Posts Tagged ‘NAHB’

Home Affordability Rankings For 225 Metropolitan Statistical Areas

Friday, August 27th, 2010

Home Affordability - Top and Bottom 5 markets 2010 Q2

With home prices holding firm and mortgage rates still dropping, home affordability is reaching new heights.

According to the quarterly Home Opportunity Index as published by the National Association of Home Builders, more than 72 percent of all new and existing homes sold between April-June 2010 were affordable to families earning the national median income.

It’s a slightly higher reading as compared to last quarter, and the second highest reading in the survey’s history.

As with all aspects of real estate, however, home affordability varies by locale.

For example, 97.2% of homes sold in Syracuse were affordable for families making the area’s median income, earning the New York city its first “Most Affordable Major City” designation.  Indianapolis was the first quarter winner.

On the opposite end of the spectrum, the “Least Affordable Major City” title went to the New York-White Plains, NY-Wayne, NJ area for the 9th consecutive quarter.  Just 19.9% of homes are affordable to families earning the local median income, down 1 percent from last quarter.

The rankings for all 225 metro areas are viewable on the NAHB website but regardless of where you live, buying a home is as affordable as it’s ever been in history. Furthermore, because home values are in recovery and mortgage rates may rise, the market is ripe for home buyers.

All things equal, buying a home may never be this inexpensive again. If you were planning to purchase later this year, you may want to move up your time frame.

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Home Builder Confidence Falls Again; Home Buyers Gain Leverage?

Tuesday, August 17th, 2010

NAHB Housing Market Index August 2008-2010Home builder confidence in the newly-built, single-family housing market is down for the third straight month this month.

After reaching a 3-year high just 90 days ago, the National Association of Homebuilders’ Housing Market Index is now at a multi-year low. It’s since dropped by almost half.

As an economic indicator, the HMI’s goal is to “take the pulse of the single-family housing market”. It surveys home builders across the country and asks them to report on 3 facets of their business:

  1. How are market conditions today?
  2. How do market conditions look 6 months from now?
  3. How is the prospective traffic of new buyers for new homes?

Responses are then collated, weighted, and presented as the Housing Market Index.

The August HMI reading of 13 is the lowest since March 2009.

Not surprisingly, the main reasons why HMI is down echo the main reasons why consumer confidence is down. Jobs growth continues to be weak; credit guidelines remain restrictive; and, home values are recovering slowly, pressured by distressed properties.

Builders report watching foot traffic stagnate and most likely won’t want to be stuck with excess inventory into the fall and winter months.  For home buyers in San Antonio , drops in builder confidence like this can be an excellent negotiation tool.

Builders may be more likely to offer incentives and/or price reductions into an uncertain economy, as compared to a strong one. Furthermore, weakness in home building indirectly drags mortgage rates lower.

This one-two combination can make for cheaper homes with cheaper monthly payments.

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Sagging Homebuilder Confidence Opens The Door For Good Deals

Tuesday, July 20th, 2010

NAHB Housing Market Index July 2008-2010Builder confidence in the housing market slipped this month, according to the National Association of Homebuilders’ monthly Housing Market Index.

The Housing Market Index is actually a weighted composite of 3 separate surveys. One measures current single-family sales; one measures projected single-family sales; and one measures traffic of prospective buyers.

All three surveys were down in July:

  • Single-Family Sales : From 17 (June) to 15 (July)
  • Single-Family Project : From 22 (June) to 21 (July)
  • Buyer Foot Traffic : From 13 (June) to 10 (July)

The HMI’s July reading of 14 puts confidence at its lowest point since April 2009.

For home buyers in Houston , a drop in builder confidence could create an opportunity for negotiation.

Remember, it wasn’t too long ago that most builders were flush with home inventory, unable to find willing buyers. To help move product at that time, builders dropped prices and offered incentives including free upgrades. If confidence continues to sag going forward, home purchase deals of that nature may return — especially as the foreclosure market gets larger.

See, in the past, builders’ main competition for buyers were the existing home sellers.  Today, builders compete with the existing home sellers and the banks with REO.

It’s a terrific time to be a home buyer, in other words — sellers are fighting for you. It’s no wonder sellers have little leverage anymore. Couple that with all-time low mortgage rates and affordability for homes is at an all-time high.

If you’re planning to buy a home later this year, you may want to consider moving up your time frame. The market looks ripe for good deals this summer.

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The Deal For Mortgage Rates This Week – July 19, 2010

Monday, July 19th, 2010

Housing starts June 2008 - May 2010Mortgage markets improved for the 5th straight week last week as consumer confidence waned and inflation data tamed. Investors ignored the news that 19 of 23 reporting S&P 500 companies beat their respective earnings estimates and sold off on stocks.

There’s concern about a potential economic slowdown for the months ahead and it may be well-founded.

Despite an improving jobs situation and booming retail sales, households are less optimistic about the future and so is the Federal Reserve. In its post-meeting minutes released last week, the Fed revised its U.S. growth estimates downward for 2010 and 2011.

For rate shoppers in Texas , this is excellent news.

Because of the weakness, conforming mortgage rates fell again last week, extending the current rally in rates to 16 weeks. Mortgage rates are lower than at any time in measured history.

This week, data will be housing market-heavy and mortgage rates could rise or fall.

  • Monday : National Association of Home Builders Index
  • Tuesday : Building Permits and Housing Starts
  • Thursday : Existing Home Sales

Strength in any, or all three, of these housing-related reports should push mortgage rates higher on higher hopes for the economy. Weakness, on the other hand, should have the opposite effect.

Overall, though, mortgage markets are trending better.  Momentum is in effect and refinance activity is soaring. That said, it doesn’t mean that rates won’t rise — they could absolutely. It just takes a change in market sentiment. And that could happen quickly.

Mortgage rates are artificially right now so even the slightest jolt could cause them to spike. It would be similar to what happened in June 2009 when rates rose 1.125% in just 10 days’ time. Therefore, if you’re shopping for a mortgage and like the rate you’ve been quoted, consider locking in as soon as possible.

There’s very little room for rates to fall further but a lot of room for rates to rise. Make sure you’re on the right side of that bet.

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The Supply Of New Homes For Sale Just Dropped Off A Cliff

Friday, May 28th, 2010

New Home Supply April 2009 - April 2010The supply of newly-built homes for sales plummeted in April, a positive indicator for the San Antonio housing market as we head into the summer months.

It’s no wonder that homebuilders are breaking new ground at the fastest clip in 2 years.

At the current sales pace, the nation’s complete supply of new homes would be sold in just 5 month’s time.  That’s more than double the pace of a year ago.

Also, as more good news, in terms of total housing units, the government reports that New Home Sales topped one half-million homes sold for the first time since May 2008.

It’s a similar spike as within the Existing Home Sales data released earlier this week.

But before we declare the housing market “repaired in full”, we have to consider a few of the reasons why home sales are charting so strongly.

The first reason is the federal homebuyer tax credit’s April 30 expiration. In order to claim up to $8,000 in tax credits, home buyers must have been in mutual contract for a property before May 1. There is no doubt this contributed to a run-up in sales, especially among first-time home buyers.

The second reason is that mortgage rates have remained exceptionally low, defying expert predictions.  Low rates don’t sell homes, but they do make monthly payments easier to manage for households torn between renting or buying.

And, lastly, March and April’s new home sales may have been buoyed by aggressive discounting on behalf of homebuilders.  As compared to February 2010, April’s average new home sale price was lower by 13 percent.  That’s a sharp drop in a short period of time.

For now, though, homes are selling, supplies are dropping, and buyer interest is high. It’s no wonder builder confidence is soaring.

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Home Opportunity Index Ranks 225 Metro Areas For Affordability

Friday, May 21st, 2010

Home Affordability - Top and Bottom 5 markets 2010 Q1

With home prices still relatively low and mortgage rates trolling near their all-time best levels, it’s no surprise that home affordability is extraordinarily high in Austin and most U.S. markets.

According to the quarterly Home Opportunity Index as published by the National Association of Home Builders, more than 72 percent of all new and existing homes sold between January-March 2010 were affordable to families earning the national median income.

It’s the second highest reading in the survey’s history.

Of course, on a city-by-city basis, home affordability varies.

In the first quarter of 2010, for example, 98.7% of homes sold in Bay City, Michigan were affordable for families earning the area’s median income and in Indianapolis, the percentage was almost 95 percent.

Indianapolis has held the top quarterly ranking for close to 5 years now.

On the opposite end of the spectrum, the New York-White Plains, NY-Wayne, NJ region earned the “least affordable” metropolitan area for the 8th consecutive quarter.  Just 20.9% of homes are affordable to families earning the local median income.

The rankings for all 225 metro areas are available on the NAHB website but regardless of where your town ranks, home affordability remains high as compared to historical values but it likely won’t last long.  Home values are recovering in many markets and mortgage rates won’t stay this low forever.

All things equal, buying a home may never come this cheap again. If you were planning to buy later this year, consider moving up your timeframe.

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