bankers Association’s Weekly Mortgage Applications Survey, purchase activity last week reached its highest level since October 2009. But while the Purchase Index increased 7.4 percent, the Refinance Index fell 8.8 percent. The average contract interest rate for 30-year fixed-rate mortgages increased to 5.08 percent from 5.04, likely causing the dip in refinancing activity. Michael Fratantoni, MBA’s vice president of research and economics, said purchase applications are up largely because of the home-buyer tax credit. More here and here.
According to the Standard & Poor’s/Case-Shiller Home Price Indices, home prices posted their first annual increase in three years. S&P’s 10-city index was up 1.4 percent from February 2009 and the 20-city index was up 0.6 percent. Despite the year-over-year gains, David Blitzer, chairman of the S&P index committee, warned that it’s too early to say the market is recovering. Home prices are up 3 percent from their bottom, but are still down more than 30 percent from their 2006 peak. More here and here.
In March, sales of new single-family homes were up 26.9 percent over February’s rate, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. The jump was the largest monthly increase in 47 years and is 23.8 percent above last year’s estimate. Also, the median sales price of new homes was $214,000 with an average price of $258,600. More here and here.
James O’Sullivan, chief economist at MF Global Ltd., argues that, though recent spikes in sales are exaggerated by the tax credit, the housing market’s fundamentals are more up than down.
With the national median existing-home price nearly unchanged from last year and time running out on the home-buyer tax credit, existing-home sales rose 6.8 percent in March, according to a report from The National Association of Realtors. Sales, up 16.1 percent from March 2009, have been above year-ago levels for nine straight months. Lawrence Yun, NAR’s chief economist, said price stabilization should lead to a revival in buying confidence, which will help the market rebound after the tax credit impact disappears. More here and here.
According to The Mortgage Bankers Association’s Weekly Mortgage Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages fell from 5.17 percent to 5.04 percent last week. Total loan application volume was up 13.6 percent from the week before, with the Refinance Index up 15.8 percent and the Purchase Index increasing 10.1 percent. Michael Fratantoni, MBA’s vice president of research and economics, said purchase applications continue to rise as the expiration of the home-buyer tax credit approaches. More here and here.
According to The National Association of Realtors’ 2009 Profile of Home Buyers and Sellers, first-time home buyers accounted for 47 percent of all home sales last year. That was the highest market share on record, passing the previous high of 44 percent in 1991. This March, based on a survey from Campbell/Inside Mortgage Finance, 48.2 percent of purchases were first-time buyers. Thomas Popik, research director for Campbell Surveys, said, though many analysts felt the pool of first-time buyers had been depleted last fall, normal spring buying, combined with the tax credit, produced blow-out results. More here. Also a Coldwell Banker survey on single home buyers here. More on single buyers here.
The Department of Commerce’s residential-construction statistics for March show building permits and housing starts both up from February. Building permits were 7.5 above February’s rate and 34.1 percent above March 2009. Housing starts were up 1.6 percent from the previous month and 20.2 percent above last year. Paul Dales, an economist at Capital Economics said the rebound is a sign that stronger home sales have spurred builders to start construction again. More here, here, and here.