Realtors: We Overcounted Home Sales for Five Years - US Business News

Data on sales of previously owned U.S. homes from 2007 through October this year will be revised down next week because of double counting, indicating a much weaker housing market than previously thought.

CNBC.com

The National Association of Realtors said a benchmarking exercise had revealed that some properties were listed more than once, and in some instances, new home sales were also captured.

"All the sales and inventory data that have been reported since January 2007 are being downwardly revised. Sales were weaker than people thought," NAR spokesman Walter Malony told Reuters.

"We're capturing some new home data that should have been filtered out and we also discovered that some properties were being listed in more than one list."

via cnbc.com

This is not good and makes no sense that they didn't think of this sooner. Calls into question their other numbers now. The NAR just got a big black eye.

Home sales fall to 2011 low; few 1st-time buyers

WASHINGTON (AP) -- Fewer people bought previously occupied homes in May, lowering sales to their weakest point of the year.

Home sales sank 3.8 percent last month to a seasonally adjusted annual rate of 4.81 million homes, the National Association of Realtors said Tuesday. That's far below the roughly 6 million annual sales rate typical in healthy housing markets.

Since the housing boom went bust in 2006, sales have fallen in four of the past five years. Analysts say they expect sales to level off at about 5 million a year. That's not much better than the 4.91 million homes sold last year, the worst showing in 13 years.

The depressed housing market has weighed on the broader economy. Declining home prices have kept people from selling their houses and moving to find jobs in growing areas. They have also made people feel less wealthy. That has reduced consumer spending, which drives about 70 percent of economic activity.

One sign of the housing industry's struggles is that fewer first-time buyers are entering the market. The number of first-timers ticked down to 35 percent of sales last month. In healthy times, they drive about half of sales.

First-time buyers are critical because they tend to improve their properties and invest in their communities, a combination that raises home values. And their purchases allow sellers to move up to pricier homes.

Instead, the market has been saturated with foreclosures, which force prices down. Sales of homes at risk of foreclosure fell in May. But they still made up 31 percent of all purchases. And many pending foreclosures are backlogged in the courts or held up by state and federal probes into questionable foreclosure practices by lenders.

Until the glut of foreclosures are cleared and people think it's a safe time to buy, "it is unlikely that home prices can recover on a sustained basis," said Steven Wood, chief economist at Insight Economics.

Bigger required down payments, tougher lending rules, heavy credit-card and student-loan debt and a shortage of desirable starter homes are keeping many would-be buyers away. Even some who do have enough money for a down payment and a solid credit history are holding off, worried that home prices will keep falling.

Investors are filling some of the void. They are spending cash to scoop up deeply discounted homes in hard-hit areas of Phoenix, Las Vegas and Tampa. Last month, investors accounted for 19 percent of all sales.

All the while, previously occupied homes are cheap and in great supply.

Re-sold homes are a bargain compared with new homes. The median sales price for a previously occupied home in May was $166,500. The median price of a new home is nearly 31 percent higher than the price for a re-sale -- around twice the normal markup.

The gap is largely due to the flood of foreclosures and short sales. (Short sales occur when lenders accept less than what's owed on the mortgage.) A record 1 million homes were lost to foreclosures last year. And foreclosure tracker RealtyTrac Inc. expects 1.2 million more will be lost this year.

Another problem for the housing market is the glut of unsold homes. In May, the supply fell slightly to 3.72 million homes. At last month's sales pace, it would take more than nine months to clear those homes.

Homes priced for less than $100,000 are selling briskly, but more expensive homes are having trouble finding buyers. Analysts say a healthy supply can be cleared in six months.

The situation is worse when taking into account the "shadow inventory" of homes, economists say. These are homes that are in the early stages of the foreclosure process but, because of backlogged courts or the government probes, haven't hit the market for re-sale.

Sales fell across most regions in May. Sales dropped 6.4 percent in the Midwest, 5.1 percent in the South and 2.5 percent in the Northeast. There was no change in the West.

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JPMorgan expects home prices to dip « HousingWire

Friday, June 10th, 2011, 7:54 am

JPMorgan (JPM: 41.05 +0.17%) predicted a further dip in home prices this past month, forecasting another 4% to 5% drop in home values between now and mid-2012.

In its June 2011 Home Price Monitor Report, the bank lowered its base home price forecast to a level that's 37% under peak price levels.

The financial services firm blames its lowered price expectations on a supply-and-demand imbalance, as well as anemic consumer demand and disappointing economic reports.

The good news is CoreLogic's home price index grew a slight 0.7% in April, which shows some signs of possible price stability, JPMorgan said.

But home prices still declined more than anticipated in the first quarter, reaching a new post-2006 low, the bank said.

Making matters worse, JPMorgan's Home Price Monitor report points to a 12% drop in pending home sales in the month of April.

The bank said "a looming question is when and if lending standards will ease enough to boost demand."

Write to Kerri Panchuk.

via housingwire.com

Daily Real Estate News

Report: Real estate market won't hit bottom this year

Nearly half of all sales are distressed

By Inman News
Inman News™

Home values fell 8 percent year-over-year in April, according to a report from property search and valuation site Zillow.

Zillow's Home Value Index is now down 29.5 percent, to a median $169,588, from its peak of $240,656 in June 2006. That's equivalent to the index's level in May 2003, the report said.

Of 132 metro areas tracked, only three saw year-over-year appreciation: Honolulu (1 percent); Pittsburgh (0.9 percent); and Fort Myers, Fla. (0.5 percent). Nearly half saw double-digit decreases.

Homes in Ocala, Fla., lost the most value (-19.9 percent), followed by Manchester, N.H.; and Gainesville, Ga. (-16.5 percent each).

Month-to-month depreciation slowed slightly in April compared to late 2010. From March to April, the index fell 0.8 percent, compared with a 0.9 percent dip between November and December.

"In general, current trends are consistent with our earlier expectations of depreciation rates improving in the spring but from absolute levels that are high enough and at a pace that is slow enough that a bottom won't be reached this year," said Stan Humphries, Zillow's chief economist, in a statement.

"Key drivers at this point are the pace of foreclosures and improvement in the employment picture."

Depreciation was sharpest in the least expensive one-third of homes, which fell 1 percent month-to-month and 15 percent year-over-year, to a median value of $93,100. Values among the middle tier of homes declined 0.8 percent month-to-month and 8.7 percent year-over-year, to a median $157,600.

The most expensive third dipped 0.7 percent month-to-month and 4.9 percent year-over-year, to a median $293,500.

The rate of homes lost to foreclosure -- those repossessed by the lender or sold to a third-party at auction -- remained flat year-over-year at 10 of every 10,000 homes.

"This rate is substantially higher than the recent low point reached in December 2010, when 8.8 per 10,000 homes were liquidated, but also less than the high point of 11.3 per 10,000 homes, reached in October before the foreclosure slowdowns began," Humphries said.

Foreclosure resales rose for the 10th straight month in April, to 24 percent of overall sales, up from 16 percent in April 2010. That figure doesn't include short sales, which Zillow said accounted for an equal share of transactions in April.

Copyright 2011

Wow, the bad news just keeps coming.

My Way News - Americans' equity in their homes near a record low

WASHINGTON (AP) - Falling real estate prices are eating away at home equity. The percentage of their homes that Americans own is near its lowest point since World War II, the Federal Reserve said Thursday. The average homeowner now has 38 percent equity, down from 61 percent a decade ago.

The latest bleak snapshot of the housing market came as mortgage rates hit a new a low for the year, falling below 4.5 percent for a 30-year fixed loan. But even alluring rates have failed to deliver any lift to the depressed housing industry.

The Fed report is based on data from the first quarter of this year. Another report last week found that home prices in big cities have fallen to 2002 levels.

Normally, home equity rises as you pay off the mortgage. But home values have fallen dramatically since the bubble in prices burst in 2006. So many homeowners are losing equity even though the outstanding balance on the loan is getting smaller.

(AP) In this Feb. 4, 2011 file photo, a part of the JP Morgan Chase building reflects in its... Full Image

Nicole Rosen's home in tiny Spanaway, Wash., just outside the military base where her husband works, has lost $150,000 in value since she paid $275,000 for it in 2006. She has battled mortgage lenders in court for two years to stay out of foreclosure. In the meantime, the couple are paying off credit cards, figuring it's the only "positive thing we could do."

"We're paying off all our debt. We only have $200 left on our credit cards. But we're stuck in our house," Rosen said.

Home equity is important for the economy because it has a lot to do with how wealthy people feel. If they feel swamped by a mortgage loan, they're less likely to spend freely on other things. Home equity also serves as collateral for some loans.

There are 74.5 million homeowners in the United States. An estimated 60 percent have a mortgage. The rest have either paid off the loan or bought with cash.

Of the people who have mortgages, 23 percent are "under water," meaning they owe more on the mortgage than their home is worth, according to the private real estate research firm CoreLogic. An additional 5 percent are nearing that point.

(AP) Chart shows quarterly statistics on household net worth Full Image

The outlook for the housing market remains dim.

Fixed mortgage rates average 4.49 percent, extremely low by historical standards, and have fallen for eight straight weeks. But most people can't meet tougher lending requirements. Falling rates make it easier to refinance, too, but many of the people who can afford to do that already have.

And foreclosures keep hammering the housing market. On Thursday, the Obama administration said the three largest U.S. lenders - Wells Fargo, Bank of America and JPMorgan Chase - haven't helped enough people lower their mortgage payments to stay in their homes.

The government said it has started withholding the cash incentives it established for lenders under its 2-year-old foreclosure prevention program. The administration had hoped the program would prevent as many as 4 million foreclosures, but it has helped fewer than 700,000 people.

Foreclosures have economic ripples: Homes in foreclosure sell at a 20 percent discount on average, and those discounts erode prices throughout a neighborhood.

Many foreclosure sales have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years. When those foreclosures go through, prices may fall even further.

Home prices are expected to keep falling until the number of foreclosures for sale is reduced, companies start hiring in greater force, banks ease lending rules and more people think it makes financial sense again to buy a house. In some areas of the country, that could take years.

The Federal Reserve report found that Americans' overall net worth grew 1.65 percent in the January-to-March period, to $58.06 trillion, mostly because of stock market gains. Most of those gains have been erased since March, though.

Net worth is the value of assets such as homes and stocks, minus debts like mortgages and credit cards.

The report found household debt declined at an annual rate of 2 percent from the previous quarter, mostly because of a decline in mortgage debt, which has fallen for 12 straight quarters.

But the decline is deceiving. Mortgage debt is coming down because so many Americans are defaulting on payments and losing their homes to foreclosure, not just because people are paying off loans.

"A lot of this debt reduction is not voluntary," said Dana Saporta, director of U.S. economics at Credit Suisse.

The Fed report suggests the average household owes about $119,000 on mortgages, credit cards, auto loans and other debt.

Debt now equals 119 percent of the money Americans have left over after taxes. In late 2007, when the country was binging on debt, it was 135 percent. In the healthier 1990s, it was roughly 90 percent.

Auto loans, student loans and other consumer credit rose 2.4 percent during the quarter, a second straight gain. Analysts say more people, many of them unemployed, are borrowing money to attend school.

The Fed's quarterly report documents wealth, debt and savings for corporations, governments and households. It covers most of the financial transactions that take place in the United States.

It found that corporations are still hoarding cash. Excluding banks and other financial firms, companies held $1.9 trillion in cash at the end of the quarter. That was slightly more than in the previous quarter and set another record.

The reluctance of companies to spend more of their cash helps explain why job growth has been slow since the recession ended. The unemployment rate is 9.1 percent, slightly higher than when the year began.

Household net worth in America is up nearly 19 percent from early 2009 but still about 11 percent below its peak in 2007. Normally, greater wealth would spark consumer spending. But the lost home equity is counteracting it.

Per household, it comes to about $518,000. But the gap between the super-rich and everyone else in the United States has grown over the past three decades. So while average wealth is increasing, most Americans don't feel the difference.

---

AP Business Writer Matthew Craft in New York contributed to this report.

via apnews.myway.com

40% of underwater borrowers took cash out of homes

40% of underwater borrowers took cash out of homes

CoreLogic: Owners with home equity loans more than twice as likely to be upside down

By Inman News
Inman News™

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Homeowners with home equity loans are more than twice as likely to be "underwater" as those who didn't take cash out of their homes, according to statistics compiled by real estate and loan data aggregator CoreLogic.

CoreLogic estimates that at the end of March, 22.7 percent of homeowners with mortgages -- about 10.9 million borrowers -- owed more on their mortgage than their home was worth. That's down slightly from an estimated 11.1 million underwater borrowers at the end of December.

Falling home prices can put borrowers who have little equity in their homes underwater. By allowing homeowners to convert equity they have in their homes into cash, home equity loans reduce the cushion borrowers have against price declines.

CoreLogic said that 38 percent of borrowers with home equity loans were underwater at the end of March, compared with 18 percent of homeowners who had no home equity loan. More than 40 percent of all underwater homeowners (4.5 million) have home equity loans, CoreLogic said.

As might be expected, CoreLogic found that the presence of a home equity loan also increased the amount of negative equity. Underwater homeowners who had taken out home equity loans owed $83,000 more than their home was worth, on average, compared with $52,000 for those who hadn't taken cash out of their home.

Past studies have shown that the higher a borrower's combined loan-to-value ratio (CLTV), the more likely they are to stop making payments on their loan. In many cases, borrowers will opt for a "strategic default" -- not because they can't afford the monthly payments, but because they don't believe their home will regain its value anytime soon.

CoreLogic found that borrowers with home equity loans were slightly more likely to default at "moderate" levels of negative equity, up to 115 percent CLTV. Beyond that point, the relationship reverses, and default rates were slightly higher among homeowners without home equity loans.

Among all underwater borrowers nationwide, the average amount of negative equity was $65,000. In states with higher-cost housing, the average was considerably higher. In New York, underwater borrowers had an average of $129,000 in negative equity, followed by Massachusetts ($120,000), Connecticut ($111,000), Hawaii ($98,000), and California ($93,000).

At the other end of the scale, underwater borrowers in Ohio had the lowest negative equity -- $31,000, on average -- followed by Indiana ($34,000), and Minnesota ($38,000).

Nevada led all states in the proportion of underwater borrowers -- 63 percent of Silver State homeowners with mortgages owed more than their home was worth -- followed by Arizona (50 percent), Florida (46 percent), Michigan (36 percent), and California (31 percent).

At the metro level, Las Vegas led the nation, with 66 percent of mortgaged properties underwater, followed by Stockton (56 percent), Phoenix and Modesto (55 percent), and Reno (54 percent).

Metropolitan markets located outside of the five states with the highest negative equity shares include Greeley, Colo. (38 percent); Boise (36 percent); and Atlanta (35 percent).

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Half of Arizona mortgages still underwater | Phoenix Business Journal

More than 652,000 -- or about half -- of Arizona mortgage holders, are "underwater," or owe more than their homes are worth, according to a CoreLogic report released Tuesday.

The total represents about 49.6 percent of the total housing mortgages in Arizona, which has the second-highest rate of underwater mortgages in the nation.

The CoreLogic (NYSE: CLGX) report said negative equity continues to weigh on the U.S. housing market with 10.9 million residential properties, or 22.7 percent, upside down with borrowers in the first quarter.

The latest figure is a slight improvement from the fourth quarter last year, when 11.1 million, or 23.1 percent, of borrowers reported underwater mortgages.

Nevada posted the highest negative equity percentage with 63 percent of all mortgaged property currently upside down, closely trailed by Arizona with a 50 percent rate and Florida at 46 percent.

Many borrowers in a negative equity scenario are still able to make mortgage payments, but have experienced an income shock; such as a job loss, divorce or death, said CoreLogic Chief Economist Mark Fleming.

Although market indicators indicate slow, but positive economic growth — negative equity will continue to stunt the housing market recovery by holding back sale and refinance activity, he said.

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March home prices suffer double-dip setback - Yahoo! News

NEW YORK (Reuters) – U.S. single-family home prices dropped in March, dipping below their 2009 low, as the housing market remained bogged down by inventory and weak demand, a closely watched survey said on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.2 percent in March from February on a seasonally adjusted basis, in line with economists' expectations.

The price index was below the low seen in April 2009 during the financial crisis. The glut of houses for sale, foreclosures, tight credit and weak demand have kept the housing market on the ropes even as other areas of the economy start to recover.

The 20-city composite index was at 138.16, falling below the 2009 low of 139.26.

"This month's report is marked by the confirmation of a double-dip in home prices across much of the nation," David Blitzer, chairman of the index committee at S&P Indices, said in a statement. "Home prices continue on their downward spiral with no relief in sight."

Eight cities fell 1 percent or more in March, while Washington was the only city where prices increased on both a monthly and yearly basis. Prices in the 20 cities fell 3.6 percent year over year, topping expectations for a decline of 3.3 percent.

"The declines sustained in the last 12 months have almost erased the gains of the previous 12 months. The housing market is treading backward, but not drowning," said Cary Leahey, economist and managing director at Decision Economics in New York.

In the first quarter, the national index fell 1.9 percent on a seasonally adjusted basis, compared to a decline of 1.8 percent in the previous quarter. On a non-adjusted basis, they fell by 4.2 percent in the quarter. Nationally, home prices are back to their mid-2002 levels, the report said.

Financial markets saw little reaction to the data, with U.S. stock index futures pointing to a higher open on optimism that new aid for Greece from the European Union was on the horizon.

(Reporting by Leah Schnurr, additional reporting by Ellen Freilich, editing by W Simon )

via news.yahoo.com

More data that shows the real estate market is more than just soft. This quote by David Blitzer is disheartening: "Home prices continue on their downward spiral with no relief in sight." We will keep an eye on this to see how things trend over the next couple of months which are traditionally good months for selling a home.

Pending Home Sales: Pending Home Sales Dive 11.6% in April - CNBC

Pending sales of existing U.S. homes dropped far more than expected in April to touch a seven-month low, a trade group said on Friday, dealing a blow to hopes of a recovery in the housing market.

The National Association of Realtors Pending Home Sales Index dropped 11.6 percent to 81.9 in April, the lowest since September. Pending home sales lead existing home sales by a month or two.

Economists, who had expected pending home sales to fall 1.0 percent last month, said bad weather in some parts of the country might have affected home shopping.

"There may some temporary factors like bad weather in the South," said Gus Faucher, director of macroeconomics at Moody's Analytics in West Chester, Pennsylvania.

"Higher gasoline may be making potential home buyers a bit cautious. It is signaling further weakness in housing, but we do expect housing to turn around later this year. It just hasn't happened yet."

Pending home sales in the South, which was ravaged by tornadoes, dropped 17.2 percent. Sales were also down in the Midwest and the West.

The weak housing market is one the headwinds facing the economy as it make a slow recovery from the worst recession since the 1930s. The economy grew at a 1.8 percent annual rate in the first quarter after expanding at a 3.1 pace in the last three months of 2010.

via cnbc.com

The market continues to stagnate. Until there is some certainty about where the economy is going the housing market will continue to trudge along the bottom. There has been very little positive news to give buyers a reason to buy a home. I expect we will be like this for at least another 2 years.

New home sales at 4-month high, supply drops - Yahoo! News

WASHINGTON (Reuters) – New single-family home sales rose for a second straight month in April and supply was the lowest in a year, but an overhang of previously owned homes on the market will stifle any housing market recovery.

The Commerce Department said sales increased 7.3 percent to a seasonally adjusted 323,000 unit annual rate, the highest level since December, while prices also rose. Economists had expected a 300,000-unit pace.

All four regions recorded gains in sales, with the West reporting a 15.1 percent rise. However, compared to April last year sales were down 23.1 percent.

"Although the headline figure has moved sharply on a month-to-month basis, reflecting in part the impact of harsh weather in earlier months, the bottom line is that the new home market continues to bounce along the bottom," said Omair Sharif, an economist at RBS in Stamford, Connecticut.

An oversupply of used houses and a relentless wave of foreclosed properties are curbing the market for new homes, even as builders are keeping lean inventories.

There were a record low 175,000 new homes available for sale last month, down 2.8 percent from the prior month.

Data last week showed a steep drop in new home construction in April and a dip in sales of previously owned homes.

"There's still a tremendous overhang in the housing market, and while new home sales are starting to percolate, that doesn't change the fact that we still have such huge inventory," said Michael Yoshikami, chief investment strategist at Ycmnet Advisors in Walnut Creek, California.

Stocks on Wall Street were little changed, while prices for U.S. government bonds fell ahead of new debt sales later in the week. The dollar fell against a basket of currencies.

SLUGGISH GROWTH

While the report cast a positive light on the housing market, it did little to change perceptions the economy remained mired in a soft patch.

That view was reinforced by a Richmond Federal Reserve survey showing manufacturing activity in the central Atlantic region stalled in May, after expanding during the previous seven months.

The Richmond Fed's manufacturing index came in at -6, a sharp contraction from the reading of +10 in April, dragged down by declining shipments and new orders.

It added to a raft of other data ranging from retail sales to industrial production that have painted a picture of an economy struggling to regain momentum as the second quarter started, with employment only the bright spot.

The government is expected to report on Thursday that the economy grew at a still tepid 2.1 percent annual rate in the first quarter, according to a Reuters survey, rather than the 1.8 percent pace it estimated last month.

The upward revision will most likely reflect a slightly faster pace of inventory accumulation than initially thought.

The Commerce Department report also showed the median sales price for a new home rose 1.6 percent last month to $217,900. Compared with April last year, the median price increased 4.6 percent.

At April's sales pace, the supply of new homes on the market dropped to 6.5 months' worth, the lowest since April last year, from 7.2 months' worth in March.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

via news.yahoo.com

New Home sales appear to be in decent change, but builders are keeping their inventories low because demand is low due to a huge supply of resale homes. Those resale homes will be around for a lot longer.

Notice of Trustee Sale filings were down 27.9 percent in April 2011

Notice of Trustee Sale filings were down 27.9 percent in April 2011 from the prior month, falling to the lowest point we've seen since we began tracking Arizona in August 2009, and down 415 percent from the same time last year. There was a similar dip in foreclosure sales, with a 22.2 percent drop in sales Back to Bank and a 15.4 percent decline in Sales to 3rd Parties month-over-month. Cancellations rose 18.8 percent month-over-month, which together with the drop in filings led to 10.6 percent fewer properties Scheduled for Sale.

Most expect housing recovery is years away | Phoenix Business Journal

Only about 5 percent of the population believes the residential real estate industry has recovered — the same percent as last year, a new report shows.

Homebuyers, sellers and renter site Trulia.com and online marketplace RealtyTrac on Wednesday released the results of an ongoing survey tracking Americans' attitudes regarding the housing industry. The resulting report found that about 54 percent of respondents don't expect real recovery until 2014 or later.

An even smaller number, about 3 percent, forecast recovery happening before the end of this year. Another 156 percent see the change happening in 2012. Finally, close to a quarter said things will improve by 2013. One Trulia expert said he expects the market to be volatile through at least the end of 2011.

“Most Americans, as our latest survey revealed, overestimated how quickly the housing market would bounce back, but when it does, it will likely be a long and gradual process,” Trulia co-founder and CEO Pete Flint said. “On the flip side, mortgage rates won’t stay low forever and even if home prices continue to fall for a bit, now is still a good time to enter the housing market."

He expects about 18 months before Americans see real stability in the market.

A separate RealtyTrac report found Arizona is the No. 2 state in the country for home foreclosures, but that filings had actually dropped from the previous month.

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I am with those that think the recovery will not show in Arizona until late 2012 or 2013 at the earliest.

Home building, manufacturing slump in April - Yahoo! News

WASHINGTON (Reuters) – Housing starts and building permits fell in April and factory output slumped as an automobile parts shortage crimped production, showing the economy got off to a weak start in the second quarter.

Corporate results from Home Depot Inc added further evidence of a decline in housing after the No. 1 home improvement chain noted poor weather hurt the spring selling season and sapped its sales.

Groundbreaking for new housing dropped 10.6 percent to an annual rate of 523,000 units, the Commerce Department said on Tuesday, as a glut of homes on the market discouraged new projects. March's starts were revised up to a 585,000-unit pace from the previously reported rate of 549,000 units.

The report pointed to prolonged weakness for the sector. Economists had forecast housing starts rising to a 568,000-unit rate. Compared to April last year, residential construction was down 23.9 percent, the largest decline since October 2009.

Starts in the South slumped to a two-year low.

"We're still struggling to find the bottom here for the housing market. It does not bode well for construction in the near term, and there's a good deal of overhang in terms of inventory," said Michael Woolfolk a senior currency strategist at BNY Mellon in New York.

A separate report showed the Japanese earthquake had hit U.S. manufacturing output, which fell 0.4 percent in April after 9 consecutive monthly increases, the Federal Reserve said. Overall industrial production was flat, buoyed by gains in mining and utilities.

Excluding cars and parts, manufacturing output rose 0.2 percent.

Capacity utilization, a measure of how close to flat out factories are running, fell unexpectedly in April, suggesting scant inflationary pressures in the world's largest economy.

Wal-Mart Stores Inc's, the world's largest retailer, said its U.S. business continues to struggle even as international sales held strong.

U.S. stocks fell on concerns about the economic recovery, while Treasury debt prices rose and the dollar firmed against a basket of currencies.

TOO MANY HOUSES ON THE MARKET

Residential construction is being crowded out by an oversupply of used homes on the market, in particular, foreclosed properties, which sell well below their value.

In March, the spread between the prices of new and previously owned houses was about $54,200.

Home builders' sentiment was flat in May, the National Association of Home Builders said on Monday.

Though builders expected a modest improvement in sales during spring, they anticipated market conditions to weaken in the next six months.

Residential construction accounts for about 2.2 percent of gross domestic product. Investment in home building contracted in the first quarter after a modest increase in the last three months of 2010.

Groundbreaking last month was depressed by a 24.1 percent tumble in the volatile multi-family homes sector, where starts for buildings with five or more units dropped 28.3 percent. Single-family home construction fell 5.1 percent.

New building permits dropped 4.0 percent to a 551,000-unit pace last month. March's permits were revised down to a 574,000-unit pace and economists had expected overall building permits in April to remain unchanged at the previously reported 585,000-unit pace.

Permits were held down last month by an 8.8 percent drop in the multi-family segment. Permits to build single-family homes slipped 1.8 percent.

New home completions rose 4.1 percent to 554,000 units in April.

(Additional reporting by Mark Felsenthal; Editing by Andrea Ricci)

via news.yahoo.com

Zillow: Phoenix home prices decline, 68 percent underwater | Phoenix Business Journal

Home values in Phoenix are continuing to decline, according to a first quarter report released by Zillow.com.

Phoenix also has the highest percentage of homeowners with negative equity on their mortgages at 68.4 percent, the report noted.

Home values in the Phoenix metro area dropped another 2.3 percent between the last quarter of 2010 and the first quarter of 2011. The year-over-year drop was 11.2 percent. The home value drop from the market peak in Phoenix is 55.3 percent.

The report surveyed 132 markets.

Other markets with a large percentage of mortgages underwater include Atlanta (55.7 percent), Riverside, Calif. (50.7 percent), Tampa, Fla. (59.8 percent) and Sacramento, Calif. (51.2 percent).

Other markets with a large drop in values from the peak include Miami-Ft. Lauderdale (55.4 percent), Detroit (55.5 percent) and Orlando (55.2 percent).

However, the greatest concern is the current drop in values during the last quarter.

“Home values in the United States fell faster in the first quarter of 2011 than they have in any quarter since 2008, when the housing market experienced its worst performance,” the report states. “Very few markets were exempt from home value declines in the first quarter.”

The markets recording the largest declines for the quarter include Chicago (4.8 percent), Atlanta (4.4 percent), Detroit (5.2 percent), Minneapolis-St. Paul (4.8 percent), St. Louis (4 percent) and Sacramento (4.2 percent).

Only four markets recorded increases or remained flat. They are Fort Myers, Fla. (2.4 percent increase); Champaign-Urbana, Ill. (0.8 percent increase); Honolulu, Hawaii (0.3 percent) and Sarasota, Fla. (no change).

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This is not good news. It will be a long while before this market settles down.

Reagor: Foreclosure activity eased in April

My plan had been not to lead this column with news about foreclosures this week, instead focusing on a more positive indicator or trend in metro Phoenix's real-estate market.

But the foreclosure numbers from April quickly changed my mind. Pre-foreclosures fell to 4,200 last month, their lowest level since December 2007, according to real-estate-research firm Information Market.

In Arizona, pre-foreclosures are notice-of-trustee-sale filings that signal that a lender has started the legal process of taking a home back from a borrower.

In April, foreclosures dropped to 4,500, which is 500 fewer than in March. Foreclosures are legally known as trustee sales.

And the number of active residential notices, or pending foreclosures in metro Phoenix, dropped to 30,790. A year ago, this key market indicator was 30 percent higher.

A few more months of drops in foreclosure activity like April's, and it finally could be safe to say the region's housing market is starting to recover.

- Loan-modification investigation: The Arizona attorney general is asking for a court-ordered injunction to stop two people accused of deceptive loan-modification practices.

The two men, Robert Daniel Hayes and Camerin Charles Hawthorne, offer loan services under the company names Mediation Services and Metropolis Loans, according to the attorney general.

The complaint alleges the men solicited loan-modification customers over the phone and charged them upfront fees of $2,500. A new Arizona law makes it illegal for loan-modification firms to charge fees before trying to modify a mortgage.

The complaint also alleges Mediation Services told customers it was affiliated with CitiMortgage, and they had been preapproved for loan modification.

Attorney General Tom Horne has asked a Maricopa County Superior Court to prohibit the men from continuing the practices.

A hearing for the complaint has been set for May 20.

via azcentral.com

This is a positive sign. Let's hope that the trend continues.

Home prices fall for 8th month in February: S&P/Case - Yahoo! News

NEW YORK (Reuters) – U.S. single-family home prices fell for an eighth straight month in February, inching closer to an April 2009 trough, a closely watched survey said on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.2 percent in February from January on a seasonally adjusted basis, slightly better than economists' median forecast for a drop of 0.3 percent.

The 20-city composite index was at 139.27, holding just a hair above its 2009 low of 139.26. Average home prices across the United States are back to levels where they were in the summer of 2003.

Prices in the 20 cities have fallen 3.3 percent year over year, in line with expectations.

"There is very little, if any, good news about housing. Prices continue to weaken, trends in sales and construction are disappointing," David Blitzer, chairman of the Index Committee at S&P Indices, said in a statement.

"Recent data on existing-home sales, housing starts, foreclosure activity and employment confirm that we are still in a slow recovery."

The glut of houses up for sale has kept prices low and the market has struggled to regain traction since a home buyer tax credit expired last spring.

Other data in the last week has suggested some stabilization in the market with sales of new and existing homes rising in March.

Financial markets were unchanged by the Case-Shiller data on Tuesday, with U.S. stock index futures pointing to a higher open with investors focused on earnings from major companies.

(Reporting by Leah Schnurr, Editing by Chizu Nomiyama)

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New home sales up, inventory at 43-1/2 year low - Yahoo! News

WASHINGTON (Reuters) – New U.S. single-family home sales increased more than expected in March and the supply of new houses on the market hit their lowest level since August 1967, but prices fell from a year ago.

The Commerce Department said on Monday sales rose 11.1 percent to a seasonally adjusted 300,000 unit annual rate, after an upwardly revised 270,000 unit pace in February.

Economists polled by Reuters had forecast new home sales climbing to a 280,000-unit pace last month from a previously reported record low 250,000 unit rate.

Compared to March last year sales were down 21.9 percent.

The market for new homes is being squeezed by competition from previously owned homes and a deluge of foreclosed properties, even though inventories of new houses are at a 43-1/2 year low.

A report last week showed there were 3.55 million previously owned homes on the market in March, well above the economy's natural rate of between 2 million and 2.5 million.

When foreclosed homes and those that are highly delinquent are taken into account, economists say supply is anywhere in the range of 8 million to 9 million.

The median sales price for a new home rose 2.9 percent last month to $213,800 from February. Compared with March last year, the median price fell 4.9 percent.

At March's sales pace, the supply of new homes on the market slipped to 7.3 months' worth from 8.2 months' worth in February. There were 183,000 new homes available for sale last month, the lowest since August 1967.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

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The main reason there is low inventory in Arizona is nobody has been building. So the supply side is really not that unexpected. Good news that sales are up, though.

Existing home sales rise, prices fall - Yahoo! News

WASHINGTON (Reuters) – Sales of previously owned U.S. homes rose more than expected in March, a trade group said on Wednesday, suggesting the housing market's downward trend may be close to hitting a bottom.

The National Association of Realtors said sales rose 3.7 percent month over month to an annual rate of 5.10 million units after an upwardly revised 4.92 million unit pace in February.

Economists polled by Reuters had expected sales to rise 2.5 percent to a 5.0 million-unit pace from the previously reported 4.88 million unit rate. Sales have now risen in six of the past eight months.

"It's slow, steady progress, but you cannot not be disturbed by the slow pace of recovery," said Pierre Ellis, an economist at Decision Economics in New York. "Demand is rising even with higher mortgage rates so that's encouraging."

The housing market is struggling to find its footing as a wave of foreclosed properties keeps supply elevated and prices depressed.

Last month, foreclosures and short sales, which typically occur at about 20 percent below market value, accounted for 40 percent of transactions. That was the highest since April 2009 and was up from 39 percent in February.

The median home price fell 5.9 percent in March from a year earlier to $159,600. Compared with March last year, sales were down 6.3 percent.

"A sustained turnaround in the housing market is still far off based on earlier-released depressed readings for housing starts, building permits and builders' confidence indices," said Krishen Rangasamy an economist at CIBC World Markets in Toronto.

MORTGAGE APPLICATIONS UP

A separate report on Wednesday showed demand for home loans rose last week, as interest rates eased and purchase activity picked up. The Mortgage Bankers Association said its purchase index rose 10 percent to 210.8, the highest since early December.

Last month, all-cash purchases made up a record 35 percent of sales in March and the NAR said the lower and upper ends of the market were showing strong activity, with the middle part -- which accounts for the existing housing market -- remaining sluggish.

Sales last month rose across the board, with multifamily dwellings rising 1.6 percent and single-family home units advancing 4 percent.

At March's sales pace, the supply of existing homes on the market slipped to 8.4 months' worth from 8.5 months in February. However, the number of previously owned homes on the market rose 1.5 percent to 3.55 million.

A supply of between six and seven months is generally considered ideal, with higher readings pointing to lower house prices.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

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Housing starts, permits rebound in March - Yahoo! News

WASHINGTON (Reuters) – Housing starts and permits for future home construction rose more than expected in March, snapping back from the prior month's winter weather depressed levels, government data showed on Tuesday.

The Commerce Department said housing starts rose 7.2 percent to a seasonally adjusted annual rate of 549,000 units. February's starts were revised up to a 512,000-unit pace from the previously reported rate of 479,000 units.

Economists polled by Reuters had forecast housing starts rising to a 520,000-unit rate. Compared to March last year, residential construction was down 13.4 percent.

Still, the bounce back in residential construction does not signal recovery as an over- supply of homes continues to discourage builders from embarking on new projects.

"It's mainly a rebound from previous month's decline. We still think the housing market is very weak, and the high inventory is still depressing sales and prices," said Sireen Harajli, an economist at Credit Agricole Corporate & Investment Bank in New York.

"We hope to see some signs of improvement toward the end of the year, but we won't see substantial improvement until 2012."

Stock index futures were steady at higher levels, while government debt prices were steady at lower levels. The dollar held at lower levels versus the euro.

Home builders' sentiment slipped a notch in April, the National Association of Home Builders said on Monday, with builders viewing sales conditions now and in the next six months as unfavorable.

Residential construction was likely a drag on economic growth in the first quarter after making a modest contribution in the last three months of 2010. Home building accounts for about 2.4 percent of gross domestic product.

Groundbreaking last month was lifted by a 5.8 percent rise in volatile multifamily homes. Single-family home construction increased 7.7 percent.

New building permits advanced 11.2 percent to a 594,000-unit pace last month, rebounding from February's record low 534,000 units. Economist had expected overall building permits to rise to a 540,000-unit pace in March.

Permits were propped up last month by a 25.2 percent jump in the multifamily segment. Permits to construct buildings with five or more units rose to their highest level since January 2009 -- likely reflecting growing demand for rental properties.

Permits to build single-family homes rose 5.7 percent. However, new home completions dropped 14.2 percent to a record low 509,000 units in March

(Reporting by Lucia Mutikani, editing by Neil Stempleman)

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New home sales plunge to record low in February - Yahoo! News

WASHINGTON (Reuters) – New single-family home sales unexpectedly fell in February to hit a record low and prices were the lowest since December 2003, showing the housing market slide was deepening.

The Commerce Department said on Wednesday sales dropped 16.9 percent to a seasonally adjusted 250,000 unit annual rate, the lowest since records began in 1963, after an upwardly revised 301,000-unit pace in January.

Sales plunged to all-time lows in three of the four regions last month. Economists polled by Reuters had forecast new home sales edging up to a 290,000-unit pace last month from a previously reported 284,000 unit rate.

"It's been a disappointing February for home sales and there are no signs of a turnaround," said Kurt Karl, chief U.S. economist at Swiss Re in New York.

"We're going to have a continuing slowdown in the next few months, but people will start to feel better in the second half of the year and construction and sales should do better later this year and into next year."

U.S. stock indexes fell on the data, while government debt prices rose marginally. The dollar was little changed.

Compared to February last year sales were down 28 percent.

An oversupply of homes exacerbated by an increasing flood of properties falling into foreclosure is frustrating recovery in the housing market. Data on Monday showed a steep drop in sales of previously owned homes in February, with prices tumbling to a near nine-year low.

HOUSE PRICES PLUNGE

The median sales price for a new home plunged 13.9 percent last month to $202,100, the lowest since December 2003. Compared with February last year, the median price fell 8.9 percent. Persistent price declines could dampen hopes of a pick-up in sales during spring.

In the face of stiff competition from foreclosed properties, which typically sell well below market value, builders are holding back on new construction.

At February's sales pace, the supply of new homes on the market rose to 8.9 months' worth, the highest since August, from 7.4 months' worth in January.

There were 186,000 new homes available for sale last month, matching the prior month's inventory. That was still the smallest supply of home since 1967.

Despite lean inventories, new home sales will likely continue to bounce along the bottom for a while until the glut of previously owned homes is whittled down. New home sales account for less than 10 percent of overall sales.

According to the National Association of Realtors, new home prices have been running 45 percent higher than existing home prices, a premium that is historically about 15 percent, indicating previously owned homes are selling well below the cost of construction.

Separately, the Mortgage Bankers Association said applications for home loans rebounded 2.7 percent last week.

(Reporting by Lucia Mutikani; Additional reporting by Ellen Freilich in New York; Editing by Andrea Ricci)

via news.yahoo.com

The housing market continues to be a drag on the recovery.

Home sales dive, prices near 9-year low - Yahoo! News

WASHINGTON (Reuters) – Sales of previously owned U.S. homes plunged in February and prices hit their lowest level in nearly nine years, implying a housing market recovery was still a long way off.

The National Association of Realtors said on Monday sales fell 9.6 percent month over month to an annual rate of 4.88 million units, snapping three straight months of gains. The percentage decline was the largest since July.

Economists polled by Reuters had expected February sales to fall 4.0 percent to a 5.15 million-unit pace from the previously reported 5.36 million unit rate in January. January's pace was revised up slightly to 5.40 million.

"This is a frustrating number. The U.S. residential real estate market doesn't seem to want to turn around despite better affordability," said David Carter, chief investment officer at Lenox Advisors in New York.

Financial markets largely ignored the data. U.S. stocks were up sharply in early trade, partly on news of a bid by AT&T for Deutsche Telekom AG's T-Mobile USA and growing hopes Japan would get its nuclear crisis under control.

U.S. debt prices extended losses as the U.S. Treasury said it would begin selling off $142 billion in mortgage-backed securities it had acquired to help tame the financial crisis, while the dollar rose against the yen on intervention worries.

The Realtors' group said the median home price dropped 5.2 percent in February from a year earlier to $156,100, the lowest since April 2002, a sign of the relentless downward pressure on prices from a market flooded with foreclosure sales.

"If the price declines persist, even with the job market recovery, that could hamper recovery in the housing market," said NAR chief economist Lawrence Yun.

A glut of homes on the market and the flood of foreclosure properties are holding back a recovery in the housing sector, whose collapse helped to tip the U.S. economy into its worst recession since the 1930s.

Foreclosures and short sales, which typically occur below market value, accounted for 39 percent of transactions in February, up from 37 percent the prior month, the trade group said. All-cash purchases made up a record 33 percent of transactions in February.

Sales fell across the board, with multifamily dwellings declining 10 percent and single-family home units dropping 9.6 percent. Compared with February last year, overall sales were down 2.8 percent.

At February's sales pace, the supply of existing homes on the market rose to 8.6 months' worth from 7.5 in January. A supply of between six and seven months is generally considered ideal, with higher readings pointing to lower house prices.

(Additional reporting by Ryan Vlastelica in New York; Editing by Andrea Ricci)

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Housing starts see biggest drop since 1984 - Yahoo! Finance

Housing starts see biggest drop since 1984

WASHINGTON (Reuters) - Housing starts posted their biggest decline in 27 years in February while building permits dropped to their lowest level on record, suggesting the beleaguered real estate sector has yet to rebound from its deepest slump in modern history.

Groundbreaking on new construction dropped 22.5 percent last month to an annual rate of 479,000 units, according to Commerce Department data released on Wednesday. This was just above a record low set in April 2009 and way below the estimates of economists, who had been looking for a smaller drop to 570,000.

January's figure was revised up to 618,000 units from 596,000. But that did not change the tenor of the report, which confirmed that the sector is failing to recover despite interest rates near record lows.

Building permits, a hint of future construction demand, fell to a record low of 517,000 units from a revised 563,000, and were down by about 20 percent from levels seen in February 2010.

Housing was at the epicenter of the financial crisis of 2007-2009.

One key impediment to the sector's recovery is a vast backlog of unsold inventory, while a shaky job market has also made consumers reluctant to embark on any major new financial commitments. Making matters worse, a glut of foreclosures, stalled in recent months by revelations of improper loan documentation, is depressing the market.

via finance.yahoo.com

Underwater mortgages rise as home prices fall - Yahoo! News

WASHINGTON – The number of Americans who owe more on their mortgages than their homes are worth rose at the end of last year, preventing many people from selling their homes in an already weak housing market.

CoreLogic says about 11.1 million households, or 23.1 percent of all mortgaged homes, were underwater in the October-December quarter. That's up from 22.5 percent, or 10.8 million households, in the July-September quarter.

The number of underwater mortgages had fallen in the previous three quarters, but that was mostly because more homes had fallen into foreclosure.

Underwater mortgages typically rise when home prices fall. Home prices in December hit their lowest point since the housing bust in 11 of 20 major U.S. metro areas. In a healthy housing market, about 5 percent of homeowners are underwater.

via news.yahoo.com

Home prices hit post-bust lows in most big cities - Yahoo! Finance

WASHINGTON (AP) -- Home prices in a majority of major U.S. cities tracked by a private trade group have fallen to their lowest levels since the housing bubble burst, and analysts expect further declines this year.

The Standard & Poor's/Case-Shiller 20-city home price index fell 1 percent in December from November. Prices fell in all but one of the metropolitan markets tracked.

The only city to see a gain was Washington, where hiring by the federal government has helped boost the region's job market.

Eleven of the markets hit their lowest point since the housing bust, in 2006 and 2007: Atlanta, Charlotte, N.C., Chicago, Detroit, Las Vegas, Miami, New York, Phoenix, Portland, Ore., Seattle and Tampa, Fla.

The housing sector is struggling even while the rest of the economy is showing signs of a slow but steady recovery. The latest evidence of this divide came Tuesday when the Conference Board said its Consumer Confidence Index rose in February to its highest point in three years. The index surveys how people feel about hiring and income, and how they see that changing over the next six months.

By contrast, the outlook for housing in 2011 is not promising. Construction of new homes has fallen to a rate of about 600,000 homes built per year. In a healthy economy, builders expect to construct about 1 million homes each year. Homeowner vacancy rates are near record highs and the creation of new households in the United States is at its lowest point in four decades.

"Despite improvements in the overall economy, housing continues to drift lower and weaker," said David M. Blitzer, chairman of the index committee at Standard & Poor's.

The damage from the real estate bubble has spread well beyond the Sun Belt, where new homes cropped up at a frantic pace during the mid-2000s. In many places, prices are expected to keep falling for at least the next six months and several analysts said they expect prices to fall at least another 5 percent.

Some of the worst declines are in cities hit hardest by foreclosures and high unemployment, including Detroit, Phoenix and Tampa. A home that sold for $250,000 in the Motor City in 2000 now sells for roughly $163,150, according to the housing report. Homes in Las Vegas and Cleveland now sell, on average, for less than they of what they did a decade ago. Many people are holding off buying or selling homes because they fear the market hasn't hit bottom yet.

A large number of homes that aren't selling are contributing to a second wave of price declines since the boom years. Many of them have been vacant for months.

In December, prices fell for the sixth straight month and for the eighth time in the past 11 months. Foreclosures are also expected to increase as the year goes forward.

"There's just way too many homes out there relative to demand and we're not going to see that change anytime soon," said Joshua Shapiro, chief U.S. economist for MFR Inc.

The housing recovery is uneven across the United States. Coastal cities in California and the Northeast are faring much better than the Midwest and Southeast. That's mainly because they benefit from expensive and somewhat recession-proof housing markets buoyed by low unemployment and limited new construction.

The Case-Shiller report measures home price increases and decreases relative to prices in January 2000 and gives an updated three-month average for the metropolitan areas it looks at.

via finance.yahoo.com