From Fidelity National Title:
The Week in Review
MONDAY, March 19th
The NAHB housing market index was unchanged at a level of 28 in March. This follows five straight gains in a row in the prior five months. In March, homebuilders downgraded current sales slightly while upgrading sales projections six months from now indicating a more positive outlook for residential construction. While improved over the last several months, a reading below 50 indicates weak homebuilder sentiment which is usually reflected in slow construction activity. Rising from extremely depressed levels and nearly doubling since June, at least builder sentiment is headed in the right direction.
TUESDAY, March 20th
Housing starts declined 1.1%in February to an annual pace of 698k, roughly in line with expectations for a rate of 700k. This follows an upwardly revised gain of 3.7% and an annual rate of 706k in January. Housing starts are now 34.7% above their year ago level in February 2011. Housing starts have been trending modestly higher since hitting their cyclical low in April 2009. Gains last month were limited to the multifamily sector. Single-family housing starts declined last month. Housing permit issuance, often used as a proxy for future construction activity, jumped 5.1% last month to a 717k annual rate suggesting that new construction may rise in the near term. While beginning to improve, a strong sustained recovery in the housing market, especially the single family sector, still appears to be down the road.
WEDNESDAY, March 21st
The MBA mortgage applications index fell 7.4% to 681.9% for the week ending March 16. The decline was largely a result of a 9.3% drop in refinance applications last week though purchase applications also slipped 1.0%. An uptick in rates probably cut into refinancing opportunities; contract mortgage rate gained with the 30-year fixed up 13 bps to 4.19%.
Existing home sales fell 0.9% in February to an annual rate of 4.57 million, roughly matching market expectations. Existing home sales are now 8.8% above their year ago level. Contract failures were reported by 31% of NAR members last month indicating sales could have been much higher. Home prices held steady in February from a year ago with the median price for an existing home up 0.3% to $156,600 as average prices increased 0.4% to $203,100. Even with the decline last month, existing home sales are trending modestly higher. Record high affordability is lifting demand, though pricing remains tentative. Contract failures, mainly related to appraisals coming in below the negotiated price continue to weigh on overall sales. Economists expect home resales to continue rising slowly from a very deep bottom in the months ahead with a price and sales recovery starting later in the year.
THURSDAY, March 22nd
Jobless claims fell 5k to 348k for the week ending March 17. This was the lowest level of initial claims since March 2008. Claims have been trending lower since September, a clear indication that the pace of layoffs has slowed. Labor market conditions are slowly improving and hiring has picked up recently. Another monthly job gain in excess of 200k is likely for March.
FRIDAY, March 23rd
New home sales fell 1.6% in February to an annual rate of 313k following a downwardly revised annual rate of 318k in January. New home sales are counted when the sales contract is signed so these data reflect current sales activity. Despite back-to-back declines, new home sales are 11.4% above their year ago level. But at just over a 300k annual rate new home sales remain exceptionally weak. Home prices rose from February one year ago with the median price for a new home up 6.2% to $233,700 while average prices increased 1.9%% to $267,700. New home prices are hovering around levels last seen in 2004. New home sales, like other housing market indicators, are fairly stable at a weak level. We have seen signs of life in homebuilder sentiment and new construction recently along with stronger job creation and economic growth which provides some hope for new home sales to gain traction and move up slightly this year from historically low levels.
Some more decent/ good news. It does seem like we are stabalizing right now and pushing forward at a slow, but steady pace. Again, I don't know if we are out of the woods, but I would like to see a stabalization followed by slow steady growth. It is looking better and hopefully things will continue to shore up. Jobless claims have been on a nice steady downtrend for the last few months and I would really like to see that continue - I really believe that as people find employment, all of the other economic numbers will take care of themselves.
Also, keep in mind that if you are looking to sell your home in the Denver Metro area, new listings coming onto the market were down about 50% in the 5 major counties and with interest rates hovering near /at all time lows, this is a good time to test the market. Any interest in knowing the value of your home, shoot me and e-mail, or give me a call at 303.520.8700.