The Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed in February, rose 8.2% to 97.6 from a downwardly revised 90.2 in January, and remains 17.3% above February 2009 when it was 83.2. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said the improvement is another hopeful sign. “The rise in buyer contact activity may signal the early stages of a second surge of home sales this spring. The healthy gain hints home prices are continuing to flatten,” he said. “We need a second surge to meaningfully draw down inventory and definitively stabilize home values.”

The PHSI in the Northeast rose 9.0% to 77.7 in February and is 18.9% higher than February 2009. In the Midwest the index jumped 21.8% to 97.9 and is 18.7% above a year ago. Pending home sales in the South increased 9.2% to an index of 107.0, and the index is 17.5% higher than February 2009. In the West the index fell 4.8% to 98.0 but is 14.6% above a year ago.

“Anecdotally, we’re hearing about a rise of activity in recent weeks with ongoing reports of multiple offers in more markets, so the March data could demonstrate additional improvement from buyers responding to the tax credit,” Yun said.

For more information, visit www.realtor.org.

Source: RISMedia

“Builders are starting to see the positive impacts of home buyer tax credits and other favorable buying conditions in terms of consumer demand, and are cautiously increasing production to meet that demand,” said National Association of Home Builders (NAHB) Chairman Bob Jones, a home builder from Bloomfield Hills, Mich.

“As our latest home builder surveys have indicated, today’s excellent home buying conditions–including the availability of tax credits for first-time and repeat buyers, very favorable mortgage rates and stabilizing home values–are helping drive potential buyers back to the market,” said NAHB Chief Economist David Crowe. However, he said, “A continuing shortfall in available credit for building projects is still producing a drag on new construction and slowing the progress of recovery in housing and the overall economy.”

The overall gain in housing starts was reflected on both the single- and multi-family side this January. While single-family starts posted a 1.5% gain to a seasonally adjusted, annual rate of 484,000 units, multifamily starts posted a 9.2% gain to 107,000 units.

Meanwhile, overall permit issuance, which can be an indicator of future building activity, fell 4.9% to a rate of 621,000 units in January. This was due entirely to a 23% decline to 114,000 units on the multifamily side, which offset a big gain in that sector the previous month. Single-family permits held virtually even, with a 0.4% gain to 507,000 units.

Combined single- and multifamily housing starts rose in three out of four regions this January. The South and West each registered a third consecutive month of improvement, with 1% and 8.9% gains, respectively, and the Northeast also posted a 10% gain. The Midwest saw a 3.2% decline in overall housing starts.

Conversely, permit issuance declined in three out of four regions this January. The West was the only region to post a gain, of 8.5%, while declines of 17.8%, 20.2% and 1.3% were registered in the Northeast, Midwest and South, respectively.

For more information, visit www.nahb.org.

Source: RISMedia

But, as always, conditions vary by market. This table shows trends in twenty-five selected metro markets. Of these markets, twelve had negative monthly changes in home values in November versus only nine with negative monthly changes in October, an indication that some of the markets that have exhibited positive appreciation in recent months are seeing renewed depreciation, as we expected.

The three cities with flat or positive performance in October that turned slightly negative again in November were San Diego (down 0.1% in November after six consecutive months of gains), Seattle (down 0.1% after four consecutive months of gains) and Washington D.C. (down 0.1%). Other metros with several months of gains turned in much weaker appreciation in November and are very likely to show renewed depreciation in the coming months. These include Baltimore, Boston, Cleveland, Denver and Los Angeles.

Nationally, the percentage of homes foreclosed in the month (out of all homes) regained its former peak of 0.1% in November indicating that foreclosure activity is picking up again. Foreclosure re-sales as a percentage of all transactions remained steady at 20% but would have likely risen higher had it not been for robust sales activity fueled by the anticipated expiration of the first-time home buyer tax credit (which was expanded and extended to the end of April).

This figure shows the month-over-month and year-over-year changes in home values for the past nine years. The annualized appreciation rate continues to moderate but we think its unlikely monthly appreciation is going to break into positive territory near-term. Instead, we expect monthly appreciation to get more negative in the coming months as foreclosures continue, inventory levels stay high, and mortgage rates increase.

For more information, visit www.Zillow.com.

Read more: http://rismedia.com/2010-01-17/u-s-housing-values-continued-to-show-stabilization-in-november-2009/#ixzz0czYAbLBr

With one filing for every 417 houses nationally, November saw the lowest amount of foreclosure activity since February. The numbers, while 18% higher than the same month last year, were a result of “loan modifications and other foreclosure prevention efforts,” said RealtyTrac chief executive James J. Saccacio. He said the recently extended and expanded homebuyer tax credit was keeping a lid on home value depreciation.

Saccacio warned, however, that a full recovery will come only “when unemployment recedes to normal, healthy levels and when availability of credit reaches a more rational balance between the extremes of the past few years.”

Data from Integrated Asset Services of Denver showed values continuing to decline despite the buying boom fostered by the tax credit.

Home values actually declined 0.05% nationally in October from September, with the Northeast, especially metropolitan Boston, dragging the numbers down. The Northeast region fell 1.6%; the Middle Atlantic, 0.06%.

“I have no doubt that the tax credit persuaded some buyers to make their purchase sooner than they otherwise would have,” said Dave McCarthy, president and CEO of Integrated Asset Services. “It’s reasonable to think the broader market will reflect that reality at some point down the road.”

Although Saccacio credited loan modification efforts as helping slow the rate of foreclosures, a recent Treasury report on the Obama administration’s Making Home Affordable program showed the effort coming up woefully short in getting lenders to alter mortgage terms permanently. Programs to mitigate foreclosures are not having the desired impact, said Michael Feder, president of Radar Logic in New York, which tracks the housing market.

The Treasury Department reported that just 31,382 loans of the four million mortgages targeted had been modified permanently since the program began in February. There are 728,000 loans in “trial” modification. By some estimates, there is as much as $1 trillion in potential foreclosures already delinquent, Feder said. Lawmakers have been critical of the program, which they say is still focusing on the subprime-loan crisis of last year rather than mortgage foreclosures related to rising unemployment. They also have taken lenders to task, especially those who have taken government bailout money, known as TARP funds. Those lenders, however, have been reporting great success in modifying loans independent of the government program.

Resets of thousands of so-called exotic mortgages such as option adjustable-rate loans in 2010 “will undoubtedly lead to another wave of foreclosures as payments begin to double and triple,” said Sylvia Alayon, vice president of the Consumer Mortgage Audit Center in Fort Lauderdale, Fla.

“When principal balances go up and house values continue to plummet, refinancing will no longer be an option for homeowners in negative amortization,” she said.

(c) 2009, The Philadelphia Inquirer.

Distributed by McClatchy-Tribune Information Services.

Read more: http://rismedia.com/2009-12-13/foreclosure-filings-fall-for-fourth-month/#ixzz0ZfxMpKNf

Lawrence Yun, NAR chief economist, said the projections are enhanced by a tax credit expansion to more home buyers through the middle of 2010. “Given the success of the first-time buyer tax credit to date, and the need for qualified buyers to continue to absorb inventory that will include additional foreclosures over the coming year, we are hopeful about the impact of the expanded tax credit because it will stabilize home prices,” he said. “In fact, the credit is working better than first projected – it now looks like we’ll have 2.3 to 2.4 million first-time buyers this year.”

The 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows first-time buyers accounted for a record 47% share of home sales over the past year, up from 41% in the 2008 survey. The share has risen steadily since a cyclical low of 36% in 2006.

Existing-home sales are expected to total 5.01 million in 2009, a gain of 2.0% over last year, and then are forecast to rise 13.6% to 5.69 million in 2010. “A steady draw down of inventory will help home values to turn positive in 2010, but risks such as unemployment remain in the economy,” Yun said.

New-home sales are projected at 397,000 this year, recovering to 549,000 in 2010. Housing starts, including multifamily units, should total 564,000 units this year but grow to 752,000 in 2010.

The 30-year fixed-rate mortgage will probably average 5.3% in the fourth quarter, rising gradually to 5.8% by the end of next year. NAR’s housing affordability index will set a record in 2009, averaging 30 percentage points higher than 2008. Affordability will decline from record highs next year but will remain at historically attractive levels for home buyers.

“We’ve seen a steady downtrend in housing inventory for well over a year and home prices appear to be in the early stages of stabilizing. With the expansion of the tax credit to additional buyers through the middle of next year, and no major unforeseen events impacting the economy, home prices should rise between 3 and 5% in 2010, but with wide geographic differences,” Yun said. He expects growth in the U.S. gross domestic product to be at a pace of 2.5% in the current quarter, with GDP up 2.8% in 2010.

The unemployment rate is close to peaking and is projected to ease to 9.5% by the end of next year.

“The size of the U.S. budget deficit is a concern going forward, and carries the risk of higher inflation. At this point, that risk appears to be restrained,” Yun said. Inflation, as measured by the Consumer Price Index, is seen contracting 0.4% this year, then rising 1.6% in 2010. Inflation-adjusted disposable personal income is estimated to grow 0.4% this year and 1.2% next year.

For more information, visit www.realtor.org.

Read more: http://rismedia.com/2009-11-17/housing-and-economy-headed-for-sustainable-recovery-first-time-homebuyers-lead-the-way/#ixzz0XEBlv8Rh

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in September 2009, rose 6.1% to 110.1 from a reading of 103.8 in August, and is 21.2% higher than September 2008 when it stood at 90.9. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8.

Lawrence Yun, NAR chief economist, said the momentum is understandable. “What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” he said. “Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery.”

NAR estimates approximately 3 million renters are now financially well-qualified to buy a median-priced home. “As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers,” Yun said. “Although the tax credit is greatly reviving the existing home market, new-home sales may continue to struggle as home builders hold back production to drive down inventory. In addition, there remains an ongoing credit crunch for construction loans.”

The Pending Home Sales Index in the Northeast slipped 2.0% to 83.6 in September but remains 16.9% above September 2008. In the Midwest the index rose 8.1% to 98.2 in September and is 17.8% higher than a year ago. In the South, pending home sales increased 4.9% to an index of 109.7 and is 22.8% above September 2008. In the West the index jumped 10.2% to 143.8 and is 23.7% above a year ago.

Yun added that strong near-term reports should not be overstated. “We’re clearly not out of the woods because an excess of homes remains on the market despite recent improvements,” he said. “Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory.”

For more information, visit www.realtor.org.

Read more here.

Integrated Asset Services, which tracks troubled properties, says its House Price Index fell .2% in August. It’s the second down month in a row for the index, which saw a 2.8% rise in this year’s first quarter.

The slowdown, however slight, is ominous, says Dave McCarthy, president and CEO of Integrated Asset Services. That’s because there’s a “shadow inventory” of foreclosed properties that remain unlisted and unsold that could throw a monkey wrench in the housing recovery. “We know there’s a sizable inventory of bank-owned homes out there that will be listed at some point, and that could ignite a new wave of stress in the housing market,” McCarthy says.

According to Integrated, several of the nation’s hardest-hit areas may already be feeling the strain. The index reports two of the country’s most distressed counties—San Joaquin in California (Stockton) and Lee in Florida (Fort Myers)—both of which were down nearly 50% from their high-water marks, fell another 7% in August.

Integrated’s numbers are very similar to those reported by real estate info site Zillow.com. It’s numbers, released today, say housing prices nationally were down .1% in August, versus July. Zillow was only slightly less downbeat than Integrated on prices going forward. “Nationally, we may see September turn in a positive month-over-month change in home values but, thereafter, values are expected to start dropping again, and we expect them to keep dropping until sometime in the spring of this coming year, at which time we will have reached a true bottom in home values nationally,” Stan Humphries, the firm’s chief economist says.

Humphries is particularly concerned about the expiration of the $8,000 first time home buyer tax credits on Dec. 1. Without them, buyers may be less anxious to buy.

The Southern California market, which led the nation into the boom and the bust, is still showing signs of improvement, says researcher MDA DataQuick. September was the 15th month in a row with a year-over-year sales gain, although last month’s was the smallest of those increases, the company says.

The median price paid for a Southern California home was $275,000 last month, the same as in August and down 10.9 percent from $308,500 in September 2008. It was the smallest year-over-year decline since November 2007. The region’s overall sale price has held steady on a month-to-month basis since the 7-year low of $247,000 hit in April of this year. The median price peaked at $505,000 in mid-2007.

Source: BusinessWeek

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said. “We’re getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history.”

Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45% of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29% of transactions in September.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average,” McMillan said.

Total housing inventory at the end of September fell 7.5% to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0% below a year ago.

“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06% in September from 5.19% in August; the rate was 6.04% in September 2008. The national median existing-home price for all housing types was $174,900 in September, which is 8.5% lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales rose 9.4% to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7% above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1% below a year ago. Existing condominium and co-op sales jumped 9.7% to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7% above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7% from September 2008.

Northeast
Regionally, existing-home sales in the Northeast increased 4.4% to an annual level of 950,000 in September, and are 11.8% higher than September 2008. The median price in the Northeast was $234,700, down 7.0% from a year ago.

Midwest
Existing-home sales in the Midwest jumped 9.6% in September to a pace of 1.25 million and are 7.8% above a year ago. The median price in the Midwest was $147,600, which is 1.0% below September 2008.

South
In the South, existing-home sales rose 9.0% to an annual level of 2.06 million in September and are 10.8% higher than September 2008. The median price in the South was $153,500, down 7.6% from a year ago.

West
Existing-home sales in the West surged 13.0% to an annual rate of 1.30 million in September and are 5.7% above a year ago. The median price in the West was $219,000, which is 15.0% below September 2008.

For more information, visit www.realtor.org.

Source: RISMedia

Sixteen of the top 24 markets have had three or more consecutive months of month-over-month gains in home values. Three of the 24 markets have had six months of consecutive monthly gains: Boston, Denver and Pittsburgh. The top metro markets with the largest declines from peak levels are, in descending order: Las Vegas (-54%), Riverside (-52%), Phoenix (-47%), Miami (-44%), and Tampa (-41%).

As Zillow has noted before, it’s foreclosures that are likely to spoil the party soon. Home sales will begin to drop off now that the bulk of the 2009 home buying season is over, but foreclosures are increasing in most major metro markets.

Nationally, we may see September actually turn in a positive month-over-month change in home values but, thereafter, values are expected to start dropping again, and we expect them to keep dropping until sometime in the spring of this coming year, at which time we will have reached a true bottom in home values nationally.

For more details on the top metro markets during the month of August, click here.

Stan Humphries is the Chief Economist for Zillow.com.

For more information, visit www.zillow.com.

Source: RISMedia

Turns out, there’s a lot of truth to this idea. In 2006, at the height of the real estate bubble, homes in the bottom one-third of home values made up almost 55% of all foreclosures. Homes in the middle one-third of home values made up almost 29% of foreclosures and homes in the top one-third represented just 16% of foreclosures. In the accompanying chart, you can see the dramatic changes in the distribution of home values among foreclosed homes. In July 2009, the bottom one-third made up 35% of foreclosures, compared to 35% and 30% for the middle and top one-thirds, respectively. Those are shocking numbers: Thirty percent of foreclosures are homes in the top tier of local home values. That means that top-tier homes make up almost twice the proportion of foreclosures as they did just three years ago.

High delinquency rates in Prime, Alt-A and Option ARM mortgage products and declining cure rates (the rate at which borrowers resolve their delinquency status) are resulting in many more foreclosures among borrowers outside of the sub-prime mortgage market (and in higher priced segments of the market). Amherst Securities Group recently provided some data showing the higher delinquency rates for these products and the strong relationship between increased negative equity and decreased probability of resolving delinquency status (see their Exhibit 9, which shows, of borrowers who are 30 days delinquent, the percentage who become 60 days delinquent by their current loan-to-value ratios, where values greater than 100 indicate negative equity). As of the end of the second quarter of this year, Zillow estimated that 23% of single-family homes with mortgages are underwater on their mortgages, so expect cure rates to stay lower than they would be otherwise.

Methodology
Looking at the distribution of foreclosures by home value can be significantly distorted by the variances in home values across the country. For example, it might appear that high-end homes as a percentage of all foreclosures is quite high nationally, but the reality is simply that areas with lots of foreclosures happen to be areas where home prices are higher. In order to better isolate the distribution of foreclosures by price segment without introducing the geographic variability of home prices, we have examined home prices while controlling for the local price level of all homes.

Specifically, from all homes in the Zillow database with valuations (~70 million), Zillow computed the ratio between the current house value and the current level of the Zillow Home Value Index for the county in which the home is located. We then computed the 33rd and 66th percentiles of this ratio and assigned all homes to three price tiers: bottom (homes where the ratio was less than the 33rd percentile), middle (homes where the ratio was between the 33rd and 66th percentiles) and top (homes where the ratio was greater than the 66th percentile). We then extracted all foreclosures since 2000 and computed, by month, the percentage of foreclosures in the month represented by homes in each price tier.

Stan Humphries is the chief economist for Zillow.com.

For more information, visit www.zillow.com.

Source: RISMedia