Builders Raising Prices, Limiting Supply

Builders Raising Prices, Limiting Supply
Those looking to buy new homes will likely start to see price hikes, and possibly a smaller selection. Many of the nation’s builders say they’ve had to increase prices due to the rising costs of land, labor, and materials. 
For example, Pulte’s sale price, on average, has increased 10 percent to $287,000 in the first quarter of this year. Meanwhile, the average existing home price was $233,200 in March, according to the National Association of REALTORS®. 
“Builders are feeling pinched by rising costs of key building components which is causing home construction costs to rise at a faster pace than appraised values,” says David Crowe, chief economist of the National Association Home Builders. Read more ....

Home Prices to Increase

Home Prices to Increase
Moody's: Loss Severities to Remain High: Home prices will increase over the next three years as the economy expands and servicers work through their distressed inventories, according to a report from Moody’s Analytics. However, the firm predicts rising prices will not be enough to offset anticipated rising loss severities.

Home prices will rise about 4.2 percent between the fourth quarter of last year and the fourth quarter of 2015, according to Moody’s. “Not only will several years of solid job and household growth help home values by the end of this period, housing markets throughout the nation will have worked off most of the remaining distressed inventory,” Moody’s said in its report.
Recent price gains have resulted from high affordability, soaring investor interest, and low inventories with declining foreclosure inventories playing a major role. Read more ...

Best Time to Sell?

Best Time to Sell?
More Americans Say 'Yes' Seller confidence is surging: The number of home sellers who say now is a good time to sell doubled in the second quarter, according to a new survey of nearly 2,000 owners conducted by real estate brokerage Redfin. In the first quarter of 2013, 22 percent surveyed said it was a good time to sell compared to 45 percent in the second quarter.
 

'More folks who bought before the bubble burst are now above water and listing their homes,' says Chad Dierickx, a real estate practitioner with Redfin. 'When sellers see their neighbors' homes selling quickly and for prices they never would have imagined a couple of years ago, they can't help but be optimistic about the market.'

Nearly 32 percent of home owners surveyed said they have no concerns about selling right now. Eighty-five percent of sellers say they believe home prices will rise in their area for the next year — up from 81 percent in the first quarter, according to the survey. 
This marked the fourth-consecutive week mortgage rates inched lower. 
'The housing market is getting a boost with mortgage rates hovering at or near record lows,” says Frank Nothaft, Freddie Mac’s chief economist. Freddie Mac reports the following national averages for mortgage rates for the week ending April 25: See Mortgage Rates ... 

Home Prices to Rise 10% This Year

Home Prices to Rise 10% This Year
Barclays: Home prices will likely climb 10 percent in 2013 and 8 percent in 2014, according to Barclays analyst Stephen Kim, who recently upgraded his view of the housing market from neutral to positive. 
Kim told The Wall Street Journal recently that low mortgage rates are helping to make buying more affordable than renting in many markets. 
About “18 months ago, the industry was nothing much to look at: dilapidated foreclosures were flooding the market, home equity had suffered the worst retrenchment in a generation, and housing starts and sentiment were far below historic troughs levels,” Kim notes.
“But after stabilizing in 2012, both new and existing home prices are now accelerating much more rapidly than in the 1990s cycle.”  Read more ..

Data Shows Mortgage Credit Easing,

Data Shows Mortgage Credit Easing,

Others Not so Sure: Lenders are showing signs of easing up on underwriting for mortgages, according to the latest report from Ellie Mae Inc., a mortgage origination software company. But some critics say they aren’t seeing it in their markets yet, as their customers continue to struggle to qualify for a mortgage, posing one of the biggest obstacles to the housing recovery. 

Ellie Mae’s latest findings may provide some encouraging signs for those buyers who have been shut out: Credit scores and down payments for approved mortgages are moving lower.

FICO scores for approved mortgages averaged 743, dropping to the lowest point since Ellie Mae began its tracking in August 2011. For the first quarter, the average credit score overall among approved borrowers was 746, which compares to 748 for all of 2012, according to Ellie’s report, which reflects March data of approved mortgages. 

Borrowers approved for a loan made, on average, a 19 percent down payment, the lowest since May 2012, according to Ellie Mae. The front-end debt-to-income ratios were 23 percent.  See Rates: 

Prices Up, Existing-Home Sales Down in March

Prices Up, Existing-Home Sales Down in March

NAR: With a sharp jump in prices, existing-home sales fell 0.6 percent in March—the steepest drop since December—to 4.92 million units, the National Association of Realtors(NAR) reported Monday. Economists had expected a 1.0 percent increase to 5.03 million from February’s original report of 4.98 million sales.

February sales were revised downward to 4.95 million.
The median price of an existing single-family home jumped $11,100—the strongest monthly gain in almost eight years—to $184,300, the highest level in seven months. 
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Recent Price Gains May Not Be Here to Stay

Recent Price Gains May Not Be Here to Stay Fitch: While some might be rejoicing at the recent rising home prices and rising home sales seen across the nation, Fitch Ratings “still views these gains cautiously.” In fact, the agency predicts price gains will slow and perhaps even reverse over the next year.

Fitch expects a price “trough in the middle of 2014” but suggests inflation will keep prices from falling more than 3.5 percent.
“While rising prices and sales volumes suggest a recovery, they are not moving in sync with key economic indicators that would otherwise support a sustainable price level,” Fitch stated in its most recent quarterly report.Fitch chalks it up to pent-up demand. Persistent low interest rates, For Third Week, Mortgage Rates Sink Lower: Read more .....