According to the S&P/Case-Shiller composite index of 20 metropolitan areas, home prices declined 0.2 percent in March from February. The report shows prices are at mid-2002 levels and slipped in 18 of the 20 cities tracked. Despite a slowly recovering economy, home values are under pressure from excess inventory, particularly in cities that suffered badly from high unemployment and the foreclosure crisis. The Case-Shiller index measures sales prices of homes in select cities compared with January 2000. The index offers a three-month moving average price. More here.
Pending home sales fell in April after two consecutive months of gains. According to the National Association of Realtors’ Pending Home Sales Index, pending sales, which reflect contracts not closings, dropped 11.6 percent from March. Lawrence Yun, NAR’s chief economist, said the economy hit a soft patch in April due to sharply rising oil prices, severe weather, and a rise in unemployment claims, which may have caused the dip in contracts. Yun believes the decline is due to temporary factors and, even with favorable affordability conditions and pent-up demand, the housing recovery will continue to be uneven. More here.
In his latest economic outlook report, Fannie Mae’s chief economist, Doug Duncan, forecasts a modest improvement in housing activity this year. Though the number of distressed homes on the market continues to put pressure on prices, Duncan writes that high housing affordability and still-low mortgage rates should help lift the market in the second half of the year. He is forecasting a 6 percent increase in existing-home sales this year and expects the median price to finish 2011 at $163,600. Duncan believes mortgage rates will rise slightly but remain historically low, which along with improvement in the labor market, should lead to positive gains for housing. More here and here.
According to The Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage loan applications increased 1.1 percent last week from the week before. The Refinance Index rose to its highest level since December 10, 2010, increasing 0.9 percent. The seasonally adjusted Purchase Index gained 1.5 percent from a week earlier. Mortgage rates were also up, with the average contract interest rate for 30-year fixed-rate mortgages increasing to 4.69 percent from 4.60 percent the week before. More here.
Sales of new single-family homes rose 7.3 percent in April. The U.S. Census Bureau and the Department of Housing and Urban Development’s New Residential Sales Report shows new home sales were at a seasonally adjusted annual rate of 323,000. Economists had forecast a sales rate of 300,000. The median sales price of new homes sold in April was $217,900; the average price was $268,900. There were an estimated 175,000 new homes for sale at the end of the month, which represents a supply of 6.5 months at the current sales rate. More here.
Fannie Mae’s First Quarter National Housing Survey found Americans are more optimistic about home prices, the economy, and their personal finances than they were during the last quarter of 2010. According to the survey, which polled homeowners and renters between January and March 2011, the number of Americans that believe the U.S. economy is on the right track has risen four percentage points since the end of last year. Also, 67 percent of respondents believe now is a good time to buy a house and one in three expect home prices will strengthen in the next year. On average, participants expected prices to increase by one percent. Sixty-six percent of Americans believe buying a home is a good investment and 87 percent said owning is superior to renting. More here.
According to the Mortgage Bankers Association’s National Delinquency Survey, the mortgage market has improved in every category of default. During the first quarter, the combined percentage of loans in foreclosure or at least one payment past due was 12.31 percent on a non-seasonally adjusted basis, down 129 basis points from last quarter. Jay Brinkmann, MBA’s chief economist, said short-term delinquencies remain at pre-recession levels, loans 90 days or more delinquent have dropped for five straight quarters, and foreclosure starts are at the lowest level since the end of 2008. The percentage of loans somewhere in foreclosure experienced one of the largest drops on record. Brinkmann said the numbers continue to point to a mortgage market on the mend. More here and here.
Although existing-home sales have risen in six of the past nine months, sales in April were virtually unchanged from the month before. According to The National Association of Realtors, existing-home sales eased 0.8 percent to a seasonally adjusted annual rate of 5.05 million in April. Lawrence Yun, NAR’s chief economist, said sales are expected to trend up this year, due to great affordability conditions, job creation, and pent-up demand, but cautioned that the gains will be uneven. The national median existing-home price was $163,000 in April. Despite month-to-month volatility, home values have been remarkably stable in the range of $160,000 to $170,000, according to Yun. More here.