In the News

Retail sales rose 1.1% to $412.9 billion in September. This follows an upwardly revised 1.2% increase in August. Compared to September 2011, retail sales have increased 5.4%.

Consumer prices rose 0.6% in September, following an identical 0.6% increase in August. Compared to September 2011, consumer prices have risen 2%. Consumer prices at the core rate — excluding volatile food and energy prices — were up 0.1% in September.

The National Association of Home Builders/Wells Fargo monthly housing market index rose one point in October to 41, the highest level since June 2006. This marks the sixth consecutive monthly gain. An index reading below 50 indicates negative sentiment about the housing market.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending October 12 fell 4.2%. Refinancing applications decreased 5%. Purchase volume rose 1%.

The combined construction of new single-family homes and apartments in September rose 15% to a seasonally adjusted annual rate of 872,000 units. Single-family starts increased 11%. Volatile multifamily starts rose 25.1%. Compared to a year ago, housing starts were up 34.8% in September. Applications for new building permits, seen as an indicator of future activity, rose 11.6% to an annual rate of 894,000 units.

Existing home sales fell 1.7% in September to a seasonally adjusted annual rate of 4.75 million units from 4.83 million units in August. Compared to a year ago, existing home sales were up 11% in September. The inventory of unsold homes on the market fell 3.3% to 2.32 million in September, a 5.9-month supply at the current sales pace, down from a 6.1-month supply in August.

Initial claims for unemployment benefits for the week ending October 13 rose by 46,000 to 388,000. Continuing claims for the week ending October 6 fell by 29,000 to 3.25 million.

from Prospect Mortgage Economic Update

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August Existing-Home Sales and Prices Rise

WASHINGTON (September 19, 2012) – Existing-home sales continued to improve in August and the national median price rose on a year-over-year basis for the sixth straight month, according to the National Association of Realtors®.

Total existing-home sales 1 , which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 7.8 percent to a seasonally adjusted annual rate of 4.82 million in August from 4.47 million in July, and are 9.3 percent higher than the 4.41 million-unit level in August 2011.

Lawrence Yun , NAR chief economist, said favorable buying conditions get the credit. “The housing market is steadily recovering with consistent increases in both home sales and median prices. More buyers are taking advantage of excellent housing affordability conditions,” he said. “Inventories in many parts of the country are broadly balanced, favoring neither sellers nor buyers. However, the West and Florida markets are experiencing inventory shortages, which are placing pressure on prices.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 3.60 percent in August from a record low 3.55 percent in July; the rate was 4.27 percent in August 2011.

“The strengthening housing market is occurring even with difficult mortgage qualifying conditions, which is testament to the sizable stored-up housing demand that accumulated in the past five years,” Yun added.

The national median existing-home price2 for all housing types was $187,400 in August, up 9.5 percent from a year ago. The last time there were six back-to-back monthly price increases from a year earlier was from December 2005 to May 2006. The August increase was the strongest since January 2006 when the median price rose 10.2 percent from a year earlier.

Distressed homes3 – foreclosures and short sales sold at deep discounts – accounted for 22 percent of August sales (12 percent were foreclosures and 10 percent were short sales), down from 24 percent in July and 31 percent in August 2011. Foreclosures sold for an average discount of 19 percent below market value in August, while short sales were discounted 13 percent.

Total housing inventory at the end August rose 2.9 percent to 2.47 million existing homes available for sale, which represents a 6.1-month supply 4 at the current sales pace, down from a 6.4-month supply in July. Listed inventory is 18.2 percent below a year ago when there was an 8.2-month supply.

The median time on market was 70 days in August, consistent with 69 days in July but down 23.9 percent from 92 days in August 2011. Thirty-two percent of homes sold in August were on the market for less than a month, while 19 percent were on the market for six months or longer.

NAR President Moe Veissi , broker-owner of Veissi & Associates Inc., in Miami, said some buyers are involuntarily sidelined. “Total sales this year will be 8 to 10 percent above 2011, but some buyers are frustrated with mortgage availability. If most of the financially qualified buyers could obtain financing, home sales would be about 10 to 15 percent stronger, and the related economic activity would create several hundred thousand jobs over the period of a year.”

First-time buyers accounted for 31 percent of purchasers in August, down from 34 percent in July; they were 32 percent in August 2011.

All-cash sales were unchanged at 27 percent of transactions in August; they were 29 percent in August 2011. Investors, who account for most cash sales, purchased 18 percent of homes in August, up from 16 percent in July; they were 22 percent in August 2011.

Single-family home sales rose 8.0 percent to a seasonally adjusted annual rate of 4.30 million in August from 3.98 million in July, and are 10.0 percent above the 3.91 million-unit pace in August 2011. The median existing single-family home price was $188,700 in August, up 10.2 percent from a year ago.

Existing condominium and co-op sales increased 6.1 percent to a seasonally adjusted annual rate of 520,000 in August from 490,000 in July, and are 4.0 percent above the 500,000-unit level a year ago. The median existing condo price was $176,700 in August, which is 3.3 percent higher than August 2011.

Regionally, existing-home sales in the Northeast rose 8.6 percent to an annual pace of 630,000 in August and are also 8.6 percent above August 2011. The median price in the Northeast was $245,200, up 0.6 percent from a year ago.

Existing-home sales in the Midwest increased 7.7 percent in August to a level of 1.12 million and are 17.9 percent higher than a year ago. The median price in the Midwest was $152,400, up 7.8 percent from August 2011.

In the South, existing-home sales rose 7.3 percent to an annual pace of 1.90 million in August and are 11.1 percent above August 2011. The median price in the region was $160,100, up 6.5 percent from a year ago.

Existing-home sales in the West increased 8.3 percent to an annual level of 1.17 million in August but are unchanged from a year ago. With ongoing inventory shortages, the median price in the West was $242,000, which is 16.3 percent higher than August 2011.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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In the News

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending September 7 rose 11.1%. Refinancing applications increased 12%. Purchase volume rose 8%.

The trade deficit increased to $42 billion in July from a revised $41.9 billion in June. Exports fell $1.9 billion or 1% to $183.3 billion. Imports fell $1.8 billion or 0.8% to $225.3 billion.

Wholesalers increased their inventories 0.7% to $485.2 billion in July. Sales at the wholesale level fell 0.1% to $402.4 billion in July. On a year-over-year basis, sales were 2.7% higher since July 2011.

The producer price index, which tracks wholesale price inflation, rose 1.7% in August, following a 0.3% increase in July. Compared to August 2011, wholesale prices have risen 2%. Core prices — excluding food and fuel — rose 0.2% in August.

Retail sales rose 0.9% to $406.7 billion in August. This follows a revised 0.6% increase in July. Compared to August 2011, retail sales have increased 4.7%.

Consumer prices rose 0.6% in August, following a flat reading in July. Compared to August 2011, consumer prices have risen 1.7%. Consumer prices at the core rate — excluding volatile food and energy prices — were up 0.1% in August.

Industrial production at the nation’s factories, mines and utilities fell 1.2% in August after a 0.5% rise in July. Compared to August 2011, industrial production has increased 2.8%. Capacity utilization eased to 78.2% in August from 79.2% in July.

Initial claims for unemployment benefits for the week ending September 8 rose by 15,000 to 382,000. Continuing claims for the week ending September 1 fell by 49,000 to 3.282 million.

from Prospect Mortgage Economic Update

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In the News

Motor vehicle sales rose 2.8% in August to an annualized sales rate of 14.5 million cars and light trucks. It was the fastest pace since August 2009. Compared to August 2011, motor vehicle sales have increased 20%.

Manufacturing activity fell to 49.6 in August after a reading of 49.8 in July. A reading below 50 signals contraction. This was the third consecutive contraction since July 2009.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending August 31 fell 2.5%. Refinancing applications decreased 3%. Purchase volume fell 0.8%.

Total construction spending fell 0.9% to $834.4 billion in July, following a 0.4% increase in June. Compared to June 2011, construction spending has risen 9.3%.

The Labor Department reported that in the second quarter, productivity rose at an annual rate of 2.2% and labor costs increased at an annual rate of 1.5%.

Retail sales fell 0.4% for the week ending September 1, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 3.7%.

Non-manufacturing activity rose to 53.7 in August from 52.6 in July. A reading above 50 signals expansion. It was the 32nd straight month of expansion in the services sector.

Initial claims for unemployment benefits for the week ending September 1 fell by 12,000 to 365,000. Continuing claims for the week ending August 25 fell by 6,000 to 3.322 million. The unemployment rate fell to 8.1% in August from 8.3% in July. Employers added 96,000 jobs in August.

from Prospect Mortgage Economic Update

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Economic Update

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending November 4 rose 10.3%. Refinancing applications increased 12.1%. Purchase volume rose 4.8%.

According to the Federal Reserve, consumer credit debt rose in September by $7.39 billion for a total credit level of $2.452 trillion. Revolving debt, which includes credit cards, fell by $627 million to $789.6 billion. Non-revolving debt, including loans for cars, rose by $8 billion to $1.662 trillion.

Wholesalers decreased their inventories 0.1% to $462 billion in September. This followed a revised 0.3% decline in August. Sales at the wholesale level rose 0.5% to $403.1 billion in September. On a year-over-year basis, sales were 15% higher since September 2010.

The trade deficit decreased to $43.1 billion in September from a revised $44.9 billion in August. Exports rose 1.4% to $180.4 billion. Imports increased 0.3% to $223.5 billion.

Import prices fell 0.6% in October, following a 0.3% increase in September. On a year-over-year basis, import prices are up 11%, led mostly by a sharp rise in fuel prices. Export prices fell 2.1% in October after advancing 0.4% in September. For the year, export prices are up 6.3%.

The Reuters/University of Michigan consumer sentiment index for November’s preliminary reading rose to 64.2 from 60.9 in October. It was the third monthly gain in a row for the index.

Initial claims for unemployment benefits fell by 10,000 to 390,000 for the week ending November 5. That’s the lowest level since April. Continuing claims for the week ending October 29 fell by 92,000 to 3.615 million.

from Prospect Mortgage Economic Update

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Last Week in the News

New home sales fell 2.3% in August to a seasonally adjusted annual rate of 295,000 units from a revised rate of 302,000 units in July. Compared to a year ago, new home sales were up 6.1%.

The Standard & Poor’s/Case-Shiller 20-city housing price index — on a non-seasonally adjusted basis — rose 0.9% in July after a 1.2% increase in June. On a year-over-year basis, prices fell 4.1% compared with July 2010.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending September 23 rose 9.3%. Refinancing applications increased 11.2%. Purchase volume rose 2.6%.

Pending home sales, a forward-looking indicator based on signed contracts, fell 1.2% in August after a 1.3% increase in July. On a year-over-year basis, pending sales are up 13.1%.

Initial claims for unemployment benefits unexpectedly fell by 37,000 to 391,000 for the week ending September 24. Continuing claims for the week ending September 17 fell by 20,000 to 3.7 million.

from Prospect Mortgage Economic Update

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