The S&P/Case-Shiller Home Price Indices, the most closely followed measure of national home values, registered a decline of 0.7 percent for their 20-city composite index through November, a bigger drop than the 0.5 percent forecast by economists. David Blitzer, chairman of the index committee at Standard & Poor’s, said price weakness continued despite low interest rates and better real GDP growth in the fourth quarter. Some analysts believe sellers are becoming more flexible on prices than they have been in the past, which would account for prices softening at the same time sales, sentiment, and the broader economy have shown improvement. More here and here.
According to the Thomson Reuters/University of Michigan consumer sentiment index, Americans’ confidence in the economy rose again in January. The overall reading for the month rose to 75.0 from 69.9 in December. It was the highest reading since February 2011 and a better-than-expected improvement. Richard Curtin, the survey’s director, said the recent gains in confidence are dependent on continued gains in employment and, as long as the job market continues to improve, real consumer spending should post a 2.1 percent gain in 2012. The component of the index measuring current economic conditions rose nearly five points and the gauge of consumer expectations was at its highest level since May 2011. More here and here.
The National Association of Realtors’ Pending Home Sales Index fell 3.5 percent in December but remains 5.6 percent above the previous year’s level. Lawrence Yun, NAR’s chief economist, says the trend line remains positive despite the dip. According to Yun, the preceding two months of contract activity were the highest in the past four years, which suggests December’s decline won’t endanger recent gains in home sales. Pending sales, which indicate contract signings not closings, were up in the Midwest but decreased in the Northeast, South, and West. More here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, total mortgage application volume fell last week following the previous week’s surge in activity. The Market Composite Index, which measures both refinance and purchase applications, was down 5.0 percent. But, though both the Refinance and Purchase Index dropped, the four-week moving average for the Market Index is up 4.12 percent. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 4.11 percent last week from 4.06 percent the week before. The average 30-year rate for jumbo loans dropped to 4.39 percent. During the month of December, 56.6 percent of borrowers chose fixed-rate 30-year loans, while 23 percent chose 15-year loans. More here.
In the latest CoreLogic MarketPulse Report, analyst Mark Fleming says 2012 may be the year the housing market recovery picks up. Fleming cites improvement in the job market along with low mortgage rates and home prices as reasons to be optimistic that buyers will return to the market this year. The end of 2011 saw increasing home sales and gains in housing starts and builder confidence. Available inventory has fallen and is now at just over a six-month supply at the current sales pace. Taken together with improvement in the broader economy, recent housing data suggests the market may stage a minor recovery this year. Fleming says analysts will be monitoring the market closely for positive signs during the spring and summer selling seasons. More here and here.
The latest monthly data from the National Association of Realtors shows existing-home sales up 5.0 percent in December, the third consecutive month of gains. Sales of previously owned homes rose 3.6 percent over the previous year and, for all of 2011, sales were up 1.7 percent. Lawrence Yun, NAR’s chief economist said the pattern of home sales in recent months demonstrates a market in recovery. According to Yun, record low mortgage interest rates, job growth, and low home prices are giving more consumers the confidence they need to enter the housing market. Total available housing inventory dropped 9.2 percent in December to a 6.2-month supply at the current sales pace. The national median existing-home price was $164,500. More here.
The National Association of Home Builders/Wells Fargo Housing Market Index measures builder confidence in the market for new single-family homes. In January, the index rose for the fourth consecutive month and reached its highest level since June 2007. Bob Nielsen, chairman of the National Association of Home Builders, said the latest improvements to builder confidence reached every component and region and comes on the heels of several months of gains in single-family housing starts and sales. According to Nielsen, a gradual but steady improvement is beginning to take hold in an increasing number of housing markets nationwide. Component indexes measuring current sales conditions, expectations for the next six months, and traffic of prospective buyers all improved in January. Among regions, the West saw a five point gain while the Northeast index rose by nine points. The South gained two points and the Midwest posted a one point gain over December’s level. More here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, the Market Composite Index, which measures total mortgage loan application volume, surged 23.1 percent last week from the week before. Refinance activity was up 26.4 percent and reached its highest level since August of last year. The Purchase Index also saw improvements, rising 10.3 percent from the week before. Michael Fratantoni, MBA’s vice president of research and economics, said interest rates dropped due to continued anxiety regarding the economic situation in Europe. The drop in rates led to the spike in refinance activity and brought buyers back to the market following the holiday season, according to Fratantoni. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 4.06 percent from 4.11 percent the week before. It was the lowest 30-year rate in the history of the survey. More here.
Fannie Mae’s Economics & Mortgage Market Analysis Group’s recently released economic outlook for 2012 calls for growth to slow during the first of half of the year and trend higher through the second-half of the year. The group’s economists forecast growth of 2.3 percent for the year, with home sales up 3.5 percent from 2011. Due to improving labor market conditions and attitudes toward employment and future income, consumer sentiment has begun to move in a positive direction. Doug Duncan, Fannie Mae’s chief economist, said we’re entering 2012 with momentum, though he expects that momentum to slow during the beginning of the year. Duncan expects a year of moderate growth edging away from the 2011 threat of a double-dip recession. More here.
RealtyTrac’s Year-End 2011 U.S. Foreclosure Market Report shows a total of 2,698,967 foreclosure filings in 2011, down 34 percent from 2010 and 33 percent below 2009′s totals. Foreclosure filings, which include default notices, scheduled auctions, and bank repossessions, were reported on 1,887,777 properties in 2011. Brandon Moore, chief executive officer of RealtyTrac, said 2011 saw a dramatic drop in foreclosure activity, due to a lack of clarity regarding documentation and legal issues. For the month of December, foreclosures dropped 9 percent from the month before and 20 percent from the previous year. December’s totals were the lowest since November 2007. Default notices were down 19 percent during the month. More here.