Report: Housing Market 61% 'Back to Normal'

The housing market made it to 61 percent “back to normal” in May, according to the latest Housing Barometer from Trulia.

May’s percentage is the first time the recovery has passed 60 percent since the crash. April’s barometer was 54 percent. A year ago, the barometer was at only 35 percent.

The monthly report measures three key housing market indicators—construction starts, existing-home sales, and the delinquency-plus-foreclosure rate—to track how quickly the market is recovering to its normal, pre-bubble state.

All three metrics improved in May, with starts and sales rising and the delinquency/foreclosure rate falling.

According to the May report from the Census Bureau, starts were at a seasonally adjusted annual rate of 914,000, up 7 percent from April but still below February and March. On the sales side, the National Association of Realtors reported a 4 percent increase in May to a seasonally adjusted annual rate of 5.18 million.

Overall, starts are about 43 percent back to their normal level of 1.5 million, while sales are 82 percent back to normal.

Meanwhile, the share of mortgages in delinquency or foreclosure dropped to 9.13 percent in May. The combined rate is 57 percent back to normal.

“The recovery has reached full-fledged teenager status, with awkward, sudden growth spurts and parents—the Fed—who now threaten to take away its allowance by winding down measures that pushed mortgage rates down to historic lows,” said Jed Kolko, chief economist at Trulia. “Before long, the recovery should make it into adulthood, but it will face some grown-up challenges in the next couple of years:

1. still-tight mortgage credit for many borrowers,
2. a slow jobs recovery for young adults, and
3. unaffordable housing in large coastal markets.”


Source: DS News

Survey: Agents Expect Prices to Rise, but in Smaller Increments

In concurrence with many industry analysts, real estate agents expect price gains to mellow in the near future, according to survey results released by Redfin, a Seattle-based national brokerage.

Agents also harbor a positive outlook for sellers and a somewhat less positive outlook for buyers in the current market, according to Redfin’s Real-Time Agent Survey of 380 real estate agents.

Eighty-six percent of agents believe prices will rise over the next few months. The same percentage of agents say now is a good time to sell a home. Both of these categories have increased from the first quarter of the year to the second.

However, while a majority of agents expect price gains, a minority expect prices to “rise a lot.” The percent of agents who anticipate prices rising “a lot” in coming months fell from 44 percent in the first quarter to just 16 percent in the second quarter, according to Redfin’s survey.

Factors leading agents to view the current market as a seller’s market include low inventory and an observance of multiple offers on the same homes. Ninety-three percent of agents cited these buyer challenges in Redfin’s survey. While still a significant majority, this is down three percentage points from the first quarter.

On the other hand, the most commonly-cited obstacle for sellers—cited by 40 percent of survey respondents—is low appraisals.

In the current environment, a decreasing percentage of agents are advising buyers to “use aggressive strategies such as waiving contingencies and expanding their budget when facing a bidding war.” About 11 percent of agents admitted to using these strategies, as opposed to 15 percent in the previous quarter.

Source: DS News

Forecast Points to Steady Price Growth Led by California

When it comes to price appreciation, California markets are expected to continue leading growth over the next year, while certain markets concentrated in the Northeast should see a decline in home values, according to Veros Real Estate Solutions' most recent forecast ending June 1, 2014. The company's forecast covers 969 counties, 324 metro areas, and 13,502 zip codes.

 Source: DS News

Pending Sales at Strongest Pace Since 2006

Pending home sales rose in May to the highest level since late 2006, implying a possible spark as mortgage interest rates began to rise, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 6.7 percent to 112.3 in May from a downwardly revised 105.2 in April, and is 12.1 percent above May 2012 when it was 100.2. Contract activity is at its strongest pace since December 2006, when it reached 112.8. Also, pending sales have been above year-ago levels for the past 25 months.

Lawrence Yun, NAR chief economist, said there may be a fence-jumping effect. “Even with limited choices, it appears some of the rise in contract signings could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher,” he said. “This implies a continuation of double-digit price increases from a year earlier, with a strong push from pent-up demand.”

Regionally, the index went unchaged in the Northeast, but is 14.3 percent above a year ago. In the Midwest, it jumped 10.2 percent to 115.5 in May and is 22.2 percent higher than May 2012. Pending home sales in the South rose 2.8 percent and 16 percent in the West.

Source: NAR

Delinquency, Foreclosure Rates Decrease to Post-Crisis Lows in May

The national delinquency rate and foreclosure inventory rate each fell to post-crisis lows in May, Lender Processing Services reported Tuesday. At 6.08 percent, the national delinquency rate in May stood at the lowest level since May 2008, when the rate was 5.96 percent. 

At the same time, the foreclosure inventory rate slipped to 3.05 percent, which represents the lowest point since March 2009 when the rate was 2.90 percent. Over the last year, foreclosure inventory has plunged 27 percent and also fell by 3.9 percent over the last month. 

LPS also reported about 3.04 million mortgages were past due by at least one month, but not yet in foreclosure. Of that total, about 1.34 million are 90 days or more past due but not in foreclosure.

The five states that topped the list for having the highest percentage of past due mortgages were Florida, New Jersey, Mississippi, Nevada, and New York.

The five states with the lowest percentage of non-current loans were Montana, Alaska, Wyoming, South Dakota, and North Dakota.

Source: dsnews.com; Lender Processing Services.

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