Category Archives: Housing
Home Prices Continue to Inflate
“Nationwide home
prices including distressed sales were up 10.5% year-over-year in March, according to CoreLogic’s latest home price report. On a monthly basis home prices were up 1.9%.
This was the thirteenth straight monthly rise, and the fastest pace of increase since March 2006. Ex-distressed sales, home prices were up 10.7% year-over-year and 2.4% on the month.
“For the first time since March 2006, both the overall index and the index that excludes distressed sales are above 10 percent year over year,” said Dr. Mark Fleming, chief economist at CoreLogic in a press release. Home prices are being driven by demand from investors and homebuyers even as supply stays tight.
Here are some details from the report…”
Easy Money Helps Investors While Hurting Real Home Buyers
“Michael Marchillo, a plumber, has been trying and failing for months to buy a bigger home for his family here in Sin City. He was pre-qualified by a bank for a $130,000 mortgage, which a year ago would have landed a typical three-bedroom home in the area. No more. Now, the 36-year-old says, it’s hard to compete with “greedy investors” who come to the table flush with cash for quick deals.
Marchillo is on to something. The once-beleaguered Las Vegas housing market has been on fire since investment firms led by Blackstone Group, Colony Capital, and American Homes 4 Rent began buying homes here some eight months ago, backed by $8 billion in investor cash to spend nationally.
These big investors and a handful of others have bought at least 55,000 single-family homes across the U.S. in the past year. In the Vegas area alone, they have accounted for at least 10 percent of the homes sold since January 2012, according to a Reuters analysis of housing transactions.
(Read More: US Pending Home Sales Tick Upward in March)
That added firepower helps explain why home prices in this metropolitan area of 2 million people are up 30 percent over a year ago, far more than the national average of 10 percent. Permits for new home construction are up 50 percent, twice the national average.
Local real-estate broker Fafie Moore says private-equity firms and hedge funds have largely “crowded out” local buyers like Marchillo. That’s because the investment firms have broadened beyond their initial focus —buying homes at foreclosure auctions. Now, they are also bidding for homes listed by private owners and banks.
In a sign of how freely the money is flowing, Moore notes around 60 percent of all sales are in cash these days.
Fellow broker Trish Nash said she has seen cases where a home gets listed and quickly draws a dozen bids, many in cash. Realtors are talking about a mini-bubble forming here.
“There is an artificial appreciation in our market,” says Nash. “I know (the big investors) say they aren’t going to be flippers, but for them it is all about the bottom line.” …”
Mortgage Applications Rose Last Week
“Applications for U.S. home mortgages rose last week, fueled by demand for refinancings as interest rates dropped, data from an industry group showed on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 1.8 percent in the week ended April 26.
The MBA’s seasonally adjusted index of refinancing applications climbed 2.8 percent. But the gauge of loan requests for home purchases, a leading indicator of home sales, slipped 1.4 percent…..”
Case Shiller 20 City Price Index: Prior 8.1%, Market Expects 8.7%, Actual 9.3%
Pending Home Sales Beat Expectations
“The March reading of pending home sales is out.
Sales jumped 1.5% from last month. Economists were looking for a 1.0% gain.
However, February’s reading was revised down to -1.0% from an initial reading of -0.4%…”
U.S. Home Prices Rise in Line With Expectations
“The FHFA’s reading of U.S. home prices for February is out.
The headline index climbed by 0.7% month-over-month, which was right in line with expectations.
This is up from 0.6% a month ago.
“The U.S. index is 13.6 percent below its April 2007 peak…”
New Home Prices Rise in March Helping to Further China’s Property Rebound
“China’s property rebound gathered pace in March as new home prices in the southern city of Guangzhou jumped the most in more than two years, underscoring concerns that a bubble may be building.
Guangzhou prices rose 11.1 percent from a year earlier while those in Beijing climbed 8.6 percent and Shanghai posted a 6.4 percent increase, the National Bureau of Statistics said in a statement today, all showing the biggest gains since January 2011 when the government changed its methodology for the data. Prices rose in 68 of 70 cities tracked by the government, the most since September 2011….”
HARP To Be Extended for Two More Years
“The federal regulator for Fannie Mae FNMA -6.79% and Freddie Mac FMCC -9.09%will extend a popular refinancing program for two more years.
The Home Affordable Refinance Program, or HARP, allows homeowners with loans backed by the mortgage-finance companies to refinance even if they don’t have any equity. So far, more than two million homeowners have refinanced under the program. HARP had been set to expire at the end of this year, but the Federal Housing Finance Agency said Thursday that the program would now run through 2015.
“We are extending the program so more underwater borrowers can benefit from lower interest rates,” said Edward DeMarco, the acting director of the FHFA.
The Obama administration rolled out HARP in early 2009, and the program was initially set to end on June 10, 2010. In addition to extending the end date of HARP several times, the program has undergone a series of overhauls in a bid to reach more borrowers amid disappointing initial results….”
Realtytrac: NYC Sees a 200% Jump in Foreclosures
RealtyTrac: US Home Repossessions Fell in March
“LOS ANGELES (AP) — The number of U.S. homes repossessed by lenders last month fell to the lowest level in more than five years, the latest evidence that the nation’s foreclosure crisis is abating amid an improving housing market.
While some states still saw increases in homes taken back by banks, nationally home repossessions fell 3 percent in March from the previous month and were down 21 percent from a year earlier,foreclosure listing firm RealtyTrac Inc. said Thursday.
Thirty-four states posted annual declines in completed foreclosures. Among those bucking that trend: Arkansas, Maryland, Washington and Pennsylvania.
All told, lenders repossessed 43,597 homes last month, the lowest level since September 2007.
At the current monthly pace, completed foreclosures will total roughly 550,000 this year, down from 671,000 last year, RealtyTrac said.
An uptick in homes that entered the foreclosure process last month, however, may end up pushing that total to 600,000, said Daren Blomquist, a vice president at RealtyTrac.
Several factors are contributing to the decline in completed foreclosures: Steady job growth and ultra-low mortgage rates are helping the once-battered housing market recover, driving demand for homes and prices upward.
Higher home values help restore equity to homeowners, which can help those at risk of foreclosureby improving their chances of refinancing their mortgage to a lower payment or place them in a better position to sell their home.
Meanwhile, states like California, Nevada and others have passed laws to increase homeowners’ protections from foreclosure. Those laws have effectively delayed the pace of homes entering the foreclosure process, which has helped to thin the pipeline of completed foreclosures in those states.
Even so, the number of foreclosure starts, or homes that entered the foreclosure process, edged higher for the second month in a row in March….”
The FHA May Require a $943 Million Bailout
“WASHINGTON, April 8 (Reuters) – The cash-strapped Federal Housing Administration will likely require a $943 million taxpayer bailout to cover expected losses from loans it insured as the U.S. housing bubble was deflating, the Obama administration said on Wednesday.
It would be the first bailout of the government’s mortgage insurer in its nearly 80-year history.
The FHA, which has struggled to manage a glut of delinquent mortgages, will likely need the funds given a shortfall in its reserves, the administration said in President Barack Obama’s fiscal 2014 budget proposal.
FHA Commissioner Carol Galante said the agency might still be able to avoid taking aid from the U.S. Treasury despite the projected budget hole. The agency has until Sept. 30 to decide whether it needs a cash infusion.
“FHA, while still under stress from legacy loans, has made significant progress and is on a sound fiscal path forward,” Galante told reporters on a conference call. “We are continuing to act and do everything possible to ensure that the impact of these legacy loans … are corrected as soon as possible.” …”
Are Rising Home Prices A Recovery or Another Bubble ?
“Shah Gilani writes: Where there’s smoke there’s fire.
When it comes to rising home prices, the question is whether the on-fire price increases are a healthy sign of a housing recovery or a smoke screen masking another investor-led real estate bubble.
The answer is it’s both….”
Home Prices In China Rise the Most in 26 Months
“China’s March new home prices posted the biggest gain in more than two years as buyers rushed into the market ahead of property curbs by local governments, driving real estate stocks higher.
Prices climbed for the 10th month, rising 1.1 percent to 9,998 yuan ($1,610) per square meter (10.76 square feet) from February, SouFun Holdings Ltd. (SFUN), the country’s biggest real estate website owner, said in a statement today after a survey of 100 cities. That’s the biggest increase since January 2011.
“The earlier property policy uncertainty drove quite a lot of buyers into the market, while supply, usually low in the first quarter, couldn’t catch up with the demand,” said Zhao Zhenyi, a Shanghai-based property analyst at Industrial Securities Co. “Home sales will weaken in the coming months as more local governments announce curbs for the cities.”
About 17 cities have issued details of property curbs by the end of the first quarter. The capital city of Beijing banned single-person households from buying more than one residence, while Shanghai prohibited banks from giving credit to third-home buyers, the local governments said over the weekend.
Home prices rose 3.9 percent last month from a year ago, according to the SouFun statement.
A gauge tracking property shares advanced 0.9 percent at the close of trading in Shanghai, the most among five industry groups on the Shanghai Composite Index. (SHCOMP) The benchmark measure fell 0.1 percent.
Safe Haven…”
Major Chinese Cities Enact More Property Curbs
“China’s largest cities, including Beijing and Shanghai, tightened rules on home purchases after the nation asked local governments to step up efforts to cool the property market.
Beijing, the capital, banned single-person households from buying more than one residence while Shanghai prohibited banks from giving credit to third-home buyers, according to the local administration websites. The two cities will also enforce a 20 percent tax on capital gains from property sales.
“This will help calm people’s panic about home prices,” said Yi Xianrong, a Beijing-based researcher at the Chinese Academy of Social Sciences, which advises the Cabinet. “At the same time, restrictions on home purchases don’t change the fundamental demand, and it seems the new measures in Beijing are aimed more at short-term problems rather than long-term healthy development of the property market.”
Home prices in the capital jumped 5.9 percent from a year earlier in February, the biggest increase in two years, China’s National Bureau of Statistics said March 18. Costs across the country rose 160 percent in 1998-2011 after ownership passed into private hands, government data show.
The city administration of Shanghai, where new home prices in February rose 3.4 percent from a year earlier, also said it will increase down-payment requirements and interest rates for second-home mortgages. Shenzhen, Guangzhou, Chongqing, Tianjin and Jinan have also published details on the housing curbs.
Shenzhen Measures…”
Foreclosed Home Inventory Jumps 9% in Q1
“Foreclosure inventory was up 9 percent year-over-year (YoY) in the first quarter to 1.5 million properties, according to RealtyTrac’s foreclosure inventory report.
The increase was led by a 59 percent YoY increase in pre-foreclosure inventory.
Delinquent loans have been working their way through the pipeline after the National Mortgage Settlement was finalized last year.
“The settlement provided some closure regarding accepted foreclosure processing practices, and as a result lenders have been reviving more of these delinquent loans and pushing them into foreclosure over the past 12 months,” said Daren Blomquist vice-president of RealtyTrac in a press release.
“Particularly in states where a lengthy court process has resulted in a bigger backlog of non-performing loans still in snooze mode.”
Here are some details from the report…”
Pending Home Sales Fall in February Due to Low Inventory
“WASHINGTON (Reuters) – Contracts to buy previously owned homes fell in February, held back by a shortage of properties, but there is little to suggest that the housing market recovery is stalling.
The National Association of Realtors said on Wednesday its Pending Home Sales Index, based on contracts signed last month, slipped 0.4 percent to 104.8. Still, contracts last month remained at the second highest level in nearly three years.
Economists polled by Reuters had expected signed contracts, which become sales after a month or two, to dip 0.2 percent after a previously reported 4.5 percent jump in January.
The Realtors group blamed the pullback to a shortage of homes for sale. The supply squeeze is helping to push up home prices, putting a solid foundation under the housing recovery….”
SHILLER: ‘We’re Living In A Totally Artificial Real Estate Economy’
“Housing data released Tuesday was mixed, showing home prices jumped while new home sales dropped, prompting renowned economist Robert Shiller to call the housing recovery positive in the short-term, but not without many headwinds. There might even be a bubble, he said.
“One thing that makes it very hard to forecast home prices right now is that we’re living in a totally artificial real estate economy,” said Shiller, co-creator of the Standard & Poor’s/Case-Shiller Index, a widely followed measure of housing prices.
Shiller pointed to the Federal Reserve, which last week reaffirmed its policies on bond purchases and record-low interest rates. In September, the Fed launched a third round of quantitative easing (QE), in which it has bought $40 billion of mortgage-backed securities per month, primarily in mortgage-backed bonds.
Meanwhile, Fannie Mae and Freddie Mac, the two largest U.S. home funding sources, remain in government conservatorship as Congress looks for ways to raise new tax revenues, Shiller noted.
“All of these things are weighing on the futures of housing,” Shiller said on CNBC‘s “Futures Now,” adding the recovery might even be a bubble. “One thing you learn from history is that bubbles can occur at any time.”….”
Mortgage Applications Rebound
“(Reuters) – Applications for home mortgages rebounded last week as interest rates pulled back for the first time in three weeks, data from an industry group showed on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 7.7 percent in the week ended March 22.
The index has declined for six of the past nine weeks as rates have pulled higher. Still, interest rates remain low on a historical basis, kept down by the Federal Reserve’s efforts to boost the economy by buying bonds and mortgage-backed securities.
The seasonally adjusted index of refinancing applications jumped 8 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, gained 6.7 percent….”
Home Inventories Rise in February
“For the first time in over six months, the supply of homes for sale is beginning to rise.
While inventories are still down nearly 20 percent from a year ago, they did rise more than the seasonal norm in February from January, according to a new report from the National Association of Realtors.
The raw number of for-sale listings rose 10 percent month-to-month, and when seasonally adjusted, they were up 2.6 percent, the biggest jump in over two years.
“Tight inventory has been a critical issue for the housing market: The limited supply of homes has fueled bidding wars and has meant that buyers have little to choose from and agents have little to sell,” said Trulia.com’s Jed Kolko. “Inventory has been tightening because construction levels are still low, adding little new housing stock, and homeowners are waiting to sell until they have more positive equity. This inventory spiral been especially severe since prices bottomed.” …”
Existing Home Sales Beat Expectations
“Existing home sales for February were up 0.8 percent month-over-month in February, to an annual rate of 4.98 million.
This missed expectations for a 1.6 percent rise to an annual rate of 5 million.
January’s reading was revised up to reflect a 0.8 percent rise in sales to an annual rate of 4.94 million….”
