Recently released housing statistics were marginally better than previous numbers, although predicting a conclusive trend toward a reversal in the market would be premature.
Existing-home sales increased 5.1 percent in February, reversing losses in January. Despite the February increase in existing-home sales, activity remains relatively soft, reflecting additional layoffs and buyers waiting for housing provisions in the economic stimulus package to take effect, according to the National Association of Realtors.
At the same time, a new survey indicates that 23 percent of adults plan to purchase a home in the next five years, and more than half of them (53.5 percent) are first-time home buyers, according to Move, Inc., operator of Realtor.com.
Meanwhile, sales of new single family homes rose for the first time in seven months in February, according to the Commerce Department. The report showed a 4.7 percent gain in new-home sales to a seasonally adjusted annual rate of 337,000 units, along with upwardly revised figures for each of the previous three months.
In another development, U.S. home prices rose 1.7 percent on a seasonally adjusted basis from December to January, according to the Federal Housing Finance Agency’s (FHFA) monthly House Price Index.
However, December’s previously reported 0.1 percent increase was revised to a 0.2 percent decline. For the 12 months ending in January, U.S. prices fell 6.3 percent. The U.S. index is 9.6 percent below its April 2007 peak, according to FHFA.
Lawrence Yun, NAR chief economist, said first-time buyers accounted for half of all home sales last month, with activity concentrated in lower price ranges. “Because entry level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February,” he said. “Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price.”
The national median existing-home price for all housing types was $165,400 in February, down 15.5 percent from a year ago when the median was $195,800 and conditions were close to normal; the median is where half of the homes sold for more and half sold for less.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 5.13 percent in February from a record low 5.05 percent in January; the rate was 5.92 percent in February 2008. Last month’s average mortgage rate was the second lowest since data collection began in 1971.
May Outpace New Construction
The U.S. market for “green” building materials generated sales of almost $57 billion in 2008 and is projected to grow 7.2 percent annually, to more than $80 billion, in 2013, outpacing the growth of building construction expenditures over that period, according to a new study from The Freedonia Group, Inc., a Cleveland, Ohio-based industry research firm.
Although green building materials are expected to account for an increasing share of materials used, growth will be driven primarily by the recovery of the residential construction market through 2013 as it rises from its depressed 2008 level, the Freedonia Group said.
Forest Stewardship Council (FSC)-certified lumber and wood panels are expected to be the fastest growing green products, growing more than three times as fast as the overall market for wood panels, the research firm found. Other products expected to see fast growth through 2013 include water-efficient plumbing fixtures and fittings, energy-efficient lighting fixtures, and concrete made from recycled materials, the Freedonia Group said.
Class Action Suit Filed
A federal class action suit has been filed on behalf of Florida homeowners against the foreign manufacturer of Chinese drywall, Knauf Plasterboard Tianjin Co. Ltd., and the foreign company that distributed it in the United States, Rothchilt Int’l., LTD.
Drywall manufactured in China was used in thousands of homes built in the United States during the building boom between 2004 and 2007. The lawsuit claims toxic chemicals that emanate from the drywall have damaged houses, fixtures and personal property, rendering the homes unsafe and uninhabitable. In addition to receiving relief for the damages to their property, members of the class action are seeking medical monitoring for the adverse effects of prolonged exposure to the toxic chemicals.
An attorney for the law firm filing the suit said it could be potentially one of the largest product liability cases related to home construction in U.S. history.
Appliance ShipmentsDeclines Posted
Factory shipments of major home appliances, mirroring the overall trend in the housing market, fell in February to 4.6 million units, down 13.9 percent from the 5.3 million units shipped in February of 2008, according to the latest figures from the Association of Home Appliance Manufacturers. The Washington, D.C.-based AHAM reported that year-to-date shipments through February, at 8.6 million units, were off 19 percent from the same two-month period last year, when 10.6 million units were shipped.