Economic and Housing Market Key Indicators
The National Association of Realtors reported positive news on the housing front at the beginning of the month. The realtor group’s Pending Home Sales Index rose for the seventh straight month in August. While encouraging, the fate of a housing market recovery is more than likely now in the hands of the broader economy. With persisting high unemployment and uncertain consumers, housing demand is not likely to substantially increase until there are more convincing signs we are in a true recovery phase.
The Economy
The consumer price index in September increased slightly driven by higher transportation and energy costs. The consumer price index in September increased 0.1% from August on a non-seasonally adjusted basis and increased 0.2% from the previous month on a seasonally-adjusted basis. The core-CPI, which excludes the food and energy portions that are seen by some as skewing the index by virtue of their volatility, increased 0.2% from August on a non-seasonally adjusted basis while also increasing 0.2% from the previous month on a seasonally-adjusted basis. On an unadjusted basis, headline CPI fell 1.3% from its year ago levels while core CPI increased 1.5% year-over-year in September. This is the seventh straight month that headline consumer prices have recorded a year-over-year decline. It will be important to keep an eye on inflation going forward due to rising crude prices and the massive government spending that has taken place to restore the economy.
US retail sales fell 1.5% in September due to the expiration of the Cash for Clunkers program which caused auto sales to fall 10.4% from the previous month. However, excluding auto sales, retail sales increased a better than expected 0.5%. The increase gives hope that consumers are starting to spend money again even though unemployment is still rising. Obviously though, such a trend is unsustainable unless the economy sees a return to job growth conditions. The drop off in auto sales from the ending of the Cash for Clunkers program may also be instructive when it comes to the housing tax credit, which expires in November. Should the home buyer tax credit be allowed to expire, we will likely see an impact on home sales during what is already a seasonably slow time of year.
Housing Market
The National Association of Realtor’s Pending Home Sales Index increased 6.4% to a reading of 103.8 in August from a reading of 97.6 in July. This was the seventh straight month in which the index has increased and the highest it has been since March 2007.
National average mortgage rates increased from the previous week to 4.92% in the latest Primary Mortgage Market Survey released weekly by Freddie Mac on October 15th. This is the first time mortgage rates have recorded a weekly gain since the end of August. It is the second straight week that mortgage rates have averaged less than 5.0% while remaining at historically low levels. In the week ending October 12th, the MBA’s seasonally-adjusted purchase index dropped 5.0% from the previous week and was down 7.32% compared to the same time last year. Purchase applications were coming off their highest levels since the beginning of the year in the previous week. Lower rates have spurred mortgage application activity over the past several weeks.
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Texas To Lead Economic Recovery
SAN ANTONIO (San Antonio Business Journal) – Four major metropolitan areas in Texas will be among the first in the nation to recover from the recession, according to a nationwide forecast by IHS Global Insight.
San Antonio and Austin will lead the way, bouncing back to their prerecession job levels sometime next year, predicts the Lexington, Massachusetts based economic forecasting firm.
Houston and Dallas–Fort Worth are among eight other metropolitan areas predicted to recover by 2011.
Although, I have seen conflicting data that has these Texas cities flipped, with Dallas-Plano-Irving and Houston leading the way, with Austin and San Antonio following closely behind. Either way, the hits just keep on coming, providing undeniable evidence that Texas is – and will remain – the place to be. And, with new home inventory shrinking in the DFW Metroplex to healthy market levels, the outlook in North Texas is bright, indeed.
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Dallas Home Prices Firm in Latest Study 1.6% Decline Smallest in Two Years
Dallas home prices fell by the smallest percentage in almost two years in the latest housing market snapshot.
DFW prices were down only 1.6 percent in July from a year earlier in the closely watched S&P/Case-Shiller home price index.
And local home prices were up from June to July, the fifth consecutive month of increases. The July figure is also the highest point in the home price index since last September.
The small annual decline in North Texas home prices is a big improvement from earlier in the year, when the Case-Shiller index showed that prices were falling by more than 5% from 2008.
The just-released data is more proof that home price declines bottomed in North Texas in early 2009.
“The rate of annual decline in home price values continues to decelerate, and we now seem to be witnessing some sustained monthly increases across many markets,” Standard & Poor’s David Blitzer said Tuesday in the report. “These figures continue to support an indication of stabilization in national real estate values.”
Analysts are keeping an eye on how the housing market reacts later this year when a popular federal home buying tax credit expires.
Nationwide home prices in July were still 13.3 percent below where they were a year earlier. But the index has been higher for three consecutive months, a strong indication that home prices have bottomed out.
US home prices are still almost 30 percent below their peak in mid-2006.
In the DFW area, July home prices were about 4 percent less than they were at the top of the market here in June 2007. The Case-Shiller numbers add to growing evidence that the worst of the North Texas home price shakeout is over.
So far in 2009, the median home sales prices have dropped only about 2 percent in the residential sales industry’s Multiple Listing Service. And the Case-Shiller decline estimate is even less.
“That’s really saying prices are flat,” said David Brown, who heads housing analyst Metrostudy’s Dallas office. “That’s a very small number.” This while some areas of the country are still seeing big home price reductions.
In Las Vegas, prices were down 31.4 percent in July from a year earlier, according to Case-Shiller. Values dropped by 28 percent in Phoenix and 24.6 percent in Detroit.
Case-Shiller tracks the prices of typical single-family homes in each metropolitan area. The index does not include condominiums and townhouses. It only covers pre-owned properties – no new construction. The Case-Shiller researchers compare sales of specific properties over time.
Plano Texas, Dallas’ affluent northern suburb, is faring even better, of late. Analysis prepared by Altos Research which are updated daily, shows trend lines in the Plano housing market with declining inventory and increasing median prices. Lexington Luxury Builders provides these Plano Housing Market Charts for the convenience of our readers.
Original Article reported by STEVE BROWN | The Dallas Morning News
US Housing Market Update
 New home sales increased for the fifth straight month in August fueled by builder incentives, low mortgage rates, attractive prices and the homebuyer tax credit. New home sales increased 0.7% from the previous month to an annual rate of 429,000 units. New home sales for the previous three months were also revised higher by 9,000 units. The annual pace of new home sales is now at the highest level since September 2008.
Median new home prices in August declined to $195,200 from an upwardly revised $215,600 in July. Median new home prices are now 11.7% lower than the same year-ago period hitting their lowest level since October 2003. The median new home price has now recorded eight straight months of year-over-year declines. For those of you keeping score, that means that new home prices have retreated to the lowest level in six years. For those who are still sitting on the fence, thinking about buying a home, but too cautious to commit, remember that fortune favors the bold, and a year from now you’ll wish you had pulled the trigger on your purchase in October 2009. We have hit bottom. New home inventories declined to 261,000 from July’s figure of 271,000 as the decline in the number of new homes for sale has now continued unabated, failing to record a monthly increase since May 2007. Seasonally-adjusted inventory of unsold homes have now declined for 28 straight months to 262,000 units. Declining inventory levels and increased demand for new homes in August helped inventory (when viewed as the number of months of supply at the present rate of sales) improve to its lowest level since January 2007, declining from 7.6 months supply in July to 7.3 months in August. With inventory on the decline and demand remaining steady, inventory is falling back towards the 6 months of supply that is considered normal in a healthy housing market. Existing home sales in August fell for the first time in five months despite favorable mortgage rates and lower prices. Annualized sales of existing homes declined 2.7% from July levels to 5.10 million units. Existing single-family home sales declined 2.8% from last month to 4,480,000 units while condo and co-op sales were down 1.6% from July to 620,000 units. However, sales of existing homes are still up 3.4% from their same year-ago levels of 4.93 million units. This is the second straight month that existing home sales have recorded year-over-year increases. Existing home inventory dropped to its lowest level since January last month. Inventory of existing homes dropped almost 11% to 3,622,000 units from 4,062,000 units in July. Months of existing inventory dropped last month to 8.5 months of supply on the market, reaching the lowest level since April 2007. Mortgage rates declined last week to 4.94% in the latest Primary Mortgage Market Survey released October 1st. Rates have not increased since the end of August and are now at their lowest levels since the end of May. For more detailed information on the indicators discussed in this article, please visit the following links: |
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Texas Housing Markets Are Forecast To Be Most Stable In Nation
CARY, NC (Local Market Monitor) – Five large Texas cities and ten smaller ones are among the nation’s top markets when it comes to expected home price performance, according to Local Market Monitor’s latest Home Price Forecast.
Among the largest markets — those with populations exceeding 600,000 — Dallas|Plano|Irving, Fort Worth|Arlington, Houston|Sugar Land|Baytown, San Antonio and Wichita Falls filled five spaces on the ten-slot list of cities with the best expected performance in home price over the next year.
The same survey of the smallest US markets revealed ten Texas cities were tops, tied with other cities across the country. These were Abilene, Amarillo, Brownsville-Harlingen, College Station–Bryan, Corpus Christi, Killeen–Temple–Fort Hood, Laredo, Lubbock, Texarkana and Waco.
The study predicts local market behavior over the upcoming 12 months in over 300 markets, identifying those that are stable and have opportunity for growth.
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