Has the housing market finally bottomed out? Signs are promising, though tentative. Mortgage rates remain low — in fact, they might go lower; pending-home sales are up from last year; and new housing stock demand is at a two-year high. But foreclosure filings are up in major cities and existing-home sales decreased in June.
Seeking Alpha:Evidence Mounts: U.S. Real Estate Market Has Passed Bottom, Entered Recovery
The evidence mounts that we’ve passed the bottom of the U.S. housing market, as we see sales gains and gradual but ongoing increases in home prices, according to various sources like the FHFA, Zillow, CoreLogic, and the NATIONAL ASSOCIATION OF REALTORS® (median existing-home price in June was the highest since 2008). Moreover, home builder confidence reached a five-year high this month.
A lack of properties for sale led to a decline in the number of homes under contract to sell in June. Despite the decline, pending-home sales have risen on a year-over-year basis for 14 straight months, according to the NATIONAL ASSOCIATION OF REALTORS®. The Pending Home Sales Index, which measures the number of homes that have been sold but not closed, slipped 1.4% in June but is 9.5% higher than June 2011.
Demand for new U.S. homes probably climbed in June to the highest level in two years, economists project, another sign the housing market is recovering. Purchases increased to a 371,000 annual rate, the most since April 2010 and up 0.4% from the prior month, according to the median forecast of 74 economists surveyed by Bloomberg News.
Bloomberg: Foreclosure Filings Increase In 60% of Large U.S. Cities
Foreclosure filings rose in almost 60% of large U.S. cities in the first half of 2012, indicating many areas will have more distressed homes on the market later this year, RealtyTrac Inc. reported. The gain in foreclosure actions followed a probe into abusive lender practices that delayed bank seizures nationwide. More repossessions will buoy deals “in many local markets where a shortage of aggressively priced inventory has been holding up sales,” said RealtyTrac’s CEO in a statement.
CNBC: Is the 30-Year-Fixed Headed to 3%?
Despite a spring surge in home buying this year, especially in new construction, these lower rates should make the surge bigger and continue it throughout the summer, but that does not appear to be the case. The NATIONAL ASSOCIATION OF REALTORS® reported a surprise drop in home sales in June, due to low inventory on the low end of the market, which is not as dependent on mortgage rates.
Mortgage rates are a full percentage point below where they were one year ago, and that recently sparked yet another spike in mortgage refinance applications, according to the Mortgage Bankers Association. It did not, however, do the same for applications to purchase a home.