Oct 19, 2011 | Housing Analysis
Homebuilder confidence is rebounding sharply.
Just one month after falling to a multi-month low, the Housing Market Index rebounded four points to 18 for October. It’s the highest reading for the HMI since May 2010 — the month after last year’s homebuyer tax credit expiration.
The Housing Market Index is published monthly by the National Association of Homebuilders and is scored on a scale of 1-100. Readings above 50 indicate favorable conditions for homebuilders. Readings below 50 indicate unfavorable conditions.
The index has been below 50 since May 2006 — a 66-month streak.
The Housing Market Index is a composite reading; the result of three separate surveys sent to home builders each month. Builders are asked about current single-family home sales volume; projected single-family home sales volume over the next 6 months; and current “foot traffic”.
In October, builder responses were stronger in all 3 categories :
- Current single-family sales : 18 (+4 from September)
- Projected single-family sales : 24 (+7 from September)
- Buyer foot traffic : 14 (+3 from September)
Meanwhile, of particular interest to today’s Fitchburg home buyers is that builders expect volume to surge over the next two seasons. And, with current sales volume rising and foot traffic strengthening, the fall and winter months could be strong ones in the new homes market.
In addition, the builder trade group press release states that rising costs for materials are squeezing building profit margins.
For buyers, it all adds up higher home prices ahead. As builders grow more confident about the housing market, they’re less likely to make concessions on pricing or upgrades. Rising building costs fortify that argument. The “great deal” will be tougher to negotiate.
At least mortgage rates are low.
Low mortgage rates are keeping homes affordable in Massachusetts and nationwide. If you’re looking for the right time to buy new construction, therefore, this month may be it.
Oct 18, 2011 | Housing Analysis
Foreclosure activity continues to slow throughout the United States.
According to data from RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings dipped below 215,000 in September 2011, a 6 percent decrease from August.
A “foreclosure filing” is defined as any foreclosure-related action including Notice of Default, Scheduled Auction, or Bank Repossession.
September marks the 12th straight month in which foreclosure filings fell year-over-year.
There are several reasons why foreclosure filings are down, including an increase in the amount of time it takes banks to move a foreclosure through its pipeline. It now takes a nationwide average of 336 days from the date of initial default notice to bank repossession.
Some states work quicker than others, however, because of a combination of state law and personnel. (more…)
Oct 5, 2011 | Housing Analysis
The government is confirming what the private sector has already shown — home values are on the rise.
The Federal Home Finance Agency’s Home Price Index shows home values rose 0.8% in July.
July marks the fourth straight month that home values climbed and the FHFA’s Home Price Index is the latest in a series of “rising home values” reports — an encouraging trend for buyers and sellers in Fitchburg and nationwide.
Last week, the S&P Case-Shiller Index showed home value up nearly 1 percent in July. CoreLogic reached a similar conclusion.
Nationwide, values are back to their highest levels since November 2010. Clearly, the housing market in Massachusetts is moving in the right direction. Or is it?
Although the data from the government and from private firms such as CoreLogic is encouraging, it’s also flawed. As such, we have to be careful about the conclusions we draw from the data. (more…)
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…)
