Pending Home Sales Rise For 3rd Straight Month

Buyers are writing contracts at a furious pace nationwide.

On a seasonally-adjusted basis, the Pending Home Sales Index rose 2 percent last month to reach its highest level since March.

A "pending home sale" is a home under contract to sell, but not yet closed. 

The forward-looking Pending Home Sales Index is up 11 percent from its low of the year, according to the National Association of REALTORS®, and well ahead of its rolling 6-month average.

Unfortunately, national data isn't always helpful for buyers and sellers nationwide. To help make data more relevant, therefore, the official Pending Home Sales Index report includes a region-by-region breakdown. 

Between May and June 2011, results were mixed:

• Northeast Region: -0.4%
• Midwest Region : -3.7%
• South Region : +4.4%
• West Region : +6.4%

However, even the value of regional data may be dubious.

The West Region, for example, which showed big gains in June, is comprised of multiple states containing thousands of cities and towns. Some of those areas outperformed the region, and some of them underperformed. The Pending Home Sales Index doesn't show which towns did which. It can't.

For everyday buyers and sellers , it's the local data that matters.

The Pending Home Sales Index shows that more contracts were written in June than in April or May -- a good sign for housing overall. And because 80% of all contracts close within 60 days, we can expect the summer's home resale activity to be high.

This leads home prices higher.

With mortgage rates low and home sales spiking, now may be the best time to buy a home in 2011. Home prices appear to be rising and mortgage rates should, too.

Existing Home Sales Fall To 8-Month Low

Home resales slipped for the 3rd straight month, according to data from the National Association of REALTORS®.

The Existing Home Sales posted a 1 percent drop from May as the number of homes sold fell to a seasonally-adjusted, annualized 4.77 million units. It's the monthly report's lowest reading since November 2010.

The report also showed the national supply of homes for sales rising to 9.5 months -- also its highest reading since November 2010.

Home Supply is the amount of time it would take to exhaust the complete home inventory at the current pace of sales.

June's Existing Home Sales data would have been stronger if not for a high contract cancellation rate. As compared to May's 4 percent rate, June's cancellation rate was 16 percent; an elevated figure that "stands out in contrast" to what's typical, according to the REALTOR® trade group.

By region, home resale activity varied:

• Northeast : -5.2% from May 
• South :+0.5% from May
• Midwest : +1.0% from May
• West : -1.7% from May

This disparity from region-to-region highlights an important housing market concept. Namely, that all real estate is local. Because just as the Existing Home Sales varies on a regional level, it varies on a state-wide level, too.

What's true for California housing is not necessarily what's true for Florida housing, for example. Each of the 50 states has its own trends, and within those 50 states, there are thousands of cities and neighborhoods, each with their own trends, too.

The "national housing market" doesn't exist, so national data is rendered somewhat useless.

For data in your local market, talk to your real estate agent.

Existing Homes Sales Slip In May

Home resales slipped 4 percent in May, falling below the 5,000,000-unit mark on a seasonally-adjusted, annualized basis for the first time since February.

April's resales were revised lower, too.

Analysts were surprised by the figures because it runs counter to the National Association of REALTORS® monthly Pending Home Sales reports.

The association's Pending Home Sales Index is purported to be a forward-looking indicator for the housing market because 80% of homes under contract close within 60 days and recent Pending Home Sales readings show an increase in "pending" homes.

This month's Existing Home Sales, however, fell flat.

May's drop in home resales wasn't limited to a particular region or price point, either. All 4 geographic regions lag last May's results. Five of the 6 valuation ranges fell, too.

• $0-$100,000 : +6.7 percent annual change
• $100,000-$250,000 : -21.6 percent annual change
• $250,000-$500,000 : -16.0 percent annual change
• $500,000-$750,000 : -11.0 percent annual change
• $750,000-$1,000,000 : -20.7 percent annual change
• $1,000,000 or more : -11.0 percent annual change

The Existing Home Sales report wasn't all bad, however.

Although the months of housing stock rose to 9.3 in May, the number of homes for sale nationwide fell 1%. This suggests that there weren't as many buyers in May as compared to April -- a function of weather, jobs and the economy. Since April, the jobs market and the economy have shown steady, slow improvement and Mother Nature has been less destructive.

Home resales should rebound in June and July, therefore.

If you're a buyer in today's market, home supplies are higher and mortgage rates are lower. The combination makes for ample bargain-hunting. There's excellent "deals" to be found. Ask your real estate agent for help in finding them.

"Homes Under Contract" Plunge 12 Percent In April

Hurt by foul weather and a soft market, the Pending Home Sales Index plunged 12 percent in April.

The monthly index is published by the National Association of REALTORS® and measures the number of homes on which new contracts have been written. 

It's the association's lone "forward-looking" report; meant to predict future, closed home sales. 80% of homes under contract close within 2 months.

Therefore, if the April Pending Home Sales Index is accurate, we should expect home sales to decline through June and July.

On a regional basis, "pending homes" varied. The Northeast Region posted growth. None others did.

• Northeast Region: +1.7% from March
• Midwest Region : -10.4% from March
• South Region : -17.2% from March
• West Region : -8.9% from March

But even regional data remains too broad to be useful to everyday buyers and sellers. Housing is local and that means that each block, of each street, in each city has its own market and economy. Grouping 9 states into a single "region" is neither helpful nor relevant.

That said, we can't ignore the data in its entirety.

Housing is believed to be a key component in the nation's economic recovery. Fewer home sales will retard growth, and slower growth leads mortgage rates down.

Home Affordability hit record-highs last quarter, and should do the same in this one. Homes now sell at discounts to prior prices and mortgage financing is cheap. Buyers tend to be drawn to favorable markets such as this, and that will pressure home prices higher.

If you're in the market for a home today, conditions look good. Talk to your real estate agent to gauge your options.

Distressed Homes Now Selling At A 20 Percent Discount

The housing market recovery stalled last month. At least temporarily.

According to the National Association of REALTORS®, Existing Home Sales slipped 1 percent in April from the month prior, falling to 5.05 million units on a seasonally-adjusted, annualized basis. The reading is exactly in-line with report's 6-month average which also reads 5.05 million units.

The data may appear "average", but there's another angle to consider. 

In April, as compared to March, the supply of existing homes for sales spiked. At the current pace of home sales, it would now take 9.2 months to exhaust today's complete home inventory. This is almost one full month worse than March. It's the worst home supply reading of the year.

There are also more homes "on the market" today than at any time since September 2010.

Other noteworthy statistics in the April Existing Home Sales report include:

• 31 percent of all homes sold in April were purchased with cash
• First-time home buyers bought 36 percent of all homes in April
• Distressed properties typically sold at a 20 percent discount

This "discount", it should be noted, is a major reason why distressed properties accounted for 37 percent of the home resales in April. Home buyers are finding bargains when they're willing to consider homes in various stages of foreclosure and short sale.

Overall, the April Existing Home Sales report represents opportunity for home buyers. Home sales are stagnant, supplies are rising and there's no shortage of properties from which to choose. Furthermore, mortgage rates remain low.

If you're considering a home purchase this fall, home supply may not be as ample, and financing conditions may not be as favorable, post-Labor Day. Talk to your real estate agent about what's possible today. You may want to move up your time frame.

October Existing Home Sales : Buyers And Sellers In Balance

After two months of surging sales, home resales fell by 100,000 units last month to 4.4 million homes nationwide.

October's Existing Home Sales tally is slightly below the report's 6-month rolling average, according to the National Association of REALTORS® -- a time span which includes this year's $8,000 federal home buyer tax credit's tail end.

Housing statistics have been wildly inconsistent during that period.

For the future of Hayward housing markets, though, it's encouraging that first-time and investment property buyers were both outnumbered by "move-up" buyers; buyers that have sold their respective homes in favor of larger ones. It's the move-up buyers that power housing.

In October, buyer profiles broke down as follows:

• First-time buyers : 32 percent of all buyers, unchanged from September
• Repeat home buyers : 49 percent of all buyers, down one tick from September
• Investors : 19 percent of all buyers, up one tick from September

As a point of comparison, first-timers represented 50 percent of all purchases in October 2009.

For home buyers, October's Existing Home Sales report is neither weak nor strong. It signals that, with mortgage rates low and home affordability high, housing may be reaching some form of balance. Because -- although home sales are down -- home supplies are down, too.

We can infer that buyers outnumber sellers, but probably not by much. In most areas, negotiation leverage is still up for grabs.

At the current pace of sales, the complete housing stock would be depleted in 10.6 months.

Pending Home Sales Slip In September, Suggesting A Buyer's Market Until January

After 3 straight months of improvement, the Pending Home Sales Index slid lower in September. As compared to August, September's reading fell 2 percent.

A "pending home sale" is a home under contract to sell, but not yet closed. The data is drawn from a combination of local real estate associations and national brokers, and represents 20 percent of all purchase transactions in a given month.

Because of the large sample set, and because 80 percent of homes under contract close within 60 days, the Pending Home Sales Index is a terrific future indicator for the housing market. A high correlation exists between the Pending Home Sales Index and the NAR's monthly Existing Home Sales report issued two months hence.

Expect home sales to idle into the New Year, therefore.

For home buyers in Hayward , this is good news. Over the last two months, housing markets have overwhelmingly favored home sellers.

Consider than, since June, the volume of both new home sales and existing home sales has increased, causing the available home inventory to fall by months. Meanwhile, helped by low interest rates, demand from buyers has remained relatively stable.

As with everything in economics, falling supply with constant demand leads to higher prices.

Therefore, the Pending Home Sales Index's fading September figures suggest a more balanced supply-and-demand curve in the months ahead, a move that should suppress rising home prices and shift negotiation leverage back to the buy-side. 

So long as mortgage rates remain rock bottom, the autumn season is looking like a terrific time to buy.

Existing Home Sales Jump; Housing Market Shows Spark

Existing home sales jumped 10 percent in September, the biggest monthly jump on record and a signal that the housing market may be returning to a normal sales pattern post-$8,000 federal tax credit.

Existing Home Sales counts home resales (i.e. not new construction) and 80 percent of home resales close within 45-60 days. It's no surprise, therefore, September's data is strong.

Throughout the July and August, mortgage rates were in free-fall, pushing home affordability to near-record levels. Concurrently, the number of homes available for sale climbed to multi-year highs.

"Deals" were in ample supply this summer and eager Hayward home buyers snatched them up.

Some of these deals included "distressed properties", a categorization that includes homes in various stages of foreclosure or short sale, accounted for 35 percent of all sales, an uptick of 1 percent from August.

According to the National Association of Realtors®, home resales split as follows:

• First-time buyers : 32 percent of all buyers
• Repeat home buyers : 50 percent of all buyers
• Investors : 18 percent of all buyers

By contrast, in November 2009, first-timers accounted for more than half of all resales.

For home buyers, September's Existing Home Sales report foreshadows a more competitive housing market through the New Year. In addition to rising sales volume, home supplies are down by nearly 2 months from July.

At the current pace of sales, the complete housing stock would be depleted in 10.7 months.

Existing Home Sales Rebound In August, Give Hope For Autumn

Sales of existing homes in recovered in August, perhaps the result of a post-tax credit normalization.

As compared to July, Existing Home Sales rose 8 percent in August, buoyed by falling interest rates and slow-to-rise home prices. There's lot of "good deals" out there and home buyers in Hayward are taking advantage.

The housing gains are relative, however. August's total units sold barely crossed 4 million and still trails the average figures of the last few years by close to 1 million units.

Despite that, the August Existing Home Sales report can be considered a strong one. This is for several reasons:

1. Sales volume increased in August without tax credit or government intervention
2. Sales growth is not limited by geography. All 4 regions -- Northeast, Southeast, Midwest, and West -- showed improvement last month.
3. Repeat buyers are driving the market, representing 48 percent of sales, up from forty-three percent in July.

And, perhaps most important to the housing market market, the number of available home resales dropped by almost one full month last month.  At the current sales pace, the national inventory would be depleted in 11.6 months.

For home buyers, the data presents an interesting opportunity. With average mortgage rates rising from their best levels ever and home affordability cresting , this autumn may represent the turn-around point for the housing market nationwide.

If you're planning to move in early-2011, consider moving up your time frame.

Home Sales Are Back On The Rise After A 2-Month Pullback

Just one week after reports of Existing Home Sales and New Home Sales plunging, the housing market is signaling that auturm may fare better than did summer.

The number of homes under contract to sell rose 5 percent in July.

The data comes from the July Pending Home Sales Index, as published by the National Association of Realtors®. By definition, a "pending home sales" is a home that is sold, but not yet closed.

Historically, 80% of such homes close within 60 days which makes the Pending Home Sales Index an excellent, forward-looking indicator for the real estate market.

Indeed, the nationwide drop in home sales this summer was foreshadowed by the Pending Home Sales report.  The index dropped 30 percent in May. Then, two months later in July, it was shown that Existing Home Sales volume dropped 29 percent.

That's a strong correlation.

Now, to be fair, the July Pending Home Sales Index is still relatively low; the second-lowest on record and well below last year's numbers. But, the tick higher last month shows how housing may be stronger than than what the headlines report.

It appears that buyers in Hayward took advantage of rising inventory, cheap financing, and stagnant prices, and pushed the market forward. We should expect similarly promising numbers when September's Existing Home Sales data is released.

New Home Sales Drop In July -- Just Like Existing Home Sales

One day after the National Association of Realtors released the softest Existing Home Sales report since 1995, the U.S. Census Bureau released a similarly-weak New Home Sales report.

Americans bought just 276,000 newly-built homes in July. That marks the fewest units sold since the government started keeping records in 1963.

In addition, although new home inventory actually dropped 2,000 units in July, the slowing sales pace still managed to push the national supply higher by 1.1 months.  At July's rate of sales, the nation's new home inventory would be exhausted in just about 9 months.

None of this news should surprise you, though. It's all been foreshadowed for weeks.

First, Single-Family Housing Starts have dropped in every month since April.  A "housing start" is a when a home starts construction and, because fewer homes are under construction, we should expect fewer homes to be sold.

Second, Building Permits are down.  The number of new permits peaked in March and have fallen 23 percent since.

And, lastly, home builder confidence ranks at its lowest levels since early-2009. A contributing factor in that pessimism is dwindling buyer foot traffic.

Regardless, there's two sides to the story. Although the New Home Sales data looks bad for builders, it can be terrific  for you. This is because new homes are more likely to be discounted when the sales cycle favors buyers.

Coupled with ultra-low mortgage rates, the cost of buying a newly-built home in Hayward may have just become cheaper.

Existing Home Sales Plummet In July; Home Buyers Gain Leverage

The number of home resales plunged by 1.4 million units in July, according to the National Association of Realtors®' Existing Home Sales report.

It's a drop of 27 percent from June; single-family home resales are at the report's lowest levels since May 1999.

Furthermore, because of the sharp drop in sales volume, home inventories are spiking.

Homes for sale nationwide fell just short of 4 million units in July and, at the current sales paces, it would take 12.5 months for the existing inventory to be absorbed.

Home supply was just 8.9 months in June.

For home sellers in Hayward , the Existing Home Sales report is a bit of bad news.  Fewer sales and larger inventories put negotiation leverage in the hands of the buyers which, in turn, creates downward pressure on home prices.  It may also increase time-on-market.

For home buyers, however, the data is decidedly welcome. After a stimulus-driven spring buying season that favored sellers, the summer and early-fall market seem to favor buyers. More choices and more leverage is a positive.

It helps that home affordability is up, too. 

Although there's reports that home values are rising, their modest gains are more than countered by the ongoing rally in mortgage rates. Freddie Mac says that 30-year fixed rate mortgage rates are at their lowest levels in history and, at today's rates, every one-eighth drop in mortgage rates roughly offsets a 1.5% increase to home price.

Mortgage rates are down 0.75 percent since mid-April.

Existing Home Sales Drop In June But Hint At Support For Higher Price Tiers

Consistent with most post-home buyer tax credit housing news, the National Association of Realtors® says Existing Home Sales eased lower last month.

An "existing home" is a home that cannot be considered new construction.

The 5 percent drop in sales from May to June was expected, but a closer look at the month's data reveals some interesting trends.

First, repeat buyers accounted for 44 percent of home resales in June, up from 40 percent in May. That's a healthy increase for just 4 weeks' time and the tax credit is a likely catalyst. First-timer buyers bought starter homes owned by former first-timers, who were then free to "move up" to larger, more expensive property.

Housing markets can be trickle-up and, not coincidentally, the jumbo/luxury housing market is now in the midst of rebound.

Second, June's "distressed sales" accounted for 32 percent of all home resales, up from 31 percent in May.

A figure like this hints at the large role foreclosures continue to play in a Hayward home buyer's home search strategy.  And why not? The National Association of Realtors® suggests that distressed homes are sold at a 15 percent discount.

Lastly, take note that home inventories are rising. June's 8.9 months of supply is the highest in 10 months. Excess supply leads home prices lower, all things equal.

Overall, the Existing Home Sales data from June is a mixed bag. There's support for the middle- and upper-price tiers, but a growing overhang of supply. The market looks favorable for buyers given low mortgage rates and strong negotiation leverage.

Buyers Take The May 2010 New Home Sales Data All The Way To The Bank

One month after the federal homebuyer tax credit's official expiration, the New Home Sales report turned in its worst showing ever.

In May 2010, for the first time in 11 months, the inventory of unsold new homes crossed the 8-month marker, posting an 8.5 month supply overall.

Additionally, new homes sales volume fell to 300,000 units nationwide -- a drop of 32% and its lowest level since the Commerce Department started tracking data in 1963.

Now, universally, the press is referring to the May New Home Sales report as "poor".  A closer look, however, shows that may not be the case.

For one, we have to keep New Home Sales in perspective as a percentage of overall home sales. Yes, there were just 300,000 new homes sold in May, but there were also 5.66 million "existing" homes sold.

New Home Sales, therefore, accounted for just 5 percent of the total housing market -- a very small percentage.

Another reason why the weak New Home Sales data isn't so awful is that, when New Home Sales stall, it actually benefits home buyers.  Excess supply puts a strain on sellers which, in turn, gives buyers a tremendous amount of leverage in negotiation.

When home inventories are high, builders are more apt to appease their customers in hopes of making a sale.  For Hayward home buyers, this can result in buying a better product at a lower price.

Especially with builder confidence plummeting.

Since February 2009, housing has shown steady gains. There's been both peaks and valleys across units, inventories, and prices, but overall, the market is improving.  May's New Home Sales data shows how now may an opportune time to "buy new".