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This Month in Housing News




Since January, existing home sales have fallen 13.5 percent. Single-family home sales were down 4 percent in July to 4.12 million units, but condominium and co-op sales remained unchanged at 550,000 units.

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National Association of Realtors reported sales of existing homes fell to 4.67 million in July from an upwardly revised 4.84 million in June-a decline of 3.5 percent. The decline in existing homes sales in July was expected; however, it was a departure from the pending homes sales index, which tracks contracts signed and typically leads existing home sales (closed sales) by one or two months.

PHSI has risen over the past two months, thus an increase in existing home sales would typically be expected. NAR suggest that contract failures, caused by declined mortgage applications or failures in loan underwriting, are a major factor in this divergence and indicate that 16 percent of NAR members reported contract cancellations in the past month.

Housing Affordability Near Record Levels

Nationwide housing affordability is hovering near record levels, according to the latest NAHB/Wells Fargo Housing Opportunity Index data. The HOI indicated that 72.6 percent of all new and existing homes sold in the second quarter of the year were affordable to families earning the national median income of $64,200.

House Prices Improving, But Results Are Mixed

The quarterly Federal Housing Finance Agency purchase-only house price index continued to fall in the second quarter, despite recent improvement in the monthly HPI. According to FHFA, U.S. house prices were 0.6 percent lower in the second quarter than the first quarter of 2011 and down 5.9 percent on a year-over-year basis.

New Home Sales Remain Unchanged

Census Bureau reported the annual rate of new home sales remained virtually unchanged in July at 298,000 down less than 1 percent from the revised June level of 300,000. The July rate puts sales right in the middle of the recent past.

The average for the first half of 2011 was 303,500 while the average for the last half of 2010 was 295,500. There was an unusually large increase in sales in the Northeast, doubling sales from June to July but June was a 38 year low and July was a more modest 24 percent greater than the first half of 2011.

National Association of Realtors reported sales of existing homes fell to 4.67 million in July from an upwardly revised 4.84 million in June-a decline of 3.5 percent.

Across the regions, sales gains in the Northeast (up 2.7 percent to an annual pace 750,000 units) and Midwest (rising 1 percent to 1.05 million units), were offset by declines in the South (down 1.6 percent to 1.84 million) and the West (falling 12.6 percent to 1.04 million units).

The housing inventory at the end of July was 3.65 million, down 1.7 percent. This represents a 9.4-month supply at the current sales rate.

The parallel NAR practitioner survey indicates that the share of distressed sales - foreclosures and short sales typically sold at deep discounts -trended lower, accounting for 29 percent of sales in July, compared with 30 percent in June and 39 percent in March.

Investors' share of home sales continued to slide, dropping back to 18 percent in July from 19 percent in June and 23 percent in January 2011. Investors' share had been rising steadily and supporting home sales earlier in the year, but it appears that investors are becoming increasing cautious in the weakening economic climate.

The decline in existing homes sales in July was expected; however, it was a departure from the pending homes sales index, which tracks contracts signed and typically leads existing home sales (closed sales) by one or two months.

PHSI has risen over the past two months, thus an increase in existing home sales would typically be expected. NAR suggest that contract failures, caused by declined mortgage applications or failures in loan underwriting, are a major factor in this divergence and indicate that 16 percent of NAR members reported contract cancellations in the past month.

- Courtesy of NAHB


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December 14, 2019, 7:56 am PDT

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