Mar 28, 2012 | Housing Analysis
The housing market took a step back in February, but remains near post-recession highs.
According to data from the National Association of REALTORS®, February’s Pending Home Sales Index slipped 0.5 percent from the month prior, to 96.5.
The Pending Home Sales Index is a monthly report which measures the number of homes under contract to sell, but not yet sold, nationwide.
The index is benchmarked to a value of 100, the average level of home contract activity in 2001, the first year that pending home sales data was analyzed. It also happened to be a year of historically-high levels of home contract activity. Therefore, a Pending Home Sales Index reading of 100 suggests a strong housing market nationwide.
The index has read north of 90 since October 2011.
On a regional basis, February’s Pending Home Sales Index varied :
- Northeast Region: -0.5 percent from January 2012
- Midwest Region : +5.7 percent from January 2012
- South Region : -3.3 percent from January 2012
- West Region : -2.6 percent from January 2012
Mild weather may have helped the Midwest Region last month but even regional data can only tell us so much. Like everything in real estate, housing data must (more…)
Mar 22, 2012 | Housing Analysis
The market for home resales stays strong.
Despite sparse home inventory, the National Association of REALTORS® reports that 4.59 million existing homes were sold in February on a seasonally-adjusted, annualized basis. An “existing home” is a home that cannot be classified as new construction.
Last month’s sales data represents a 9 percent improvement from the year prior.
There are now just 2.43 million homes for sale nationwide — a 19% reduction versus a year ago. The complete home inventory would “sell out” in 6.4 months at the current sales pace.
Some analysts believe that a 6-month home supply indicates a housing market in balance.
The real estate trade group’s report contained other noteworthy statistics, too :
- 32 percent of home sales were made to first-time buyers
- 33 percent of home sales were made with cash (i.e. no mortgage)
- 34 percent of home sales were of foreclosed homes or homes in short sale
In addition, nearly one-third of all home sales “failed” last month, the result of homes not appraising at the purchase price; or, the buyer’s inability to secure mortgage financing; or, insurmountable home inspection issues.
Even accounting for last month’s high contract failure rate, (more…)
Feb 29, 2012 | Housing Analysis
The housing market appears headed for a strong spring season.
After a brief setback in December, the Pending Home Sales Index resumed its climb in January, posting a 2 percent gain over the month prior.
The data puts pressure on Worcester County area home buyers. This is because a “pending home” is a home that’s under contract to sell, but has not yet sold. It’s tracked by the National Association of REALTORS® and, among all housing statistics, it’s the only one that’s “forward-looking”.
The Pending Home Sales Index is important to home buyers throughout Massachusetts because 80% of homes under contract to sell close within 60 days of contract. In this way, the Pending Home Sales Index forecasts the housing market 1-2 months into the future.
This is very different from how NAR’s Existing Home Sales report works; or, how the Census Bureau’s New Home Sales report works. These two metrics tell us what’s already happened in housing.
By contrast, the Pending Home Sales Index tells us what’s coming next.
January’s Pending Home Sales Index reading lifts the monthly metric to its highest level since April 2010 — the month during which the 2010 federal home buyer tax credit expired — foreshadowing a strong housing market (more…)
Feb 23, 2012 | Housing Analysis
January’s home resales moved to a 20-month high — additional evidence that the nation’s housing recovery is underway.
According to the National Association of REALTORS®, the January 2012 Existing Home Sales showed 4.57 million units sold last month on a seasonally-adjusted, annualized basis — a 4 percent increase as compared to December’s revised figures.
An “existing home” is one that’s been previously occupied and cannot be categorized as new construction.
Beyond the headline numbers, though, there was plenty about which for today’s Worcester County area home sellers to get excited. Demand for homes remains strong, foreshadowing higher home prices through 2012.
First, the national housing stock is at a 5-year low.
In January, the number of homes for sale nationwide slipped to 2.31 million, the smallest home inventory since February 2007, and a 21% decrease from just one year ago.
Falling home supply amid constant home demand leads home prices higher. At the current pace of sales, today’s complete home inventory would “sell out” in 6.1 months.
Analysts say that a 6-month supply is a market in balance. (more…)
Jan 27, 2012 | Housing Analysis
After 3 consecutive months of growth, the housing market appears to have eased a bit in December.
According to the National Association of REALTORS®, December’s Pending Home Sales Index slipped 4 percent from the month prior. The index measures the number of homes under contract to sell nationwide, but not yet sold.
Despite falling below its benchmark “100 value”, December’s Pending Home Sales Index is the reading’s second-highest value since April 2010 — the last month of last year’s home buyer tax credit program.
In other words, the housing market continues to show signs of improvement, propelled by low home prices and the cheapest mortgage rates of all-time.
Freddie Mac’s mortgage rate survey put the 30-year fixed rate mortgage at an average of 3.96% in December — a 75-basis point improvement from December 2010. This helps to (more…)
