Existing Homes Sales and Prices Rise
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 Washington, D.C.-based National Association of Realtors.
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 Washington, D.C.-based Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 3.6 percent in August from a record low 3.55 percent in July; the rate was 4.27 percent in August 2011.
Builder Confidence Rises for Fifth Month
Builder confidence in the market for newly built, single-family homes rose for a fifth consecutive month in September to a level of 40 on the Washington, D.C.-based National Association of Home Builders/Wells Fargo Housing Market Index. This latest three-point gain brings the index to its highest reading since June of 2006.
"This fifth consecutive month of improvement in builder confidence provides further assurance that the housing market is moving in a positive direction, but there's still a long way to go on the road to recovery and several obstacles are slowing our progress," said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. "In particular, unnecessarily tight credit conditions are preventing many builders from putting crews back to work, which would create needed jobs, and discouraging consumers from pursuing a new-home purchase."
More Borrowers Now Above Water
Santa Ana, Calif.-based CoreLogic says 10.8 million, or 22.3 percent, of all residential properties with a mortgage were in negative equity at the end of the second quarter of 2012. This is down from 11.4 million properties, or 23.7 percent, at the end of the first quarter of 2012. An additional 2.3 million borrowers possessed less than 5 percent equity in their home, referred to as near-negative equity, at the end of the second quarter. Approximately 600,000 borrowers reached a state of positive equity at the end of the second quarter of 2012, adding to the more than 700,000 borrowers that moved into positive equity in the first quarter of this year.
"The level of negative equity continues to improve with more than 1.3 million households regaining a positive equity position since the beginning of the year," said Mark Fleming, chief economist for CoreLogic. "Surging home prices this spring and summer, lower levels of inventory and declining REO sale shares are all contributing to the nascent housing recovery and declining negative equity."
Single-Family Construction Fuels Increase
Nationwide housing production rose 2.3 percent to a seasonally adjusted annual rate of 750,000 units in August, according to the Washington, D.C,-based U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This increase was fueled entirely by gains in the single-family sector, where the pace of new construction rose in every region for a combined 5.5 percent gain to 535,000 units.
"The pace of overall housing production has been edging gradually upward all year as consumers become more confident in their local housing markets, and the latest data are further evidence that the housing recovery is here to stay," added NAHB Chief Economist David Crowe. "That said, the pace of this recovery continues to be constrained by various hurdles, including a tough lending environment, inaccurate appraisals and more recently, rising prices on key building materials."
California Recognizes Window Film
The Sacramento, Calif.-based California Energy Commission has placed window film, a polymer material offering energy efficiency advantages, into the state building code for the first time in the U.S., according to the International Window Film Association, a nonprofit group representing the industry. The change to the building code, effective January 2014, means window film is recognized in California as a building product like glass or roofing materials, although primarily for retrofit applications.
Kitchen & Bath Design
2013 NKBA Design Competition Call for Entries
The 2013 Washington, D.C.-based NKBA Design Competition is open for entries. Projects submitted must have been installed between Nov. 28, 2011, and Oct. 31, 2012. Winners will be announced at the 2013 Kitchen & Bath Industry Show in New Orleans in April 2013. For information, go to: Nkba.org.
Outlook Better than Originally Thought
Multi-family and single-family housing starts are expected to experience a slightly better increase this year than what was initially thought, up to 19 percent over 2011 with additional increases in 2013 and 2014, according to the 2011/2012 U.S. Industry Statistical Review and Forecast jointly issued by the Schaumburg, Ill.-based American Architectural Manufacturers Association and the Washington, D.C.-based Window and Door Manufacturers Association. Residential improvement expenditures are expected to see a similar shift.
The report includes information on window, door and skylight market trends and product relationships. Historic data for 2006 through 2011 and forecast data for 2012 through 2015 are also included in the report. Forecasts are based on projections of construction activity as of August 2012. For more information: Aamanet.org or Wdma.com.