Home mortgage rates are at a 6 month high. 

30 year mortgage rate: 4.61% up from 4.46%.

15 year mortgage rate: 3.96% up from 3.81%

Housing demand appears to be slowly picking up. “Existing pending sales jumped 10.4% in October to the strongest pace since April, according to the National Association of Realtors.

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Source: U.S. Census Bureau News

Here is a breakdown;

Sales fell 32.7% below the April 2010 and were off 18.3% below the May 2009.

• Median sales price decreased 9.6% from May 2009 to $200,900.

• Purchases dropped in all four U.S. regions last month.

• A record 53% sales drop occurred in the West.

• Supply of homes jumped to 8.5 month’s worth, up from 5.8 months in April.

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The National Association of REALTORS Press Release: Existing-Home Sales Rise
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, and are 22.8 percent higher than the 4.70 million-unit pace in April 2009.
…
Total housing inventory at the end of April rose 11.5 percent to 4.04 million existing homes available for sale, which represents an 8.4-month supply at the current sales pace, up from an 8.1-month supply in March.

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Mortgage Bankers Association reported that 1 in 7 U.S. households with a mortgage ended the first quarter in foreclosures or in late payments. A long path to recovery remains even though foreclosures rates have slowed down, a stockpile of loans are still present.

“It’s like shutting off the oil leak, but you still have a lot of oil in the Gulf to deal with,” Jay Brinkmann, the MBA’s chief economist

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Existing home sales rose in March, in part to the Governments homebuyer tax credit and more affordable home prices.

The NAR reports: Existing-Home Sales Rise
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 6.8 percent to a seasonally adjusted annual rate of 5.35 million units in March from 5.01 million in February, and are 16.1 percent above the 4.61 million-unit level in March 2009.
…
Total housing inventory at the end of March rose 1.5 percent to 3.58 million existing homes available for sale, which represents an 8.0-month supply at the current sales pace, down from an 8.5-month supply in February.

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For the first time in 5 weeks mortgage rates have fallen and backed off an 8 month high, yet still historically low. Spring selling is around the corner so rates will have to be attractive to assist in sales.

30 year fixed rate is at 5.07% down from 5.21% 8 month high. However, it’s still up from a year ago when rates were 4.71% an all time low.

Government incentives will be ending soon, notably the $8000 first time home buyer tax credit and the $6500 credit for home owners buying new houses, which will slow housing markets recovery.

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Census Bureau report

HOUSING STARTS

Privately-owned housing starts in February were at a seasonally adjusted annual rate of 575,000. This is 5.9 percent (±10.0%)* below the revised January estimate of 611,000, but is 0.2 percent (±9.8%)* above the February 2009 rate of 574,000.
Single-family housing starts in February were at a rate of 499,000; this is 0.6 percent (±10.6%)* below the revised January figure of 502,000. The February rate for units in buildings with five units or more was 58,000.

HOUSING COMPLETIONS

Privately-owned housing completions in February were at a seasonally adjusted annual rate of 700,000. This is 5.4 percent (±20.2%)* above the revised January estimate of 664,000, but is 15.5 percent (±13.6%) below the February 2009 rate of 828,000.
Single-family housing completions in February were at a rate of 458,000; this is 4.3 percent (±13.7%)* above the revised January rate of 439,000. The February rate for units in buildings with five units or more was 236,000.

The upside; the low level of housing starts is a result of the flooded housing inventory which is currently being absorbed. Why is that good news? Well the housing market can’t recover without decreasing the inventory.  

The downside; the housing market will recover slower than the overall economy, as result of a high unemployment rate and uncertain job security.

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Census Bureau press release: New Residential Construction   

HOUSING STARTS   

Privately-owned housing starts in January were at a seasonally adjusted annual rate of 591,000. This is 2.8 percent (±11.5%)* above the revised December estimate of 575,000 and is 21.1 percent (±12.3%) above the January 2009 rate of 488,000.   

Single-family housing starts in January were at a rate of 484,000; this is 1.5 percent (±11.3%)* above the revised December figure of 477,000. The January rate for units in buildings with five units or more was 100,000.   
 

HOUSING COMPLETIONS   

Privately-owned housing completions in January were at a seasonally adjusted annual rate of 659,000. This is 12.4 percent (±7.8%) below the revised December estimate of 752,000 and is 15.3 percent (±10.5%) below the January 2009 rate of 778,000.   

Single-family housing completions in January were at a rate of 427,000; this is 12.9 percent (±7.1%) below the revised December rate of 490,000. The January rate for units in buildings with five units or more was 215,000.   

The upside; the low level of housing starts is a result of the flooded housing inventory which is currently being absorbed. Why is that good news? Well the housing market can’t recover without decreasing the inventory.  

The downside; the housing market will recover slower than the overall economy, as result of a high unemployment rate and uncertain job security.  

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The U.S. Census Bureau reported a seasonally adjusted annual rate of 342,000 New Home Sales in December 2009. That is 8.6% below the December 2008 estimate of 374,000. New Home Sales will be hurting in 2010 with foreclosures expected to peak sometime this year.

This chart shows the monthly new home sales that is not seasonally adjusted.

Chart Source: CalculatedRiskBlog.com

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NAR Press Release: December Existing-Home Sales Down but Prices Rise; 2009 Sales Up
Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 16.7 percent to a seasonally adjusted annual rate1 of 5.45 million units in December from 6.54 million in November, but remain 15.0 percent above the 4.74 million-unit level in December 2008.
For all of 2009 there were 5,156,000 existing-home sales, which was 4.9 percent higher than the 4,913,000 transactions recorded in 2008; it was the first annual sales gain since 2005.
…
Total housing inventory at the end of December fell 6.6 percent to 3.29 million existing homes available for sale, which represents a 7.2-month supply4 at the current sales pace, up from a 6.5-month supply in November.
 
• On a percentage basis, the 16.7% monthly decline was the largest on record, dating back to 1968;
• Single-family home sales fell 16.8% (SAAR 4.79 million) and are 12.7% above the 4.25 million level in December 2008.
• Single-family sales rose 5.0% to 4,566,000 in 2009.
• First-time buyers purchased 43% of homes, down from 51% in November, according to a NAR survey.
• Median existing-home price for all housing types was $178,300 in December 2009 — a gain of 1.5% higher vs December 2008.
• Total housing inventory at the end of the year was down 6.6% to 3.29 million existing homes for sale — a 7.2-month supply;
• Raw inventory is 11.1% a year ago, the lowest level since March 2006;
Source Reference: NAR, via ritholtz.com 

Existing Home Sales – Non Seasonally Adjusted

 Graph Source: CalculatedRiskBlog.com

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