homesmillbrae.com » Economist Lawrence

US Pending Home Sales Tick Upward in March

Tue, 30 Apr 2013 06:54:53 +0000

“Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply,” said Realtors chief economist Lawrence Yun in a release. “Little movement is expected in the near-term sales closings, but they should edge up modestly as the year progresses.

(Read More: Despite Rising Demand, Some Builders Slow Production)

Listings were down 17 percent in March from a year earlier, according to the association, with several factors affecting inventories. Millions of Americans still owe more on their mortgages than their homes are worth, and that makes it impossible for them to move without incurring major expense.

Others are watching home prices rise and may be waiting to see just how high they go before listing their homes.

Meanwhile, home builders, while trying to ramp up production, are faced with a lack of land, labor and materials. Single-family starts were at a seasonally adjusted annual rate of just 619,000 units, an improvement from the worst of the crash but far below historical norms.

(Read More: Map: Tracking the US Real Estate Recovery)

Regionally, the pending home sales index was unchanged in the Northeast from February, up 0.3 percent in the Midwest, up 2.7 percent in the South and up 1.5 percent in the West.

Existing home sales in March, based on closings, fell just under one percent in March. While higher than a year ago, home sales appear to have leveled off, despite this being the normally busy spring season.

(Read More: Government Mortgage Fix Is Failing)

Article source: http://www.cnbc.com/id/100683911

Pending Home Sales Barely Budge in September

Fri, 26 Oct 2012 19:36:09 +0000

In a sign of a still struggling housing market, signed contracts to buy existing homes were essentially flat in September from August, edging up just 0.3 percent according to a monthly index from the National Association of Realtors.

The index is 14.5 percent above September of 2011. Closings, the final stage of an existing home sale, fell in September, with Realtors continuing to cite tight credit as a headwind to recovery.

“Home contract activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range,” wrote NAR’s chief economist Lawrence Yun in a release. “This means only minor movement is likely in near-term existing-home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013.”

Contract activity has increased on an annual basis for seventeen straight months, but is fluctuating month to month and region to region. The Realtors’ index of so-called pending home sales rose 1.4 percent month-to-month in the Northeast, fell 5.8 percent in the Midwest, rose 1 percent in the South and rose 4.3 percent in the West. The western region, which includes some of the hardest hit states of the housing crash, was the only region to see nearly flat gains from a year ago. That is do to low supplies of distressed properties.

(Read More: Is There a Housing Shortage?)

Investors have focused their attention and cash on formerly hard hit cities like Phoenix, Las Vegas and several California cities.

The National Association of Realtors estimates that completed existing home sales in 2012 will total close to 4.6 million, an increase of 9 percent from 2011. Lower housing inventories, they also predict, should push existing home prices up 6 percent this year nationally.

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/49551005?__source=RSS*blog*&par=RSS

After Brisk Summer, Pending Home Sales Drop in August

Fri, 28 Sep 2012 06:01:36 +0000

Fewer Americans signed contracts to buy existing homes in August. After gains in home sales over the spring and summer, an industry survey surprised expectations, registering a 2.6 percent drop in pending home sales from July. This drop forecasts that final closings on existing homes will be lower heading into fall.

“The performance in month-to-month contract signings has been uneven with ongoing shortages of lower priced inventory in much of the country, and across most price ranges in the West, but activity has remained at notably higher levels this year,” wrote National Association of Realtors’ chief economist Lawrence Yun in a release.
Yun pointed out that contract signings have been up year-over-year for sixteen consecutive months, which indicates overall home sales will be higher in 2012 than 2011. The Realtors predict a 9 percent gain to 4.64 million units.

Regionally, pending home sales rose slightly in the Northeast, up 0.9 percent month-to-month, but fell 2.6 percent in the Midwest, 1.1 percent in the South, and really plummeted out West, down 7.2 percent.

The drop in the West is largely due to a supply issue on the low end of the market. Investors have been fueling the low end with all-cash, bulk purchases of foreclosures in markets like Phoenix, Las Vegas, and parts of Southern California. Supplies of those homes have dropped dramatically, leaving little for those investors to buy.

Some housing analysts are concerned that the housing recovery so far has been driven so much by all-cash investors that as these supplies dwindle, due to continuing bank delays and more loan modifications, the overall home sales numbers will drop going into the end of the year.

New home sales for August also disappointed, coming in lower than expected. New home sales are measured by signed contracts, rather than closings.

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Article source: http://www.cnbc.com/id/49193922?__source=RSS*blog*&par=RSS

Pending Home Sales Beat Expectations in July

Wed, 29 Aug 2012 21:07:57 +0000

Despite expectations of a drop-off in home sales this fall, a forward-looking indicator shows a growing number of buyers are jumping back into the housing market.

The National Association of Realtors’ Pending Home Sales Index rose 2.4 percent in July from June and is now 12.4 percent higher than it was a year ago. This index, which measures signed contracts to buy existing homes, is now at its highest level since April of 2010, just before the end of the home buyer tax credit.
“While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity,” said the Realtors’ chief economist, Lawrence Yun.

All regions saw gains in signed contracts for the West, where the bulk of the distress in the housing market has been. Foreclosures have been in high demand from investors, who are looking to cash in on the hot single family rental market.

That demand has pushed home prices higher in markets like Phoenix, Ariz., but it has also pushed supplies far lower. Yun said the West is now experiencing an, “acute inventory shortage.”

The association is projecting existing home sales to rise 8 to 9 percent in 2012 with another 7 to 8-percent gain in 2013. Analysts are split as to whether growing demand for housing will result in more home purchases or continued growth in the rental market. Credit remains tight, and many potential move-up buyers still owe more on their mortgages than their homes are currently worth.

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Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48826211?__source=RSS*blog*&par=RSS

If Mortgage Rates Keep Falling, Why Are Home Sales So Bad?

Sat, 28 May 2011 05:12:48 +0000

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As mortgage rates continue to fall, so too are home sales. That wouldn’t make sense in a normal housing market, but these are very unique times.

Credit, or lack thereof, coupled with extremely weak consumer confidence is keeping potential buyers on the fence.

Contracts to purchase existing homes plunged a far weaker-than-expected 11.6 percent in April, the heart of the spring housing season.

The National Association of Realtors’ Pending Home Sales Index is now 26 percent below its cyclical high in April of 2010, which was the deadline for the now-expired home buyer tax credit.

“The pullback in contract signings is disappointing and implies a slower than expected market recovery in upcoming months,” said NAR chief economist Lawrence Yun.

The drop in new contracts comes as mortgage rates continue to fall, just last week to the lowest level of the year so far. Freddie Mac reported 4.60 percent on the 30-year fixed, but analysts say even that’s not enough to move this tough housing market.

“Because mortgage rates have been so historically low for so long, the law of diminishing of returns has set in with respect to the low rates being the main influence and catalyst in purchasing a home,” says Peter Boockvar of Miller Tabak.

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Article source: http://www.cnbc.com/id/43193955?__source=RSS*blog*&par=RSS

Market Scoffs at Pitiful Home Sales

Tue, 22 Mar 2011 02:20:48 +0000

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Call me crazy, but I thought a near 10 percent monthly drop in existing home sales might affect the markets today. If not the sales, then maybe the 5.2 percent annual price drop, or the rise in inventories to an 8.6 month supply. Nope. Apparently that’s not bad news to financials today.

Even the Realtors couldn’t sugar-coat this one, with chief economist Lawrence Yun calling it a “setback” in the monthly press conference and later telling me, “The traditional buyers who are looking for a new home, whether because of changes in family circumstances, job relocation, they are not making that move. And the tightness of the credit can still be attributed to that.”

Credit is tight, but no tighter than it has been for a few years now. Yes, FHA loans (loans geared to lower income borrowers and insured by the Federal Housing Administration which requires a small down payment) are more expensive, but the low end of the market, where we might find more FHA borrowers, is actually improving, while the middle of the market is stuck. In addition, the percentage of all-cash buyers rose to an all-time high of 33 percent.

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Article source: http://www.cnbc.com/id/42196413?__source=RSS*blog*&par=RSS