Home Sales Data Info

Homebuilder Confidence Moves To 5-Year High

May 17, 2012
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NAHB HMI Homebuilder Confidence is on the rise once again.

After a brief dip in April, the National Association of Homebuilders reports that the Housing Market Index rose 5 points in May to 29. The increase marks the sharpest climb in homebuilder confidence on a month-to-month basis in 10 years, and raises the index to a 5-year high.

The Housing Market Index is scored from 1-100. Readings above 50 indicate favorable conditions in the single-family new home market overall. Readings below 50 indicate poor conditions.

The HMI has not been above 50 since April 2006.

The Housing Market Index itself is a composite reading as opposed to a straight-up homebuilder survey. The published HMI figure is a compilation of the results of three specific questionnaires sent to NAHB members monthly.

The survey questions are basic :

  1. How are market conditions for the sale of new homes today?
  2. How are market conditions for the sale of new homes in 6 months?
  3. How is prospective buyer foot traffic?

This month, builders are reporting strong improvement across all three surveyed areas. Current home sales are up 5 points; sales expectations for the next six months are up 3 points; and buyer foot traffic is up 5 points to its highest point since 2007.

With mortgage rates low and home prices suppressed, the market for new homes is gaining momentum, a conclusion supported by the New Home Sales report which shows rising sales volume and a shrinking new home inventory nationwide.

The basics of supply-and-demand portend higher new home prices later this year — a potentially bad development for buyers of new homes in Washington State and nationwide. With demand for new homes rising, builders may be less likely to make sale price concessions or to offer “upgrade packages” to buyers of new homes.

If you’re shopping for new construction consider moving up your time frame. Home affordability is high today. It may not be tomorrow.

For all your home loan needs call William Tuning at (360) 539-4687 located at CU Mortgage Division in Olympia, Washington.

Home Values Start The Year Strong

May 2, 2012
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HPI 2007-2012

Home prices started the year on an upswing.

According to the Federal Home Finance Agency’s Home Price Index, home prices rose by a seasonally-adjusted 0.3 percent between January and February 2012. The index is up 0.4% over the past year, offering a counter-story to the Case-Shiller Index’s assertion that home values are sinking.

Last week, Standard & Poor’s Case-Shiller Index said home values had dropped more than 3 percent in the prior 12 months.

As a home buyer or sellers in Thurston County, Washington , data showing “rising home values” or “falling home values” may be of interest to you, but we can’t forget that most home valuation trackers — including both the government’s Home Price Index and the private sector Case-Shiller Index — have a severe, built-in flaw.

Both used “aged” data. Today, the calendar reads May. Yet, we’re still discussing February’s housing data.

Data that is two-plus months old is of little value to everyday buyers and sellers wanting to know the “right now” of housing. And, even then, characterizing the data as “two-plus months old” may be a stretch. This is because the home values used in the Home Price index and the Case-Shiller Index are collected from actual transactions, but at the time of closing.

Considering that most purchases require 45-60 days to close, we can know that when we look at the Home Price Index and Case-Shiller Index reports for February, what we’re really seeing is a snapshot of the housing market as it existed two-plus month plus 60 days ago.

Data that’s 5 months old is of little relevance to today’s buyers and sellers. Today’s market is driven by today’s economics.

The Home Price Index is a useful gauge for economists and law-makers. It highlights long-term trends in housing which can be helpful in allocating resources to a particular project or policy. For home buyers and seller throughout Washington State , though, it’s much less useful. Real-time data is what matters to you.

For that, talk to a real estate professional in Thurston County, Washington. For all your Thurston County, Washington mortgage needs contact William Tuning at CU Mortgage Division located in Olympia, WA at (360) 539-4687 for a free pre-approval or free consultation on your home loan options or just candid conversation.

Pending Home Sales Index Crosses The 100 Barrier

April 27, 2012
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Pending Home Sales 2010-2012

After a series of worse-than-expected data last month, the housing market appears to be back on track.

The Pending Home Sales Index posted 101.4 in March, a four percent gain from the month prior and the index’s highest reading since April 2010 — the last month of that year’s federal home buyer tax credit.

A “pending home” is a home under contract to sell, but not yet closed. The Pending Home Sales Index is tracked and published by the National Association of REALTORS® monthly.

The March report marks the index’s first 100-plus reading in nearly two years.

To home buyers and sellers throughout Washington State , this is statistically significant because the Pending Home Sales Index is normalized to 100, a value corresponding to the average home contract activity in 2001, the index’s first year of existence. 2001 was an historically-strong year for the housing market.

The March 2012 Pending Home Sales Index, therefore, puts current market activity on par with market activity from 2001.

You wouldn’t know it from reading this week’s papers, though. There have been stories about how the Case-Shiller Index put home values at new loans; and how the Existing Home Sales figures unexpectedly dropped off; and how the New Home Sales report was a laggard.

But this is why the Pending Home Sales Index can be so important.

What makes the Pending Home Sales Index different from those other data points is that the Pending Home Sales Index is a “forward-looking” housing market indicator.

Unlike most data which aims to tell us how the housing market performed at some point in the past, the Pending Home Sales Index attempts to tell us how the housing market will perform at some point in the future.

80% of homes under contract close within 2 months. Many more close within months 3-4. Therefore, on the strength of the March Pending Home Sales Index, we should expect a strong April and May nationwide

If you’re shopping for homes right now, consider taking advantage while the market remains somewhat soft. Mortgage rates are low and home prices are, too. It can make for a good home-buying conditions.

New Home Sales Revised Higher In February; Slip 7% In March

April 25, 2012
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New Home Sales 2011-2012Sales of new homes ticked lower in March, unexpectedly.

Based on Census Bureau data, the number of new, single-family homes sold in March slipped 7 percent from February — the largest one-month drop in more than a year.

On a seasonally-adjusted, annualized basis, buyers in Washington State and nationwide purchased 328,000 newly-built homes last month. The decrease in sales from February to March can be attributed, in part, though, to a massive upward revision in February’s figures.

Last month, the Census Bureau had reported 313,000 new home sales in February on a seasonally-adjusted, annualized basis. This month, those sales were re-measured to be 353,000 — an increase of 13 percent.

January’s sales were revised higher, too.

The long-term trend in the market for new homes remains “up”. This is no more apparent than when we look at the available new home inventory.

At the close of March, just 144,000 new homes were available for purchase, down 2,000 from the month prior and representing the most sparse new home housing supply since at least 1993, the year that the Census Bureau starting tracking such data.

At the current pace of sales, the new home housing stock would be sold out in 5.3 months. A six-month supply is believed to represent a market in balance.

For new home buyers in Lacey , March’s New Home Sales report does not represent a housing market pull-back. It may represent opportunity, however.

From October 2011 to February 2012, housing data was uniformly strong. Home sales were higher, home supplies were lower, and confidence was rising. In March, it was the reverse. This is normal because growth is rarely linear.

In any market, it’s a few steps forward and a single step back, and housing is likely showing a similar pattern. With mortgage rates still low and builder confidence down, it’s a terrific time to shop new construction.

There are deals to be found for buyers who seek them out.

Existing Home Sales Slip In March

April 20, 2012
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Existing Home Sales In March, for the second straight month, home resales slipped nationwide.

According to the National Association of REALTORS®, March 2012 Existing Home Sales fell to 4.48 million units on a seasonally-adjusted annualized basis — a 3 percent drop from February.

An “existing home” is a home that’s been previously occupied or owned.

The weaker-than-expected Existing Home Sales data is the third such housing report this month to suggest a lull in the spring housing market. Earlier this week, homebuilder confidence slipped for the first time in three months and March Single-Family Housing Starts fell, too.

The news wasn’t entirely bad for home resales, however. Although total home units sold decreased, so did the number of homes available for sale. There were just 2.37 million homes for sale nationwide in March, a 2 percent drop from the month prior.

At the current pace of sales, therefore, the entire nation’s home resale stock would “sell out” in 6.3 months. This is the second-fastest pace since the housing market’s April 2007 peak.

A 6-month supply is widely believed to represent a market in balance between buyers and sellers.

The March Existing Home Sales data shows that — despite record-low mortgage rates nationwide – buyer activity in Lacey is slowing, and seller activity may be slowing, too.

So long as the two forces remain in balance, home prices should do the same. This is the law of Supply and Demand at work.

However, if home sales continue to slide and home inventory builds, buyers may find themselves with an edge in negotiations.

If you’re planning to buy a home in 2012, the long-term housing trend is still toward recovery. This season may be a good time to look at your options. Talk to your real estate agent to see what’s available. Low mortgage rates may persist, but low home prices may not.

Nevada Relinquishes “Top Foreclosure State” Title

April 19, 2012
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Foreclosures March 2012

According to foreclosure-tracking firm RealtyTrac, foreclosure filings fell to 199,000 in March 2012, a 17 percent decrease from March 2011. Last month marks the first time since July 2007 that foreclosure filings numbered less than 200,000 on a monthly basis — a span of nearly 5 years.

The generic term “foreclosure filing” is used to group all types of foreclosure activity into a single reading. It includes default notices, scheduled auctions, and bank repossessions.

As in most months, foreclosure density varied by region. 6 states accounted for more than half of the nation’s repossessed homes in March.

  • Florida : 13.6 percent of all bank repossessions
  • California : 12.0 percent of all bank repossessions
  • Georgia : 8.0 percent of all bank repossessions
  • Michigan : 7.5 percent of all bank repossessions
  • Arizona : 6.5 percent of all bank repossessions
  • Illinois : 6.4 percent of all bank repossessions

At the other end of the spectrum, North Dakota and Washington, D.C. were home to the fewest bank repossessions, with 0.03% and 0.02% of the national total, respectively.

Also noteworthy is that the RealtyTrac report revealed that Nevada relinquished its title as Top Foreclosure State after 62 consecutive top-ranking months. In March, 1 in every 301 Nevada homes received some form of a foreclosure filing. The March rate was a nation-topping 1 in 300 in neighboring Arizona.

For Tumwater home buyers, today’s foreclosure market represents an interesting opportunity.

Homes purchased while in the various stages of foreclosure can often be bought at lower prices relative to homes not in foreclosure. It’s one of the reasons why foreclosed homes now account for 20 percent of all home resales.

However, don’t confuse less expensive for less costly.

Foreclosed homes are often sold “as-is” and may be in various stages of disrepair. Fixing a foreclosed home to make it habitable could wipe out the money saved on its price tag. Your best real estate “deal”, therefore, may be a non-distressed home in sound, move-in ready condition.

If you’re buying foreclosures — or even considering it — be sure to talk with a real estate agent first. The process of buying a foreclosed property is different from buying a “regular” home. You’ll want somebody experienced on your team.

Single-Family Housing Starts Slip 0.2% In March

April 18, 2012
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Housing Starts Tuesday, the government released its March 2012 New Residential Construction report.

The report is made up of three sections, each related to a phase of the “new home” market. The report’s first part is Building Permits; the second is Housing Starts; the third is Housing Completions.

Of the three sections, it’s Housing Starts that gets the most attention from the press — mostly because, of the triad, it’s the simplest for a layperson to understand. However, the manner in which Housing Starts data is reported can be misleading.

Today’s newspapers offer up an excellent example.

According to the Census Bureau, total Housing Starts fell by 6% in March as compared to the month prior. 654,000 units were started on a seasonally-adjusted annualized basis.

For Housing Starts, it’s the lowest reading in 5 months, a statistic suggesting that the housing market may have lost some momentum. Much of the press covered the story from a “housing is slowing” angle.

A few published headlines include :

Although these headlines are accurate, they tell just half of the story.

Housing Starts did drop in March, but if we remove a subset of the data — structures with “5 or more units”; a grouping that includes condominiums and apartment buildings — we’re left with Housing Starts for single-family residences only. It’s this data that matters most to buyers in Olympia and nationwide.

Few home buyers buy entire apartment buildings. Most buy single-family homes.

In March, single-family Housing Starts were down 0.2% from the month prior, or just 1,000 units on a seasonally-adjusted, annualized basis.

That’s hardly a drop at all.

The Top 10 Cities In Which To Raise A Family

April 11, 2012
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Great places to raise a familyLooking for a great place to raise a family? Forbes Magazine has a list that may help you.

Titled “The Best Cities For Raising A Family“, Forbes has compiled and analyzed data from America’s 100 largest metropolitan areas, accounting for seven lifestyle factors including cost of living, commuting ease, school quality, crime density, and home affordability.

Given these selection criteria, it’s no surprise that Grand Rapids, Michigan took top honors. The area’s low median income is offset by an extremely low cost of living and a school system that’s among the best in the nation. Nearly 90% of the homes in Grand Rapids are affordable families earning the median income — the seventh-highest affordability ranking in the country — and commutes are quick.

Since the housing peak, home prices are down just 12% in Grand Rapids — a figure below the national average.

The complete Top 10 list for the Forbes “The Best Cities For Raising A Family” piece were:

  1. Grand Rapids, Michigan
  2. Boise, Idaho
  3. Provo, Utah
  4. Youngstown, Ohio
  5. Raleigh, North Carolina
  6. Poughkeepsie, New York
  7. Omaha, Nebraska
  8. Ogden, Utah
  9. Cincinnati, Ohio
  10. Worcester, Massachusetts

Now, before you make a home-buying decision based on the Forbes report, remember that real estate is a local market and even city-wide statistics can be too broad to be helpful to everyday home buyers in Tumwater. Even within Grand Rapids, there are some neighborhoods that outperform in terms of home valuations and school quality, for example; and some areas from which a daily work commute may be more cumbersome.

For accurate, real-time housing data in any of our local housing markets and for smaller neighborhoods in Thurston County, be sure to ask a real estate professional located in the Olympia area.

For all your mortgage needs contact William Tuning at CU Mortgage Division at (360) 539-4687 located in Olympia, Washington.

Homes Get More Affordable On March Jobs Data

April 10, 2012
By

Unemployment Rate

Americans continue to get back to work.

Last Friday, in its Non-Farm Payrolls report for the month of March, the Bureau of Labor Statistics announced 120,000 net new jobs created, plus combined revisions in the January and February reports of +4,000 jobs.

The March report marks the 18th straight month of job growth nationwide — the first time that’s happened in 5 years.

The Unemployment Rate dipped in March, too, falling one-tenth of one percent to 8.2%. This is its lowest national Unemployment Rate since February 2009.

Clearly, the jobs market is moving in the right direction. Yet, after the Non-Farm Payrolls report was released Friday morning, stock markets dropped and bond markets gained — the opposite of what a casual market observer would expect.

It happened because, although job growth was strong, Wall Street decided it just wasn’t strong enough. The market expected 200,000 jobs created in March at least and the actual reported figure fell short.

Lucky for you, Wall Street’s pain is Main Street’s gain. After the jobs report was released, mortgage rates immediately dropped to a 3-week low, making homes more affordable in Washington State and throughout all 50 states.

The market’s reaction is an excellent example of how important jobs data can be to home affordability — especially in a recovering economy.

The economy shed 7 million jobs between 2008-2009 and has since added more than half of them back. Wall Street pays close attention to job creation because more working Americans means more consumer spending, and more consumer spending means more economic growth.

Rate shoppers caught a bit of a break on the March payroll data. By all accounts, the labor market recovery in underway and, as it improves, higher mortgage rates are likely nationwide. For now, though, there’s a window for low mortgage rates that buyers and would-be refinancing households can try to exploit.

If you’re actively shopping for a home or a mortgage, today’s mortgage rates may be at “last chance”-like levels. Once rates rise, they’re expected to rise for good.

Case-Shiller Shows Uneven Recovery For U.S. Housing

March 29, 2012
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Case-Shiller Home Value Changes

Recent data suggests that the U.S. housing market is in recovery. However, the data also shows this to be an uneven recovery.

According to the monthly S&P/Case-Shiller Index, for example, home values rose in three of 20 tracked markets between December 2011 and January 2012. 17 tracked markets showed home prices still in decline.

It’s easy to point to the Case-Shiller Index as evidence that the housing market in Washington State has yet to bottom, but we have to consider the Case-Shiller Index’s shortcomings — specifically in a recovering economy.

For example, the Case-Shiller Index is based on changes in home prices of a single home, through successive sales. This means that to calculate its home price index, the Case-Shiller searches for sales of the same home over a period of time and calculates the difference in contract price.

This methodology can distort the home price tracker downward during times of weak economy because there is no distinction made for homes sold in foreclosure or as a short sale.

35% of all homes sold in January were “distressed”, says the National Association of REALTORS®.

Another distortion in the Case-Shiller Index is that the model neglects all home types that are not of type “single-family residence”. This means that multi-unit homes and condominiums are excluded from the Case-Shiller Index model.

In some markets, such as Chicago and New York City, condominiums account for a large percentage of overall sales.

Lastly, the Case-Shiller Index is published with a “lag”, which renders it useless to buyers and sellers of Tumwater in search of real-time, relevant data. The most recent Case-Shiller Index is published with a 60-day delay, and accounts for home purchase contracts written between October and December 2011.

Since October, the U.S. economy has added more than 1 million jobs and the economy has moved into “moderate expansion”, according to the Federal Reserve. Data that’s two seasons old does little to help us today.

Making sound real estate decisions is about having timely, relevant data at-hand when it’s needed. The Case-Shiller Index fails in that respect. It’s good for highlighting the U.S. housing market on the whole, as it existed in the past. For real-time market data, though, you’ll want to talk with an active real estate agent.