Single Family Housing Starts Jump 4.2%

The U.S. Census Bureau and the Department of Housing and Urban Development’s New Residential Construction report is a monthly estimate of how many new homes started construction during the month. The report also covers the number of permits to build new homes that were authorized. In October, both single-family authorizations and housing starts rose. The number of new homes that began construction jumped 4.2 percent and reached the highest rate since last November. Overall building permits also hit a high for the year, climbing nearly 5 percent from September’s estimate. Despite the improvements, however, analysts say November’s results are likely to be weaker than October’s due to the onset of colder weather across the country and the fact that month-to-month construction data tends to be volatile. In fact, though new residential construction is up nearly 8 percent over last year, monthly estimates have been largely up-and-down all year, plummeting one month and rising the next. More here.

Mortgage Demand Climbs As Rates Drop

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes increased 12 percent last week. The spike brought the seasonally adjusted Purchase Index to its highest level since July. Refinance activity also rose, climbing 1 percent over the previous week. Still, as a share of total mortgage application volume, refinance activity fell to 61 percent from 63 percent the week before. The overall improvement – which saw total demand for mortgage applications up 4.9 percent – may be due, in part, to an adjustment for the Veterans Day holiday, which could have skewed numbers higher. Still, mortgage rates fell on 30-year fixed-rate loans with both conforming and jumbo balances, as well as mortgages backed by the Federal Housing Administration. Rates on 15-year fixed-rate loans were unchanged from the week before. Low mortgage rates, combined with continued economic improvement, are expected to release pent-up housing demand and help boost home sales in the coming year. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgages. More here.

Builder Optimism Grows In November

The National Association of Home Builders Housing Market Index gauges builder confidence in the market for newly built single-family homes on a scale where any number above 50 indicates more builders view conditions as good than poor. In November, the index gained four points, reaching a level of 58. David Crowe, NAHB’s chief economist, said low mortgage rates, affordable home prices, and solid job creation are contributing to a steady housing recovery. According to Crowe, the year started slow but the index has been above 50 for five consecutive months and he expects that momentum to carry over into 2015. Also, all three components of the index – including current sales conditions, current buyer traffic, and future sales – registered improvement from the month before, with current sales conditions up 5 points from October. Regionally, the South, West, and Northeast all saw gains, while the Midwest slipped 2 points. More here.

Majority of American Homes Are Affordable

According to a new report, 61.8 percent of new and existing homes that sold between the beginning of July and the end of September were affordable to a family earning the U.S. median income of $63,900. Though down from the second quarter, the percentage of homes that are affordable to median-income earners is still high by historical standards. David Crowe, NAHB’s chief economist, says even with nationwide home prices reaching their highest level since 2007, affordability remains high. Crowe believes rising employment and income, mortgage rates hovering near record lows, and pent-up demand should give the housing market momentum going into 2015. Also in the report, the national median home price rose in the third quarter, climbing from $214,000 to $221,000. But though home prices are up, average mortgage rates fell during the same period. NAHB chairman, Kevin Kelly, says low mortgage rates and still affordable home prices make this a good time to buy a house. More here.

Underwater Homeowners Fall To Record Low

The number of homeowners who are underwater on their mortgage – where the combined loan amount secured by the property is at least 25 percent higher than the property’s estimated market value – has fallen to its lowest level since RealtyTrac began reporting negative equity during the first quarter of 2012. The numbers, released as part of RealtyTrac’s U.S. Home Equity & Underwater Report for the third quarter of 2014, found that just 15 percent of all properties with a mortgage were seriously underwater. That’s an improvement from 23 percent at this time last year and 29 percent at its peak during the second quarter of 2012. Daren Blomquist, vice president at RealtyTrac, said the decrease in underwater properties is promising but the flood waters are not receding as quickly as they were before, due to slower home price appreciation. In other words, the faster home prices rise, the quicker underwater homeowners return to positive equity. Still, the improvement has nearly cut the number of seriously underwater borrowers in half since its 2012 peak and is a good sign for the housing market’s future health. More here.

Housing Market 90% Back To Normal

Residential real estate has been slowly recovering ever since the financial crisis and housing crash. But, according to a new report from the National Association of Home Builders, the housing market is now 90 percent back to its normal level of activity based on current building permit, home price, and employment data. In fact, gains were seen in housing markets both big and small, including major metros such as Los Angeles and Houston as well as smaller cities in Wyoming and North Dakota. Kevin Kelly, NAHB’s chairman, said markets are recovering at a slow but gradual pace, which should pick up with continued gains in job creation, economic growth, and consumer confidence. As of the most recent reading, 59 of the nearly 350 metro areas covered by the NAHB’s Leading Markets Index returned to or exceeded their last normal levels of economic and housing activity during the third quarter of 2014 and 66 percent showed improvement over the previous year. That continued improvement, though gradual, is a good sign that housing will sustain its gains into 2015. More here.

Demand For Home Purchase Loans Edges Up

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes was up slightly last week over the week before. The 1 percent increase marked the second consecutive week purchase demand improved. Despite the improvement, however, total mortgage loan application volume was relatively flat from a week earlier due primarily to a 2 percent drop in refinance activity. Refinance activity has slowed since mortgage rates began to rise again following consecutive weeks of declines. Last week, rates ticked up again, with the average contract interest rate on 30-year fixed-rate mortgages with conforming loan balances up slightly. Rates also rose on loans backed by the Federal Housing Administration. Mortgage rates on jumbo loans and 15-year fixed-rate mortgages were flat from the previous week. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgages. More here.

How Today’s Buyers Find The Right House

The National Association of Realtors 2014 Profile of Home Buyers and Sellers is an annual survey that looks at the way the typical home buyer experiences the process of buying a home. For example, this year’s survey found 43 percent of home buyers began the home-buying process by searching online for properties, while 12 percent started looking for information about the process itself. The vast majority of buyers used the Internet in some way or another, however, with 92 percent of buyers reporting they used the web in some fashion. A rising number are also using apps to help them find their house. In fact, 50 percent of buyers said they used a mobile or website application during their home search. But though the home search is increasingly aided by the Internet, real-estate agents still prove to be invaluable to buyers. Among buyers who used an agent, 98 percent said they were a useful source of information during the process. Overall, the typical buyer’s search lasted 10 weeks and they viewed 10 homes. More here.

Americans Feel Good About Finances, Housing

Americans are feeling better about their personal financial situation and that optimism is expected to help boost the housing market in the coming year. According to Fannie Mae’s October National Housing Survey – which polls Americans to assess their attitudes toward buying a home, the economy, household finances, and more – found that the share of respondents who say they expect their financial situation to worsen in the next year fell to just 10 percent and the number that expect it to improve rose to 45 percent, nearing an all-time survey high. Doug Duncan, Fannie Mae’s chief economist, said consumers are growing more optimistic about their personal finances and the results may help drive a healthier housing market in 2015. According to Duncan, the fact that the gap between the number of Americans who say it is a good time to sell a home and those that say it’s a good time to buy a home has been narrowing indicates the housing market should be more evenly balanced over the next 12 months. Participants also expect home prices, mortgage rates, and rent to rise in the next year. More here.

Buyer’s Market: What Baby Boomers Want

The baby boomer generation – Americans born between 1946 and 1964 – are either already retired or quickly nearing retirement age. They haven’t, however, retired their needs and preferences when it comes to remodeling their existing home or buying a new one. Among the most popular home trends among boomers, home offices and media centers are near the top, according to a new report from the National Association of Home Builders. Tech savvy and still active in the workforce even after retirement, boomers want a wireless network, remote control lighting, and enhanced security features. They also desire flex spaces that can be easily adapted to meet their needs. Easy to maintain landscaping, better lighting, and bigger windows also make the list. Another housing trend that boomers have popularized are first-floor master suites with bigger bathrooms, walk-in closets, separate tub and shower, and dual sinks. In fact, more than 40 percent of new homes now have downstairs master suites, a 15 percent increase from just 10 years ago. More here.