Pending home sales at 22-month high
The number of pending sales for existing homes is now at the highest level for 22 months. The National Association of Realtors’ pending home sales index was up 1.1 per cent in March and is 11.4 per cent higher than the same period last year. The index has increased year-over-year for 7 consecutive months and is at the highest level since June 2013. NAR chief economist Lawrence Yun commented: "Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year.”
Mr Yun said that the figures also show that homes are being bought more by long-term buyers rather than investors. Pending sales were lower in the Northeast (by 1.5 per cent) and the Midwest (by 2.5 per cent) and increased in the South (by 4 per cent) and West (by 1.7 per cent). The issues for the market going forward are the lack of supply and rising prices which could mean that the full potential may not be reached. However it is expected that there will be steady sales growth in the coming months. In a Twitter chat yesterday he said that he’s upgraded the forecast for sales to the end of the year to 5.28 million, the best for 9 years, and the median price forecast was a 6 per cent increase.
Mortgage applications dropped last week
Mortgage applications fell by 2.3 per cent last week compared to the previous week according to new figures from the Mortgage Bankers’ Association. The data also shows that refinancing mortgage applications fell by 4 per cent and slipped to 55 per cent of all applications. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.85 per cent from 3.83 per cent.
Title insurers curbed by NY State
New rules have been imposed on New York state title insurers which should save homebuyers money. The superintendent of financial services is capping some fees and will require insurers to submit their rates to the regulator at least every three years. Officials believe it could save homebuyers as much as 20 per cent on title insurance closing costs.
Treasury should do more to help troubled homeowners
The US Treasury has done far too little to help troubled homeowners in certain states. That’s according to a federal inspector who says that the Home Affordable Modification Program has not been performing well in Alaska, Arkansas, Indiana, Iowa, Kansas, Michigan, North Dakota, Oklahoma, Tennessee and Texas. The program is meant to make mortgages more affordable through modifications but in those states there have been more foreclosures for each modification than elsewhere.
The report said that the Treasury should seek out more struggling homeowners in these states to apply for help. Outreach programs are held to let people know how they can be helped but in 6 of the 10 underperforming states none have been held. It also said that while HAMP has helped 4 million homeowners across the US only 1.5 million had a permanent modification and many have defaulted again.