NAR’s Pending Home Sales Index Rises in June

Ø Some improvement is projected for existing-home sales in the months ahead, according to the latest forecast by the National Association of Realtors^®. The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 5.3 percent to 89.0.

Ø “The rise in pending home sales was broad-based with all four regions showing gains. This is welcome news because a rise in contract activity is necessary for an overall housing recovery.”

  
-- Lawrence Yun, NAR chief economist “Pending Home Sales Rise, Wider Gains Anticipated as Buyers tap Housing Provisions,” National Association of Realtors^®, August 7, 2008. (Data/Report – PDF)

Study: Most Americans Not Likely to Experience Significant Decline in Home Values

Ø Only four states -- Arizona, California, Florida and Nevada -- have had declines of more than 4 percent in home prices over the past year, according to the house price index of the Office of Federal Housing Enterprise Oversight.

Ø Our analysis reveals, unsurprisingly, that foreclosures and home prices have negative effects on each other over time, but this does not imply a vicious cycle of collapsing prices. Our models predict that as foreclosures continue to climb in many states, house prices will remain flat or decline in those states -- but will not collapse.

-- “Housing Collapse Ahead? Not According to the Data,” by Charles W. Calomiris, Stanley D. Longhofer and William Miles, Washington Post, August 4, 2008.

Housing Rescue Bill Signed in to Law

The housing act … aims to provide relief to homeowners, incentives to buyers, guidance to lenders and oversight to vital government-sponsored entities, such as Fannie Mae and Freddie Mac. Some of the bill’s provisions include:

Ø Foreclosure avoidance: Will help an estimated 400,000 homeowners avoid foreclosure by refinancing into 30-year fixed-rate loans backed by the Federal Housing Administration.

Ø Aid for buyers: First-time home buyers who purchase a primary residence between April 9, 2008, and July 1, 2009, will be eligible for a tax credit of $7,500 or 10% of the purchase price, whichever is less. Home buyers who claim the credit will be required to pay it back in equal installments over 15 years, starting in the second year after the home is purchased.

Ø Loan limit: Federal Housing Administration's loan limit is raised in high-cost areas from 95% to 115% of area median home price, up to $625,500.

Ø Neighborhood help: Provides $4 billion in grants for buying and renovating foreclosed properties in hardest-hit areas.

-- “Housing Rescue Bill May Fall Short; Who Benefits?,” by Anna Bahney, USA Today, July 28, 2008.

Mortgage Applications Up 2.8% over Previous Week

The volume of mortgage applications filed last week rose slightly, increasing a seasonally adjusted 2.8% compared with the week before, the Mortgage Bankers Association reported. Applications for mortgages to refinance existing home loans rose 4.4% on a week-to-week basis, while mortgage applications for the purchase of a home increased a seasonally adjusted 1.8%.  

-- “Mortgage Applications Rose Slightly Last Week,” by Amy Hoak, Marketwatch, August 6, 2008.

California May have Reached Housing Bottom

California was the first state to experience a decline in its housing market, and it may be the first to find the bottom. “The fundamentals are good: supply constrained markets with lots of population growth, a solid and diversified economy and important global links” in Los Angeles and San Francisco.

-- Mark Zandi, chief economist at Moody's Economy.com, “California's Discount Foreclosure Sales Point to Housing Bottom,” by Dan Levy and Daniel Taub, Bloomberg, July 31, 2008.

Regional Update: Good News from Markets around the Nation

Las Vegas

There's a glimmer of hope in the neon city of Nevada, where home sales are starting to heat up after two dismal years. In fact, sales in Las Vegas have risen over the past six months. Bank-owned foreclosed properties are setting the pace. With prices falling, the homes are grabbing attention. “We're getting a lot more people from Canada and other foreign countries who are able to pick up property that they can afford.”

 -- Patty Kelley, president of the Greater Las Vegas Association of Realtors, “Home Sales Begin to Rebound in Las Vegas,” by Christine Dugas, USA Today, August 5, 2008.

Northern Virginia/Washington D.C.

Coldwell Banker Residential Brokerage in Greater Washington is reporting that 50 percent of the properties it sold in June were sold within the first 30 days on the market. “During the second quarter of 2008, we’ve seen a sizable shift in the marketplace. In the Virginia suburbs in particular, when a nice home comes on the market, priced well and in good condition, it is going fast and many are getting multiple offers.”

 -- Paul Valentino, president of a Washington-area brokerage, “Renewed Competition for Well-Priced Homes,” Fairfax County Times, July 30, 2008.

Southwest Florida

“We’ve finally gotten to the point where we’ve reached a bottom (in southwest Florida) as far as housing starts, existing home sales and new home sales. We’re kind of bouncing along the bottom. We’ve finally gotten to the point where the price is not dropping, it’s stabilizing, so that’s a good thing.”

 -- Michael Timmerman, a senior associate with Fishkind & Associates, “Better Days Ahead for Housing Market, Financial Analysts Say,” Naples Daily News, July 28, 2008.