Pending Home Sales Index Archives - First Preston HTFirst Preston HT

4March

New Home Sales Reach 2008 Highs

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Good news surrounding the housing market was released this week. It looks like the effects from abnormally cold weather hasn’t kept the housing market down as formerly suspected. January sales of new single-family homes was reported at a seasonally adjusted annual rate of 468,000 units. This number showed a huge jump in sales, surging to a 5 ½-year high since July 2008.

Previously reported, December home sales were down 7 percent from the month prior. This number was revised upwards from 414,000 to 427,000 sighting just above a 3 percent increase. This revision equates to only a 4 percent drop in new home sales in December showing that the housing market might not have been hit as hard by the cold temperatures as mentioned last week.

The 9.6 percent jump in new home sales in January exceeded what economists had forecast; 400,000 units. The Northeast, which has been bearing the brunt of the cold weather, actually recorded a 73.7 percent increase, hitting a seven month high. The South reported a five-year high sighting a 10.4 percent rise in sales. Sales in the Midwest dropped 17.2 percent and the West recorded an 11 percent increase.

New home sales numbers reported from the Commerce Department are based on signed contracts with the house being in any stage of construction. Existing home sales data is provided by the National Association of Realtors (NAR) and they report once the sales contract has closed. Given this difference, new home sales usually lead existing home sales by a month or two as it can take 30-60 days for a closing on a house to occur. Pending home sales, which are also reported on from time-to-time in this blog, overcome the lagging effect of existing home sales and center around existing home sales where the contract has been signed but not currently closed.

Housing prices still continue to ramp up. The Case-Shiller composite index reported a 0.8 percent increase in prices in December from the prior month, which was higher than economists predicted. Year-over-year, the index reported a 13.4 percent rise. Higher costs of labor and construction materials have been attributed to the increase in home prices.

As we move closer to the spring season it will be interesting what the trend in new home sales along with existing and pending home sales will be.

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3October

Home Sales Starting to Level Out

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Recent housing data show that the market might be cooling off. Weak housing figures reported in July gave the Fed one reason to continue its asset purchases without tapering. August reports from the Commerce Department last week showed a 7.9 percent increase from July in new single-family home sales. This equates to 421,000 annualized sales vs. 390,000 annualized sales reported in July. While this news in isolation seems to be hopeful, this figure fell marginally below economists’ expectations and is still near the lowest levels reported this year. After some have labeled this market a bubble, it seems it might have lost its hot air. Economist Patrick Newport from HIS Global Insight commented, “New home sales were up in August, but this market has lost momentum.”

Pending Home Sales slowed in August according to The National Association of Realtors (NAR). The Pending Home Sales Index declined 1.6 percent to 107.7 from 109.4 in July. Lawrence Yun, NAR chief economist said, “Sharply rising mortgage interest rates in the spring motivated buyers to make purchase decisions, culminating in a six-and-a-half-year peak for sales that were finalized last month. Moving forward, we expect lower levels of existing-home sales, but tight inventory in many markets will continue to push up home prices in the months ahead.” Some economists expect 2014 to see less than a 1 percent jump in sales.

While new home sales data appears to be decelerating, so do home prices. The median new home price in August dropped to $254,600. According to reports, the median price has been in decline since the month of May. Data on existing home sales prices released from NAR mirrored that of new home sale price numbers. The median price range is at $212,000 in August which is down from a median sales price of $213,500 in July. This is good news for homebuyers who have been looking for declining house prices, whether new or existing. Some industry leaders are predicting only a 5-6 percent rise in median existing home sales in 2014 with some improvement in inventory levels.

Mortgage rates are starting to fall again. The 30-year fixed mortgage rate was 4.5% and last week’s 30-year rate was 4.32 percent, according to Freddie Mac. The Fed’s decision to delay tapering could help mortgage rates to continue on the decline if the Fed unwinds its balance sheet slowly. Then homes sales might start to pick back up.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

Sources: http://www.freddiemac.com/pmms/
http://www.realtor.org/research-and-statistics/housing-statistics

29August

Mixed Signals in the Housing Market?

cedland
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The economy and the housing market seem to be at a cross roads right now with some economic indicators showing signs of growth and others showing signs of stalling or a slight retraction. It seems as though everyone is holding their breath to see if the Fed will decide to begin tapering this next month or continue its rounds of bond buying.

For the month of June, U.S. single-family home prices rose at a slightly slower pace than in previous months. The S&P/Case Shiller composite index which is comprised of 20 metro areas around the U.S. rose .9% on a seasonally adjusted basis. May’s number was a 1% increase. If you compare home prices year-over-year in June they jumped 12.1%. This is down slightly from May’s year over year jump of 12.2%. Could this be a signal the housing market is cooling?

On CNBC’s “Squawk on the Street”, Robert Shiller, Case-Shiller Index co-founder & Yale University professor of economics said on Tuesday, “Obviously we’re in a housing recovery, at least for the short term…Housing is a market with momentum and right now, the momentum is up…In the single family realm, I think that there is a chance that there is a weakening and there is all this fear about the tapering… The housing market has gotten very speculative and it goes through big cycles…It’s a roller-coaster, that’s what these markets have become.”

Home prices are still up double digits from a year ago but home sales show a more mixed picture of the housing market. Last week the new homes sales figure dropped 13.4% in July to its lowest level in 9 months. This was well below economists’ expectations and could be attributed to the increase in mortgage rates over the last few months. However, existing home sales for July were strong and jumped 6.5% from June according to Mortgage News Daily. Pending home sales index showed signs of weakness; it fell 1.3% from June to July. This could be a foreshadowing of weaker home sale closures in the next few months.

Chief economist of the National Association of Realtors (NAR), Lawrence Yun, commented on these recent housing market figures. “The modest decline in sales is not yet concerning, and contract activity remains elevated, with the South and Midwest showing no measurable slowdown. However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the Northeast and the West.”

The month of September should give a clearer understanding of the direction of this current housing market. Until these next figures are released, it seems that the housing market will try to decide whether it’s still in a bull market.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

Sources: http://www.mortgagenewsdaily.com/data/home-sales-existing.aspx

http://www.cnbc.com/id/100993579

http://www.cnbc.com/id/100988918

7February

Pending Home Sales Index | Reduced Inventory = Less Signings | January 2013

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Although the January 2013 Pending Home Sales Index report indicates a slight reduction in pending home sales for the month of December 2012, figures have nevertheless remained higher than last year’s numbers.

Pending Home Sales Index

Reduced Inventory = Less Signings

According to Lawrence Yun, an economist for the National Association of Realtors (NAR), reduced inventory is to blame for the small decline in contract signings in December. For instance, homes in the less-than-$100,000 price range are becoming hard to find in most areas of the country, and although the inventory is expected to rise slightly in spring, the market sentiment appears to be turning to the side of sellers.

Still, as the inventory shrinks slightly, demand for homes has remained high, and it’s because of this that Yun estimates a 9 percent increase in 2013 home sales to match 2012’s 9 percent increase.

Other PHSI Figures

Here are some other important figures shared in the PHSI according to the NAR report:

Pending home sales index percentage in the Northeast fell by 5.4 percent in December 2012, but remains higher than December 2011.
Index rose in the Midwest by 0.9 percent in December, 14.4 percent above last year.
Pending home sales index numbers in the South declined 4.5 percent to 111.5 in December, yet are over 10 percent higher than a year ago.
The index fell 8.2 percent in the West for December and is the only one showing a decline from last year as well.

The Pending Home Sales Index takes a sample of about 20 percent of existing home sales across the country to measure the state of the market each month. Pending home sales are sales in which contracts have been signed but a closing has not yet occurred. The monthly report is one of the important indicators of how the market is faring in the U.S.

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December 2013 Pending Home Sales (Will Link When Published)