The number of homes that are seriously delinquent or in foreclosure, but not listed for sale, fell to 1.8 million units, from 2.0 million a year ago. Of that shadow inventory, or pending supply, 870,000 units are seriously delinquent, 445,000 are in some stage of foreclosure, and 470,000 have already been seized by lenders in foreclosure proceedings, according to estimates from CoreLogic. Mark Fleming, CoreLogic’s chief economist, said, though the trend is improving, levels remain high. At the current sales pace, the shadow inventory represents a nine-month supply. More here and here.
According to The Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage loan applications fell 7.5 percent last week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.92 percent from 4.80 percent the week before, causing a 10.1 percent drop in the Refinance Index. The Purchase Index was down just 1.7 percent. Michael Fratantoni, MBA’s vice president of research and economics, said the rise in rates caused a predictable response in refinance volume, while purchase volume remained flat as the market enters its peak home buying season. More here and here.
The Standard & Poor’s/Case-Shiller 20-City Home Price Indices shows prices dropped 1.0 percent in January from December 2010 and decreased 3.1 percent year-over-year. Still, the index, which measures the average value of single-family housing in 20 major metropolitan areas, is up 1.1 percent from its April 2009 low. Cities where foreclosures dominate the market experienced more downward pressure on prices, while cities such as San Diego and Washington D.C. posted year-over-year gains. More here and here.
Despite expectations that it would fall, The National Association of Realtors’ Pending Home Sales Index rose 2.1 percent in February. The index, based on contracts signed during the month, is a forward-looking indicator for existing-home sales. Lawrence Yun, NAR’s chief economist, said long-term trends show contract activity up 20 percent from its low last June, even with periodic monthly declines. And, though there may be few notable gains in existing-home sales in the near term, they are expected to rise 5 to 10 percent this year, Yun said. More here and here.
Young families and adults under the age of 45 are optimistic about buying a home and are likely to lead a sales recovery, according to two recent surveys. More than 85 percent of 10,000 buyers and potential buyers surveyed by the National Association of Home Builders and Builder magazine said now was a good time to buy a home and only 13 percent thought prices would continue to fall. A survey from Wells Fargo found that Americans between the ages of 20 and 31 have an overwhelmingly positive view of homeownership. A majority of respondents said they would still want to buy a home even though it could lose value and are generally excited about owning a house. More here.
New home sales fell 16.9 percent in February, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. Sales dropped in all regions but were particularly slow in the Northeast and Midwest, where severe winter weather may have played a role in suppressing sales activity. The median sales price for new houses sold in February was $202,100; the average was $246,000. There was an 8.9-month supply of new homes for sale at the end of February. More here and here.
According to The Mortgage Bankers Association’s Weekly Applications Survey, loan application volume rose 2.7 percent last week. Both the Refinance and Purchase Index also increased 2.7 percent from the previous week and the four week moving average for total mortgage loan application volume was up 2.5 percent. The average contract interest rate for 30-year fixed-rate mortgages moved to 4.80 percent from 4.79 percent the week before. More here and here.
As the housing market enters its busiest season, economists and industry analysts foresee a spring sales boost due to high affordability conditions, low interest rates, and improvements to the overall economy. David Berson of the PMI Group told The Wall Street Journal that improvements in the job market should make consumers more comfortable buying a home, as they have more confidence in their income-earning potential. And though February sales data was weak, The National Association of Realtors said the weakness may have been driven by bad winter weather and deals canceled over low appraisals. Lawrence Yun, NAR’s chief economist, said sellers are becoming much more realistic in terms of valuing their homes, which should lead to more favorable buying conditions this spring.
After three consecutive months of gains, existing home sales fell in February. According to The National Association of Realtors, sales dropped 9.6 percent from January and are 2.8 percent below year-ago levels. Lawrence Yun, NAR’s chief economist, said he expects a gradual and uneven recovery despite record affordability conditions and an improving economy. Total housing inventory rose 3.5 percent to 3.49 million homes for sale, which represents an 8.6-month supply. Existing home sales remain 26.4 percent above the cyclical low last July. More here and here.
In a statement following its regular monetary policy meeting, the Federal Reserve said the economic recovery is on firmer footing. The statement cited gradual improvement in the labor market and continued gains in household spending and business investment among the reasons for its optimism. Still, the housing sector and investment in nonresidential structures remains weak and lags behind progress in the overall economy. The Fed decided to maintain its current policy goals in order to promote a stronger pace of recovery. More here.