The U.S. Department of Housing and Urban Development and the U.S Department of the Treasury’s August Housing Scorecard paints a mixed picture of the housing market and the administration’s recovery and mortgage modification efforts. The report says the housing market remains fragile, though home prices were up for the third consecutive month according to indexes from S&P/Case-Shiller and FHFA. Foreclosure starts and completions also continued to trend downward. Still, a slight rise in mortgage delinquencies underscores the continued uncertainty in the housing market, according to the scorecard. Also, more than 28,000 additional homeowners received permanent mortgage modifications in July through the administration’s Home Affordable Modification Program. More here and here.
Despite uncertainty in the economy and job market, housing data has shown modest improvement, according to Fannie Mae’s most recent monthly economic forecast. According to the report, new home sales and housing starts were up during the second quarter and home prices firmed, though existing home sales lost momentum. Pending home sales also saw improvements, as did inventory levels and the share of distressed sales. Despite the gains, Fannie Mae economists Doug Duncan and Orawin T. Velz express caution due to sluggish economic growth and the extent to which recent improvements were seasonally driven. Still, they expect historically low mortgage rates to spur refinance activity, which could help offset the headwinds facing household finances. More here.
According to The Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages fell to 4.32 percent after rising to 4.39 percent the week before. At 4.32 percent, mortgage rates are now back to their lowest level of the year. Despite the rate drop, the Market Composite Index, which measures total mortgage loan application volume, decreased 9.6 percent due to slowing refinance activity following a recent surge. The Purchase Index, however, increased 0.9 percent. Michael Fratantoni, MBA’s vice president of research and economics, said refinance activity declined despite mortgage rates near a 10-month low. More here and here.
In the second quarter of 2011, national home prices rose 3.6 percent. According to the Standard & Poor’s /Case-Shiller home price index, prices were up in June from May in 19 of the 20 cities tracked. David M. Blitzer, chairman of the index committee at S&P Indices, said none of the analyzed cities made new lows in June and the majority of cities are seeing improved annual rates, though prices were down year-over-year. The largest monthly increases were found in Chicago, Minneapolis, Washington, and Boston. Twelve of the 20 metro areas have increased for three consecutive months. More here and here.
The National Association of Realtors’ Pending Home Sales Index, which measures contract signings but not closings, is 14.4 percent above July 2010 despite falling 1.3 percent from June. Lawrence Yun, NAR’s chief economist, said contract activity has been fairly comparable to the first three months of the year and well above April’s low. According to Yun, the underlying factors for improving sales, such as rising rent and high affordability conditions, are developing. Pending sales of existing homes are well above year-ago levels in all regions and are up 20.6 percent in the West and 18.8 percent in the Midwest. More here.
According to RealtyTrac’s Q2 2011 U.S. Foreclosure Sales Report, sales of homes in some stage of foreclosure or bank ownership accounted for 31 percent of all residential sales during the second quarter, which is down from 36 percent in the first quarter. James Saccacio, chief executive officer of RealtyTrac, said the report was good news for well-positioned buyers and investors, as well as distressed homeowners looking to sell and lenders saddled with large portfolios of delinquent loans. A 19 percent surge in pre-foreclosure sales indicates the housing market is starting to focus on clearing distressed inventory more efficiently, according to Saccacio. More here and here.
Based on current market conditions, buying a home is cheaper than renting in 74 percent of major U.S. cities. Trulia’s Summer 2011 Rent vs. Buy Index compared price-to-rent ratios for the 50 largest cities using the median list price compared to the median rent as of July 1. Renting was cheaper than buying in only 12 of the 50 analyzed cities. Ken Shuman, head of communications at Trulia, said buyers should ask themselves if they plan to live in the home for at least seven years, could make monthly payments, and have enough for a down payment and six-to-eight months worth of mortgage payments. According to Schuman, the cost of buying a home definitely outweighs renting in most cities for prospective buyers that can answer yes to each of those questions. More here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages increased last week, climbing to 4.39 percent from 4.32 percent the week before. Despite near record-low rates, the Market Composite Index, which measures total mortgage loan application volume, was down 2.4 percent. Michael Fratantoni, MBA’s vice president of research and economics, said the decrease was due to a drop in purchase applications brought upon by another week of volatile markets and uncertainty about the economy. Still, the four week moving average for the seasonally adjusted Market Index is up 6.9 percent, while the four week average for the Refinance Index is up 9.9 percent. More here.
Sales of new single-family homes were up 6.8 percent over last year’s estimates in July. According to the U.S. Census Bureau and the Department of Housing and Urban Development’s New Residential Sales report, new home sales were at a seasonally adjusted rate of 298,000, which was above the July 2010 estimate of 279,000 but 0.7 percent below June’s revised rate of 300,000. The median price for a new home was $222,000; the average sales price was $272,300. The number of new houses for sale at the end of July was 165,000, which represents a 6.6-month supply at the current sales rate. A six-month supply of single-family homes is considered healthy for the housing market. More here and here.
The combined percentage of loans in foreclosure or at least one payment past due rose slightly in the second quarter compared to the first but was 143 basis points lower than a year ago, according to the Mortgage Bankers Association’s National Delinquency Survey. The quarterly increase was due to a rise in loans one payment past due. Jay Brinkmann, MBA’s chief economist, said, though overall mortgage delinquencies were up during the second quarter, there’s been a continued decline in long-term delinquencies and both foreclosure starts and inventory rates are down. According to Brinkmann, the numbers don’t support the idea that there’s a growing backlog of loans being held back from foreclosure. If the drop in foreclosure rates were only temporary, the percentage of loans 90-days or more delinquent would be increasing rather than decreasing. More here.
