Sep 30, 2011 | Housing Analysis
Despite the lowest mortgage rates of all-time, home buyers are slowing the pace at which they’re buying homes.
According to the National Association of REALTORS®, on a seasonally-adjusted basis, the Pending Home Sales Index fell 1 percent in August.
The Pending Home Sales Index measures homes under contract, but not yet sold, nationwide. In this respect, the Pending Home Sales Index is a forward-looking housing market indicator; a predictor of future home sales.
It’s one of the few national indices that “looks ahead” to future market conditions. Most housing data, by contrast, describes past events.
On a regional basis, only the South Region showed improvement in August’s Pending Home Sales Index report : (more…)
Sep 29, 2011 | Housing Analysis
Standard & Poors released its monthly Case-Shiller Index this week. The Case-Shiller Index measures home price changes from month-to-month, and year-to-year, in 20 select U.S. cities. It also reports a “national” index; a composite of the values in said cities.
The most recent Case-Shiller Index shows a 0.9% rise in home values from June to July 2011. Home values were higher in 17 of the 20 tracked cities. Only Phoenix and Las Vegas fell. Denver was flat.
Also noteworthy is that, of all of the Case-Shiller cities, Detroit posted the strongest 1-year, home price improvement. As compared to July 2010, home values are higher by 1.2 percent in Detroit. This bests even Washington, D.C. — long-believed to be the nation’s healthiest housing market.
That said, we should be careful of the conclusions we draw from July’s Case-Shiller Index — both on a city-wide level, and on a national level. This is because, as with most “home price trackers”, the Case-Shiller Index has flaws in its methodology. (more…)
Sep 28, 2011 | Housing Analysis
According to the Census Bureau, the number of new homes sold slid for the fourth straight month in August, easing 2 percent from July. On a seasonally-adjusted, annualized basis, home buyers bought 295,000 newly-built homes last month.
August marked the lowest new home sales tally since February. News outlets are jumping on the story, with at least one calling it a “blow” to the housing market.
That’s an unfair assessment.
It’s tough for the new home market to tally big sales numbers when the number of homes for sale is dwindling and, in August, that’s exactly what we saw. The number of new homes for sale nationwide fell to 162,000 last month. This is the fewest number of new homes for sale since at least 1993, the first year the Census Bureau tracked such data.
In other words, using New Home Sales as a housing market gauge may be misleading. A better metric may be new home supply.
In August, new home supply edged 0.1 months higher to 6.6 months. This means that, at today’s sales pace, the complete new home inventory would be sold out in 6.6 months. (more…)
Sep 27, 2011 | Housing Analysis
Are home resales rebounding?
According to the National Association of REALTORS®, Existing Home Sales rose 8 percent in August from the month prior, and 19 percent as compared to August of last year.
“Existing homes” are homes that are previously owned; ones that cannot be considered new construction.
A total of 5.0 million existing homes were sold last month on a seasonally-adjusted, annualized basis. This is slightly better than the 12-month home resale average, a statistic partially powered by “distressed sales”. Distressed homes — homes in various stages of foreclosures or sold via short sale — accounted for 31 percent of all home resales in August. (more…)
Sep 23, 2011 | Housing Analysis
Single-Family Housing Starts fell for the second consecutive month, dropping to a seasonally-adjusted, annualized 417,000 units in August 2011.
A “Housing Start” is defined as a home on which ground has broken.
We shouldn’t put too much faith in the findings, however. Although housing starts were lower last month, as noted by the Census Bureau, the margin of error in the August Housing Starts report exceeded the actual result.
From the official report:
- August’s Published Results : -1.4% from July
- August’s Margin of Error : ±10.3% from July
Therefore, August’s Housing Starts may have actually increased by up to +8.9% from July, or it may have dropped as much as -11.7%. We won’t know for sure until several months from now, after the Census Bureau has gathered more housing data.
One thing is certain, though — the long-term trend in Housing Starts is “flat”. There has been little change in new home construction since last summer.
The same can’t be said for Building Permits.
Considered a pre-cursor to Housing Starts, Single Family Building Permits climbed 2.5 percent with a minuscule Margin of Error of ±0.9 percent.
As is common in real estate, results varied by region: (more…)
