Tax Credit Sends Existing Home Sales Soaring

Existing home sales surged to a five-month high in April, according to The National Association of Realtors. Sales of previously owned homes were up 22.8 percent over last year’s pace and 7.6 percent above the month before. Though the gains were expected, Lawrence Yun, NAR’s chief economist, said there are other factors supporting the market such as stabilizing prices, an improving economy, and low interest rates. Total housing inventory also rose, climbing 11.5 percent to an 8.4-month supply at the current sales pace, up from an 8.1-month supply in March. More here, here, and here.

Filed under: Mortgage Banking News, Existing Home Sales, Housing Market, Interest Rates, Inventory, News, Prices, Real Estate, Tax Credit

Fannie, Freddie, and The Housing Forecast

With 25 percent of mortgages underwater and high levels of delinquencies, James Lockhart, former director of The Office of Federal Housing Enterprise Oversight, says the housing market will need another year or more before it shows signs of recovery.

Filed under: Mortgage Banking News, Delinquencies, Fannie Mae, Foreclosures, Freddie Mac, Housing Market, Real Estate, Second-Lien Modification, Video, Views

Homeowner Confidence Up In First Quarter

65 percent of U.S. homes declined in value last year, but according to Zillow.com’s first quarter Homeowner Confidence Survey, only 50 percent of homeowners believe their own home’s value has dropped in the last 12 months. And with 7 percent of homeowners saying they’d be very likely to put their home on the market in the next year if there are signs that the housing market is improving, that overconfidence could represent as many as 5.3 million homes put up for sale in a market already threatened by shadow inventory. Stan Humphries, Zillow’s chief economist, said we are in for a saw-toothed bottom, where inventory decreases, causing values to stabilize and some of the sidelined sellers to put their homes on the market, causing inventory to grow and values to decline again. More here.

Filed under: Mortgage Banking News, Homeowner Confidence, Housing Market, Inventory, News, Prices, Real Estate, Trends

Rates Fall To Lowest Level Since Last November

According to The Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages fell to 4.83 percent last week. But despite rates dropping to their lowest level since November 2009, requests for home purchase loans plummeted 27.1 percent. Michael Frantantoni, MBA’s vice president of research and economics, said purchase applications have declined nearly 20 percent over the past month, adding that the expiration of the tax credit may have pulled sales into April, cutting short the spring buying season. Refinance activity, on the other hand, was at its highest level in nine weeks after a 14.5 percent jump. More here, here, and here.

Filed under: Mortgage Banking News, Housing Market, Interest Rates, MBA, News, Real Estate, Tax Credit, Trends

Housing Starts Up 41% Over Last Year

According to The Department of Commerce’s April report on new residential construction, housing starts jumped 40.9 percent from last year and 5.8 percent above the month before. Ian Shepherdson, chief U.S. economist at High Frequency Economics, said increased demand from the home buyer tax credit lifted construction but its expiration has homebuilders wary, noting the 11.5 percent drop in building permits. Despite the drop in permits, which suggests starts will also fall off this summer, a recent report from the National Association of Home Builders showed builder confidence at a 2-1/2 year high. More here, here, here, and here.

Filed under: Mortgage Banking News, Building Permits, Housing Market, Housing Starts, News, Real Estate, Sales, Tax Credit, Trends

Shadow Inventory and The Housing Recovery

The housing market’s current mix of ups and downs has experts and industry insiders forecasting a variety of possible outcomes over the next few months and beyond. The shadow inventory looms large among many factors influencing whether the recent stretch of stability continues or the market takes a downturn. Estimates of the number of homes that are ready to sell but haven’t been put on the market vary. A recent report from Barclays Capital says the shadow inventory will peak this summer and begin falling as the market stabilizes. But with an estimated 4.5 million homes potentially hitting the market over the next few years, an orderly pace is required to prevent flooding the market and driving prices down again. More here, here and here.

Filed under: Mortgage Banking News, Delinquencies, Foreclosures, Housing Market, Inventory, News, Prices, Real Estate

Foreclosures, Gov’t Action, And The Recovery

Economist Dean Baker, co-director of the Center for Economic and Policy Research, says federal programs have led to an artificial stabilization in the market. In order to deal with the glut of distressed properties, he feels people facing foreclosure should be allowed to stay in their homes as renters until they can renegotiate their mortgage.

Filed under: Mortgage Banking News, Federal Programs, Foreclosures, Housing Market, Prices, Sales, Tax Credit, Video, Views

Total Foreclosure Filings Fall, Repossessions Rise

Foreclosures fell year-over-year for the first time since RealtyTrac began measuring them in January 2006. The total number of foreclosure filings, which include notices of default, scheduled auctions, and bank repossessions, dropped 2 percent from a year ago and 9 percent from March. James Saccacio, RealtyTrac’s CEO, said the numbers suggest foreclosure activity has begun to plateau but will not drop off anytime soon. Saccacio believes the overall numbers will stay high and repossessions will hit record levels as lenders work through the backlog of distressed properties. In April, 92,432 homes were repossessed, a 45 percent increase over the same month last year. More here, here, and here.

Filed under: Mortgage Banking News, Foreclosures, Housing Market, News, Real Estate, Repossessions, Trends

Interest Rates, Purchase Demand Fall

According to The Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for a 30-year fixed-rate mortgage fell to 4.96 percent last week from 5.02 percent the week before. As a result of rates being at their lowest level since mid-March, refinance activity increased 14.8 percent from the previous week. The seasonally adjusted Purchase Index, however, dropped 10 percent in the first week following the expiration of the home buyer tax credit. Michael Frantantoni, MBA’s vice president of research and economics said the tax credit likely pulled some sales into April that would’ve otherwise occurred later. More here and here.

Filed under: Mortgage Banking News, Housing Market, Interest Rates, MBA, News, Real Estate, Sales, Tax Credit

Home Prices Post Gains In First Quarter

In the first quarter, median existing single-family home prices rose in 91 out of 152 metropolitan areas compared to a year ago. The report, from The National Association of Realtors, showed double-digit increases in 29 cities. Overall, the national median home price was $166,100, down just 0.7 percent from the first quarter of 2009. NAR’s chief economist, Lawrence Yun, said the flattening of home prices was due, in part, to the home buyer tax credit’s role in drawing down excess inventory. Distressed homes accounted for only 36 percent of all first-quarter sales. More here, here, and here.

Filed under: Mortgage Banking News, Housing Market, Inventory, News, Prices, Real Estate, Tax Credit, Trends