Jan 24, 2012 | Housing Analysis
The housing market finished 2011 with strength, and is carrying measurable momentum into 2012.
According to data from the National Association of REALTORS®, on a seasonally-adjusted, annualized basis, December’s Existing Home Sales climbed by 120,00 units overall from the month prior on its way to an 11-month high.
An “existing home” is a home that’s been previously occupied; that cannot be considered new construction.
After 4.61 million existing homes were sold in December, there are now just 2.38 million homes for sale nationwide. The last time the national home supply was this sparse was March 2005.
At today’s sales pace, the complete, national home inventory would be exhausted in 6.2 months — the fastest pace since before the recession. A 6.0-month supply is believed to represent a market in balance.
The December Existing Home Sales report contained (more…)
Jan 20, 2012 | Housing Analysis
When it comes to housing data, sometimes you have to look past the headlines. December’s Housing Starts data offers a terrific illustration of why.
Each month, the Census Bureau tallies Housing Starts for the month prior. A “housing start” is a home on which construction has started.
The Housing Starts report is separated by property type. There is a count for single-family homes; a count for 2-4 unit homes; and a count for buildings of 5 units or more, a category including apartments and condominiums.
In December, as reported by the government, Housing Starts fell 4 percent nationwide overall. This runs contrary to recent strength in housing and the story was quickly picked up by the press :
Now, although these headlines are factually true, they’re also are a little bit misleading.
Housing Starts did fall 4 percent last month but that was for all Housing Starts, across all three property types. Data like this is somewhat irrelevant to home buyers in Massachusetts or anywhere else nationwide.
Few buyers purchase 2-4 unit homes, (more…)
Jan 19, 2012 | Housing Analysis
Homebuilder confidence is soaring.
For the fourth straight month, the National Association of Homebuilders reports an increase in its Housing Market Index. The index climbed 4 points to 25 this month — its second four-point gain since October.
With home sales activity increasing across all four regions, the monthly HMI has now nearly doubled in value since June 2011.
The HMI is now at a 55-month high.
The Housing Market Index itself is a composite reading; the result of three home builder surveys sent by the National Association of Homebuilders to its members monthly. Home builders report back on current single-family home sales volume; projected single-family home sales volume for the next 6 months; and current (more…)
Jan 18, 2012 | Housing Analysis
Foreclosure filings are fewer these days, according to foreclosure-tracking firm RealtyTrac.
In December 2011, the number of foreclosure filings nationwide fell 9 percent from the month prior. Not since November 2007 has foreclosure activity been this sparse across the country.
The drop does not appear to be seasonal, either.
Last month’s foreclosure filings were down 20 percent from December 2010 with “foreclosure filing” defined to include any one of the following foreclosure-related events : (1) The serving of a default notice, (2) A scheduled home auction, or (3) A bank repossession. As a result of a unexpectedly strong year-end, 2011’s annual foreclosure rate was the lowest in 4 years.
One reason why the year may have closed so strongly is that Nevada, California, Michigan and Arizona — four states typically associated with high rates of foreclosures — each posted big drops in foreclosure filings between November and December, plus double-digit drops between December 2010 and December 2011.
In fact, among the country’s top 10 states for foreclosure (more…)
Dec 30, 2011 | Housing Analysis
Low home prices and mortgage rates have combined to push home affordability to record levels nationwide. Home buyers are taking advantage.
The Pending Home Sales Index rose 7 percent in November to rise to its highest level since April 2010, the last month of last year’s home buyer tax credit program.
The Pending Home Sales Index is published monthly by the National Association of REALTORS®. It measures homes under contract nationwide, but not yet “sold”.
In this way, the Pending Home Sales Index is different from other housing market indicators. It’s a “forward-looking” figure; a predictor of future home sales. According to the National Association of REALTORS®, more than 80% of homes under contract close within 60 days.
By contrast, housing data such as the Existing Home Sales report and the New Home Sales report “look back”.
November marks the second straight month of (more…)
Dec 29, 2011 | Housing Analysis
The government confirms what the private-sector Case-Shiller Index reported yesterday. Nationwide, average home values slipped in October.
The Federal Home Finance Agency’s Home Price Index shows home values down 0.2% on a monthly, seasonally-adjusted basis. October marks just the second time since April that home values fell month-over-month.
The Case-Shiller Index 20-City Composite showed values down 0.7 percent from September to October.
As a home buyer in Fitchburg , it’s easy to look at these numbers and think housing markets are down. Ultimately, that may prove true. However, before we take the FHFA’s October Home Price Index at face value, we have to consider the report’s flaws.
There are three of them — and they’re glaring. As we address them, it becomes clear that the Home Price Index — like the Case-Shiller Index — is of little use to everyday buyers and sellers.
First, the FHFA Home Price Index only tracks home values for homes backed by Fannie Mae or Freddie Mac mortgages. This means that homes backed by the FHA, for example, are specifically not computed in the monthly Home Price Index.
In 2007, this was not as big of an issue as it is today. in 2007, the FHA insured just 4 percent of the housing market. Today, the FHA is estimated to have more than one-third of the overall housing market.
This means that one-third of all home sales are excluded from the HPI — a huge exclusion.
Second, the FHFA Home Price Index excludes new home sales and cash purchases, accounting for home resales backed by mortgages only. New home sales is a growing part of the market, and cash sales topped 29 percent in October 2011.
Third, the Home Price Index is on a 60-day delay. The above report is for homes that closed in October. It’s nearly January now. Market momentum is different now. Existing Home Sales and New Home Sales have been rising; homebuilder confidence is up; Housing Starts are showing strength. In addition, the Pending Home Sales Index points to a strong year-end.
The Home Price Index doesn’t capture this news. It’s reporting on expired market conditions instead.
For local, up-to-the-minute housing market data, skip past the national data. You’ll get better, more relevant facts from a local real estate agent.
Since peaking in April 2007, the FHFA’s Home Price Index is off 18.3 percent.
