Tag Archives: housing market

NAR Reports Surge In Pending Home Sales

The National Association of Realtors (NAR) reports that the number of homes under contract increased in February to its highest level since June 2013.

The Pending Home Sales Index is based on pending sales of existing homes. When the contract has been signed but the transaction has not closed, it is a pending sale.

The Index is 12.0 percent above February 2014.

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Filed under Above the law

Georgia is 9th on List of States Where Small Businesses Hit Hardest By Housing Meltdown

According to the Daily Dose, small businesses in states hit hardest by the collapse of the housing market are having a hard time getting access to capital to grow and hire.

In early April, Pepperdine University, in partnership with Dun & Bradstreet Credibility Corp., surveyed almost 6,000 small businesses about their success in accessing capital.

Below is a list of the states where a high percentage of respondents said their growth was being impeded due to tight credit:

  1. Nevada (75 percent)
  2. New Mexico (72.6 percent)
  3. Maryland (70.5 percent)
  4. Florida (70.2 percent)
  5. Virginia (68.8 percent)
  6. Delaware (68.2 percent)
  7. North Carolina (67.7 percent)
  8. California (67.4 percent)
  9. Georgia (66.9 percent)
  10. South Carolina (66.1 percent)

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Filed under Georgia Law

Fannie Mae April Survey Indicates Americans More Optimistic About Housing

The expectation for home prices and the percentage of those who think the U.S. economy is on the right path reached record highs in Fannie Mae’s April 2012 National Housing Survey.

The Fannie Mae survey polled a nationally representative sample of 1,000 respondents aged 18 and older between April 4, 2011 and April 27, 2012.

I’m sorry to say that the Fannie Mae poll may only reflect a mere flicker of hope.  After the poll was completed, troubling unemployment numbers were released, and since a stronger housing market depends on an improving labor market the latter information undermined the former.

The recent unemployment numbers do “not provide comfort that the current environment supporting the housing market is brightening. Whether recent improvement in sentiment will translate into a stronger market for home sales depends on near-term developments in the labor market.” says Doug Duncan, Chief Economist at Fannie Mae.

I tend to agree, and while I hope that the poll is more than an aberration, I’m doubtful.

What do you think about the housing market?

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Filed under A Need to Know Basis

Assessing the Housing Market Today

Discussing the state of the housing market is becoming about as common as watching the morning news or pouring a cup of coffee. With so many homeowners wondering when to sell and home buyers wondering about their options, there is a keen interest in the latest housing market data.  Of course the data varies by state.

Existing Home Sales

Recent economic data indicates that slow progress is being made in reducing the inventory of distressed properties and the pace of reducing this inventory is accelerating.

Despite mortgage rates remaining at near record lows, sales of existing homes are slow with erratic improvement.  The prices of existing homes remain flat, in part due to the downward effect of distressed properties including foreclosure inventory.

New Home Sales

An interesting development is the uptick in new home sales in recent months. Depending on where you live, it is hard to miss the new construction of single family homes and townhomes.  These new homes are selling in select areas and the builders do not feel compelled to offer discounts.

Of course, the economy is still in recovery and many economists report that the housing market recovery depends on the job and income recovery!

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Filed under Let's Learn Something

Highlights from the Book: Fixing the Housing Market: Financial Innovations for the Future

The book is written by: Franklin Allen, Professor of Finance and Economics at The Wharton School, James R. Barth, Scholar in Finance at Auburn University and Senior Finance Fellow at the Milken Institute and Glenn Yago, Senior Fellow/Senior Director at the Milken Institute and founder of its Financial Innovations Labs

Some interesting points:

– As of 2005, there were 48.4 million mortgaged homes in the United States.

– Approximately 40 percent are now “underwater.”

– The price of homes has fallen more than 40 percent since a 2006 peak.

– More than 14 percent of households face foreclosure or default.

– These factors may result in “the continued threat of … a further downward spiral for neighborhoods and local and state governments that must depend on property taxes to support critical services.”

– The authors believe that the excessive amount of government control of the residential finance system is working against the housing recovery and that the United States must get its private investors re-involved in financing housing.

Taxes and Subsidies

The authors note that the United States may have to change some of the spending programs and tax expenditures of housing finance.

The Danish Model

The authors are fans of the Danish model.

In Denmark, when a lender issues a mortgage, it must sell an equivalent bond with a matching cash flow and maturity. The bonds and the mortgages it mirrors stay on the banks balance sheets. When interest rates rise and housing prices fall, a homeowner can hedge the household finances by buying the corresponding bond.

The authors believe this system helped Denmark avoid the problems in housing that the United States experienced. (It is noted that Denmark was “subjected to greater fluctuations in housing prices.”)

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Fixing the Housing Market: Financial Innovations for the Future

* Milken Institute is a non profit think tank and publisher of the book in collaboration with FT Press.

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