Prices of “normal” homes—those that aren’t foreclosures or short sales—are stabilizing and the numbers of future foreclosures are falling. That “sliver of good news for consumer spending” was included in CoreLogic’s July report on housing and market trends.
In May 2011, the firm’s Home Price Index excluding distressed sales only dropped 0.4 percent from a year ago, compared to a decline of 7.4 percent for the all transactions measured by the HPI. Even while including distressed sales, the HPI increased between March and April —the first time in more than six months—and was up again between April and May.
“These increases represent the resumption of seasonality in home prices and are a positive sign for the market. When disaggregating median prices by type of sale for the first complete month of the spring home buying season, it is clear that despite the whipsaw impact of the federal homebuyer tax credit, state homebuyer tax credits and increases in FHA premiums, non-distressed median existing and new prices are back to 2009 levels,” the report said.
Although the distressed sales share remains high, the geographical sources of distress are shifting and becoming more dispersed. As of December 2008, four of the top five largest distressed sales markets were all located in California, and the top five markets averaged a distressed sale share of 68 percent. As of April 2011, only two of the top five markets are in California and, more importantly, the top five average distressed share was 56 percent — a 12 percentage point decline relative to top markets in late 2008.
Friday, July 29, 2011
Wednesday, July 20, 2011
NAHB Applauds EPA Rejection of Renovation Clearance Testing Requirements
The National Association of Home Builders commends the U.S. Environmental Protection Agency for rejecting a proposal to add third-party clearance testing to the Lead: Renovation, Repair and Painting Rule (RRP).
“We’re pleased that the EPA listened to the concerns of remodelers about the extreme costs the proposed clearance testing would have imposed,” says Bob Peterson, NAHB Remodelers chair and a remodeler from Fort Collins, Colo. “Home owners are saved from spending a great deal of money on lead testing. If remodeling is more affordable, home owners will be able to hire an EPA-certified renovator to keep them safe from lead dust hazards during renovation.”
At NAHB’s request this regulation was selected for review by the EPA under the Presidential Executive Order for Regulatory Review (Improving Regulation and Regulatory Review, 76 FR 3821 issued on Jan. 21) concerning the impact of federal rules on small businesses and job creation.
The lead rule applies to homes built before 1978 and requires renovator training and certification, following lead-safe work practices, containing and cleaning dust, and record keeping.
Under the lead paint rule contractors have been required to wipe down the project area after completing remodeling or renovation work and match the result to an EPA-approved card to determine whether lead paint dust is still present—a process that EPA says is “effective at reducing dust lead levels below the dust-lead hazard standard.”
The proposal would have required contractors to hire EPA-accredited dust samplers to collect several samples after a renovation and send them to an EPA-accredited lab for lead testing. Because of the cost of this as well as the waiting period for test results and the limited number of accredited labs nationwide, professional remodelers were very concerned about home owners’ willingness to undergo the process.
“The EPA has maintained its common sense approach to keeping families safe during renovation,” says Peterson. “Hiring trained professional remodelers to contain dust, use lead-safe work practices, and clean up has been shown to successfully minimize lead hazards and protect individuals from lead exposure.”
Several problems with the rule still remain. The EPA has yet to recognize an efficient, low-cost lead test kit that meets the requirements of the regulation. And last year the agency removed a key consumer choice measure—the opt-out provision—which allowed homeowners with no children or pregnant women in residence to waive the rule’s requirement. In this down economy, consumers are still balking at the extra costs of the rule and often choose to reduce the amount of work done on their homes, hire uncertified contractors, or endanger themselves by attempting the work themselves.
For more information, visit www.nahb.org.
“We’re pleased that the EPA listened to the concerns of remodelers about the extreme costs the proposed clearance testing would have imposed,” says Bob Peterson, NAHB Remodelers chair and a remodeler from Fort Collins, Colo. “Home owners are saved from spending a great deal of money on lead testing. If remodeling is more affordable, home owners will be able to hire an EPA-certified renovator to keep them safe from lead dust hazards during renovation.”
At NAHB’s request this regulation was selected for review by the EPA under the Presidential Executive Order for Regulatory Review (Improving Regulation and Regulatory Review, 76 FR 3821 issued on Jan. 21) concerning the impact of federal rules on small businesses and job creation.
The lead rule applies to homes built before 1978 and requires renovator training and certification, following lead-safe work practices, containing and cleaning dust, and record keeping.
Under the lead paint rule contractors have been required to wipe down the project area after completing remodeling or renovation work and match the result to an EPA-approved card to determine whether lead paint dust is still present—a process that EPA says is “effective at reducing dust lead levels below the dust-lead hazard standard.”
The proposal would have required contractors to hire EPA-accredited dust samplers to collect several samples after a renovation and send them to an EPA-accredited lab for lead testing. Because of the cost of this as well as the waiting period for test results and the limited number of accredited labs nationwide, professional remodelers were very concerned about home owners’ willingness to undergo the process.
“The EPA has maintained its common sense approach to keeping families safe during renovation,” says Peterson. “Hiring trained professional remodelers to contain dust, use lead-safe work practices, and clean up has been shown to successfully minimize lead hazards and protect individuals from lead exposure.”
Several problems with the rule still remain. The EPA has yet to recognize an efficient, low-cost lead test kit that meets the requirements of the regulation. And last year the agency removed a key consumer choice measure—the opt-out provision—which allowed homeowners with no children or pregnant women in residence to waive the rule’s requirement. In this down economy, consumers are still balking at the extra costs of the rule and often choose to reduce the amount of work done on their homes, hire uncertified contractors, or endanger themselves by attempting the work themselves.
For more information, visit www.nahb.org.
Friday, July 15, 2011
Coldwell Banker Real Estate Issues International Housing Report
Coldwell Banker Real Estate LLC recently released a report on international housing markets, which compares similar four-bedroom, two-bathroom homes in 30 countries and more than 60 markets outside the United States and Canada.
Among the more affluent markets in the report is Neuilly-sur-Seine, France, located just four miles from the center of Paris and is the hometown of Nicolas Sarkozy, the current President of the French Republic. The city also serves as the headquarters for the global edition of The New York Times newspaper and The International Herald Tribune. A continent away in the opposite hemisphere, the tourist city of Salinas, Ecuador, is one of the many markets offering great affordability. It is also known for its proximity to the Pacific Ocean and year-round temperatures averaging 80 degrees Fahrenheit.
“As one of the world’s premier international real estate companies, Coldwell Banker has the pulse on what is happening in various global markets,” says Budge Huskey, president and chief operating officer, Coldwell Banker Real Estate LLC. “Increasingly we have seen that buyers are expanding their horizons when it comes to the number of countries under consideration for their investment.”
In addition to Salinas and Neuilly-sur-Seine, the Coldwell Banker report highlights some of the world’s most prominent cities, full of fun trivia and charming local facts:
• Paris, France, has been ranked as one of the top three European cities of the future by The Financial Times and produces more than one fourth of France’s total gross domestic product.
• Madrid, Spain, is the third largest city in the European Union and is considered the major financial center of Southern Europe.
• Rome is the capital and most populated city of Italy and has been ranked as one of the world’s 15 most important cities.
• Amsterdam is the financial and cultural capital of the Netherlands and home to seven Fortune 500 companies including ING Group and Royal Philips Electronics.
• Dublin houses more than one-quarter of the entire population of Ireland and is ranked 29th in the Global Financial Centres Index.
• Aruba is renowned for its white, sandy beaches, temperate waters and warm climate moderated by the trade winds of the Atlantic Ocean.
• Istanbul is the cultural, economic, and financial center of Turkey and at one time served as the capital of the Roman and Ottoman Empires.
• Mexico City, Mexico, is the country’s most important political, cultural, educational and financial center and boasts one of the world’s fastest growing economies with a gross domestic product expected to double by 2020.
The release of this international data follows the recent Coldwell Banker Home Listing Report, a comprehensive analysis of real estate markets throughout the U.S. and Canada. Additional information on the North American report can be found on the Coldwell Banker Home Listing Report website.
Among the more affluent markets in the report is Neuilly-sur-Seine, France, located just four miles from the center of Paris and is the hometown of Nicolas Sarkozy, the current President of the French Republic. The city also serves as the headquarters for the global edition of The New York Times newspaper and The International Herald Tribune. A continent away in the opposite hemisphere, the tourist city of Salinas, Ecuador, is one of the many markets offering great affordability. It is also known for its proximity to the Pacific Ocean and year-round temperatures averaging 80 degrees Fahrenheit.
“As one of the world’s premier international real estate companies, Coldwell Banker has the pulse on what is happening in various global markets,” says Budge Huskey, president and chief operating officer, Coldwell Banker Real Estate LLC. “Increasingly we have seen that buyers are expanding their horizons when it comes to the number of countries under consideration for their investment.”
In addition to Salinas and Neuilly-sur-Seine, the Coldwell Banker report highlights some of the world’s most prominent cities, full of fun trivia and charming local facts:
• Paris, France, has been ranked as one of the top three European cities of the future by The Financial Times and produces more than one fourth of France’s total gross domestic product.
• Madrid, Spain, is the third largest city in the European Union and is considered the major financial center of Southern Europe.
• Rome is the capital and most populated city of Italy and has been ranked as one of the world’s 15 most important cities.
• Amsterdam is the financial and cultural capital of the Netherlands and home to seven Fortune 500 companies including ING Group and Royal Philips Electronics.
• Dublin houses more than one-quarter of the entire population of Ireland and is ranked 29th in the Global Financial Centres Index.
• Aruba is renowned for its white, sandy beaches, temperate waters and warm climate moderated by the trade winds of the Atlantic Ocean.
• Istanbul is the cultural, economic, and financial center of Turkey and at one time served as the capital of the Roman and Ottoman Empires.
• Mexico City, Mexico, is the country’s most important political, cultural, educational and financial center and boasts one of the world’s fastest growing economies with a gross domestic product expected to double by 2020.
The release of this international data follows the recent Coldwell Banker Home Listing Report, a comprehensive analysis of real estate markets throughout the U.S. and Canada. Additional information on the North American report can be found on the Coldwell Banker Home Listing Report website.
Thursday, July 7, 2011
Mortgage Marvel Rate Trends Shows Jump in 30-Year Fixed Rates
Mortgage Marvel Rate Trends™, a daily survey of over 950 lenders, shows 30-year, fixed rates bouncing up 0.15% to 4.78% after setting a new six-month low last week.
With the increase in rates over the past week, 30-year fixed rates are 0.44% lower than the 6-month high of 5.22% achieved on February 10, 2011 and 0.58% above the ever-to-date low of 4.20% reached October 12, 2010.
Fifteen-year fixed rates also jumped, but to a lesser degree than the 30-year fixed, ending the week at 3.93% as compared to last week’s 3.85%. The increase in 5/1 ARM rates matched that of the 30-year fixed rate, jumping 0.16% to end the week at 3.80%. The rates for 30-year, fixed rate jumbo loans (typically loans over $417,000) increased just 0.03% to 5.48% this week from 5.45% last week.
With the increase in rates over the past week, 30-year fixed rates are 0.44% lower than the 6-month high of 5.22% achieved on February 10, 2011 and 0.58% above the ever-to-date low of 4.20% reached October 12, 2010.
Fifteen-year fixed rates also jumped, but to a lesser degree than the 30-year fixed, ending the week at 3.93% as compared to last week’s 3.85%. The increase in 5/1 ARM rates matched that of the 30-year fixed rate, jumping 0.16% to end the week at 3.80%. The rates for 30-year, fixed rate jumbo loans (typically loans over $417,000) increased just 0.03% to 5.48% this week from 5.45% last week.
Thursday, June 30, 2011
Pending Home Sales Turn Around in May
Pending home sales rose strongly in May with all regions experiencing gains from a year ago, pointing to higher housing activity in the second half of the year, according to the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 8.2 percent to 88.8 in May from an upwardly revised 82.1 in April and is 13.4 percent higher than the 78.3 reading in May 2010. The data reflects contracts but not closings, which normally occur with a lag time of one or two months.
This is the first time since April 2010 that contract activity was above year-ago levels, and the monthly gain was the strongest increase since last November when the index rose 10.6 percent.
Lawrence Yun, NAR chief economist, said the improvement bodes well for home prices. “Absorption of inventory is the key to price improvement, and this solid gain in contract signings implies that home values in many localities are or will soon be stabilizing as inventories get absorbed at a faster pace,” he said. “Some markets have made a rapid turnaround, going from soft activity to contract signings rising by more than 30 percent from a year ago, including areas such as Hartford, Conn.; Indianapolis; Minneapolis; Houston; and Seattle.”
Pending home sales have trended up unevenly since bottoming last June, rising in seven of the past 11 months. “Home sales still could be 15 to 20 percent higher,” Yun said. “If banks would simply return to normal sound underwriting standards and begin lending to more creditworthy borrowers, we’d get a much faster recovery in the housing sector.”
“In addition, a nonsensical situation has developed recently in some states with HUD unable to complete foreclosure deals because of insufficient funds to pay attorney fees at closing, even with buyers offering the full listing price,” Yun added.
Yun cautioned that healthy job creation is necessary to ensure a solid recovery in both housing and the overall economy. “The job market has sputtered recently, and because variations in local job creation impact housing demand, markets will recover unevenly around the country,” he said.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 8.2 percent to 88.8 in May from an upwardly revised 82.1 in April and is 13.4 percent higher than the 78.3 reading in May 2010. The data reflects contracts but not closings, which normally occur with a lag time of one or two months.
This is the first time since April 2010 that contract activity was above year-ago levels, and the monthly gain was the strongest increase since last November when the index rose 10.6 percent.
Lawrence Yun, NAR chief economist, said the improvement bodes well for home prices. “Absorption of inventory is the key to price improvement, and this solid gain in contract signings implies that home values in many localities are or will soon be stabilizing as inventories get absorbed at a faster pace,” he said. “Some markets have made a rapid turnaround, going from soft activity to contract signings rising by more than 30 percent from a year ago, including areas such as Hartford, Conn.; Indianapolis; Minneapolis; Houston; and Seattle.”
Pending home sales have trended up unevenly since bottoming last June, rising in seven of the past 11 months. “Home sales still could be 15 to 20 percent higher,” Yun said. “If banks would simply return to normal sound underwriting standards and begin lending to more creditworthy borrowers, we’d get a much faster recovery in the housing sector.”
“In addition, a nonsensical situation has developed recently in some states with HUD unable to complete foreclosure deals because of insufficient funds to pay attorney fees at closing, even with buyers offering the full listing price,” Yun added.
Yun cautioned that healthy job creation is necessary to ensure a solid recovery in both housing and the overall economy. “The job market has sputtered recently, and because variations in local job creation impact housing demand, markets will recover unevenly around the country,” he said.
Wednesday, June 22, 2011
Housing Starts Gain 3.5 Percent in May
Nationwide housing starts rose 3.5 percent to a seasonally adjusted annual pace of 560,000 units in May, according to newly released figures from the U.S. Commerce Department. The gain partially offsets a larger decline that was registered in April.
“While the upward movement registered in today’s report is somewhat good news, housing production continues to bounce along the bottom near historic lows, and is only running at a level necessary to replace dilapidated or destroyed units,” says Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. He also noted that “Amidst this fragile marketplace, the nation’s policymakers should be aware of a recent poll that confirms the strong value that most American voters continue to place on homeownership and housing choice.”
Conducted this May on behalf of NAHB by Public Opinion Strategies of Alexandria, Va., and Lake Research Partners of Washington, D.C., the poll asked 2,000 likely voters about their attitudes on homeownership and housing policy. It found that the vast majority of current home owners are happy with their decision to own a home and believe that owning their own home is important, while nearly three-quarters of those who do not now own a home consider it a goal of theirs to eventually buy one. Additionally, the poll determined that 73 percent of owners and renters believe the federal government should provide tax incentives to promote homeownership. Details on this poll are available at www.nahb.org/voterpoll.
“Like consumers, builders remain very concerned about the pace of economic growth and are awaiting signs of improvement before moving forward with new projects,” notes NAHB Chief Economist David Crowe. “The relative bright spot in new-home construction is on the multifamily side, where improving demand for rental apartments is spurring gains in that sector. However, access to construction credit remains a limiting factor for new building.”
Single-family housing starts rose 3.7 percent to a seasonally adjusted annual rate of 419,000 units in May—their strongest pace since this January. Multifamily starts rose 2.9 percent to a 141,000-unit rate in May.
Regionally, housing production rose 1.5 percent in the South and 18.1 percent in the West, but declined 3.3 percent in the Northeast and 4.1 percent in the Midwest in May.
Issuance of building permits, which can be an indicator of future building activity, rose 8.7 percent to a seasonally adjusted annual rate of 612,000 units in May. This was the strongest pace since December of 2010. Single-family permits were up 2.5 percent to a 405,000-unit rate, while multifamily permits rose 23.2 percent to 207,000-units—their best pace since October of 2008.
Permit issuance posted double-digit gains in the Northeast and West in May, rising 35.6 percent and 15.1 percent, respectively. The South also posted a gain, of 3.5 percent, while the Midwest registered a 1.1 percent decline.
For more information, please visit www.NARB.org.
“While the upward movement registered in today’s report is somewhat good news, housing production continues to bounce along the bottom near historic lows, and is only running at a level necessary to replace dilapidated or destroyed units,” says Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. He also noted that “Amidst this fragile marketplace, the nation’s policymakers should be aware of a recent poll that confirms the strong value that most American voters continue to place on homeownership and housing choice.”
Conducted this May on behalf of NAHB by Public Opinion Strategies of Alexandria, Va., and Lake Research Partners of Washington, D.C., the poll asked 2,000 likely voters about their attitudes on homeownership and housing policy. It found that the vast majority of current home owners are happy with their decision to own a home and believe that owning their own home is important, while nearly three-quarters of those who do not now own a home consider it a goal of theirs to eventually buy one. Additionally, the poll determined that 73 percent of owners and renters believe the federal government should provide tax incentives to promote homeownership. Details on this poll are available at www.nahb.org/voterpoll.
“Like consumers, builders remain very concerned about the pace of economic growth and are awaiting signs of improvement before moving forward with new projects,” notes NAHB Chief Economist David Crowe. “The relative bright spot in new-home construction is on the multifamily side, where improving demand for rental apartments is spurring gains in that sector. However, access to construction credit remains a limiting factor for new building.”
Single-family housing starts rose 3.7 percent to a seasonally adjusted annual rate of 419,000 units in May—their strongest pace since this January. Multifamily starts rose 2.9 percent to a 141,000-unit rate in May.
Regionally, housing production rose 1.5 percent in the South and 18.1 percent in the West, but declined 3.3 percent in the Northeast and 4.1 percent in the Midwest in May.
Issuance of building permits, which can be an indicator of future building activity, rose 8.7 percent to a seasonally adjusted annual rate of 612,000 units in May. This was the strongest pace since December of 2010. Single-family permits were up 2.5 percent to a 405,000-unit rate, while multifamily permits rose 23.2 percent to 207,000-units—their best pace since October of 2008.
Permit issuance posted double-digit gains in the Northeast and West in May, rising 35.6 percent and 15.1 percent, respectively. The South also posted a gain, of 3.5 percent, while the Midwest registered a 1.1 percent decline.
For more information, please visit www.NARB.org.
Wednesday, June 15, 2011
Homeownership Dream Deserves Protection
The homeownership rate dropped to 66.4 percent in April 2011, the lowest it’s been since 1998, according to the U.S. Census Bureau. Some would argue this means owning a home is not as important to Americans as it once was—but they’re wrong.
What it really means is that the artificially stimulated level of 69 percent in 2005 wasn’t sustainable. Today’s level is merely a return to a more normal rate.
The dream of homeownership is as strong as ever, and it deserves protection—not more regulatory roadblocks.
Understandably, government leaders are looking at ways to avoid another housing crisis, but prohibitive down payments and elimination of the Mortgage Interest Deduction (MID) are two highly detrimental steps in the wrong direction at the worst time.
Consumer confidence took a considerable hit during the past few years, and its gradual recovery is still very fragile.
An unprecedented number of recent and current homeowners has been rocked by the downturn—and prospective buyers are shaken on the sidelines. But there hasn’t been so much damage that people have abandoned their dream of owning a home.
According to a Pew Research Center study conducted in April, 81 percent of adults surveyed either somewhat agree or strongly agree that buying a home is the best long-term investment a person can make. Of homeowners whose homes have lost value during the downturn, 82 percent still favor owning a home. And 81 percent of renters aspire to own a home in the future.
These survey results are compelling enough, coming straight from consumers. But in case there’s any doubt about whether there’s still an interest in buying, recent home sales and pricing data show that buyer activity is picking up.
In all 54 metro areas tracked, home sales increased by no less than 9 percent from February to March 2011—the third-straight month of gains. And 35 of those markets also experienced price increases. Would we see these results without increased buyer demand? Of course not.
Investor activity has picked up considerably over the past six-plus months, with 22 percent of home sales linked to this influential buyer group. But investing alone can’t be expected to absorb the millions of foreclosed properties yet to be released to the market.
Right now, government leaders should focus on ways to keep qualified buyers motivated. Not everyone will purchase a home, but those who save and prepare should know, absolutely, that it’s attainable.
What it really means is that the artificially stimulated level of 69 percent in 2005 wasn’t sustainable. Today’s level is merely a return to a more normal rate.
The dream of homeownership is as strong as ever, and it deserves protection—not more regulatory roadblocks.
Understandably, government leaders are looking at ways to avoid another housing crisis, but prohibitive down payments and elimination of the Mortgage Interest Deduction (MID) are two highly detrimental steps in the wrong direction at the worst time.
Consumer confidence took a considerable hit during the past few years, and its gradual recovery is still very fragile.
An unprecedented number of recent and current homeowners has been rocked by the downturn—and prospective buyers are shaken on the sidelines. But there hasn’t been so much damage that people have abandoned their dream of owning a home.
According to a Pew Research Center study conducted in April, 81 percent of adults surveyed either somewhat agree or strongly agree that buying a home is the best long-term investment a person can make. Of homeowners whose homes have lost value during the downturn, 82 percent still favor owning a home. And 81 percent of renters aspire to own a home in the future.
These survey results are compelling enough, coming straight from consumers. But in case there’s any doubt about whether there’s still an interest in buying, recent home sales and pricing data show that buyer activity is picking up.
In all 54 metro areas tracked, home sales increased by no less than 9 percent from February to March 2011—the third-straight month of gains. And 35 of those markets also experienced price increases. Would we see these results without increased buyer demand? Of course not.
Investor activity has picked up considerably over the past six-plus months, with 22 percent of home sales linked to this influential buyer group. But investing alone can’t be expected to absorb the millions of foreclosed properties yet to be released to the market.
Right now, government leaders should focus on ways to keep qualified buyers motivated. Not everyone will purchase a home, but those who save and prepare should know, absolutely, that it’s attainable.
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