Remodeling Index Adjusts Downward
The Remodeling Market Index slipped under pressure from a softening labor market in the second quarter, dropping two points to 45, according to the Washington, D.C.-based National Association of Home Builders. The downward adjustment comes after the RMI reached 48 twice in 2011, the highest reading since 2006.
The RMI component measuring current market conditions dropped to 46 from 49 in the first quarter. The RMI component measuring future indicators of remodeling business remained unchanged at 44.
“Remodelers have some backlog of jobs and along with higher-quality leads, and this is making them cautiously optimistic about the near future,” says NAHB Remodelers Chairman George “Geep” Moore Jr., GMB, CAPS, GMR, and owner/president of Moore-Built Construction & Restoration Inc., Elm Grove, La. “The positive outlook is constrained by continuing credit constraints and inaccurate appraisals that make customer financing difficult for big jobs like additions and whole house remodels.”
Existing-home Prices Rise Again, Sales Down
Existing-home prices continued to show gains but sales fell in June with tight supplies of affordable homes limiting first-time buyers, according to the Washington, D.C.-based National Association of Realtors. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 5.4 percent to a seasonally adjusted annual rate of 4.37 million in June from an upwardly revised 4.62 million in May, but are 4.5 percent higher than the 4.18 million-unit level in June 2011.
New-home Sales Decline
Sales of newly built, single-family homes slowed 8.4 percent to a seasonally adjusted annual rate of 350,000 units in June following an upwardly revised, strong pace in the previous month, according to Washington, D.C.-based HUD and the U.S. Census Bureau.
Pending Home Sales Above Year Ago
Pending home sales declined in June but marked 14 consecutive months of year-over-year gains, according to the National Association of Realtors. The Pending Home Sales Index, a forward-looking indicator based on contract signings, slipped 1.4 percent to 99.3 in June from a downwardly revised 100.7 in May but is 9.5 percent higher than June 2011 when it was 90.7. The data reflect contracts but not closings.
Lawrence Yun, NAR chief economist, says inventory shortages are a factor. “Buyer interest remains strong but fewer home listings mean fewer contract signing opportunities,” Yun said. “We’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors.”
Home Prices Continue to Rise
Average home prices increased by 2.2 percent in May over April for the 10- and 20-City Composites, according to the New York-based S&P/Case-Shiller Home Price Indices. Prices fell from May 2011 to May 2012 by 1 percent for the 10-City Composite and by 0.7 percent for the 20-City Composite. Both composites and 17 of the 20 metropolitan statistical areas saw increases in annual returns in May compared to April.
Index Spotlights 80 Improving Markets
A total of 80 metropolitan statistical areas across 32 states and the District of Columbia were listed as improving housing markets on the Washington, D.C.-based National Association of Home Builders/First American Improving Markets Index for August. This included 75 markets that retained their places on the list along with five new ones, while nine areas fell from the list due primarily to slight movements in house prices. The five metros that were added to the list this month include Miami and Palm Bay, Fla.; Hinesville, Ga.; Terre Haute, Ind.; and Lubbock, Texas.
Realtors Confidence Index
Buyer traffic index: 60
Seller Index: 41