Carpe Diem

Today’s housing data

Some highlights of today’s report on new home sales in January from the Census Bureau:

1. The number of new homes sold in January (437,000 at a seasonally adjusted annual rate) was the best month for new home sales since July 2008, and the best January in five years.

2. The total sales volume in January at more than $125 billion was the best month for total sales since July 2008.

3. The supply of new homes for sale at the current sales pace fell to 4.1 months in January, the lowest level of inventory of new homes relative to sales since October 2004 (3.9 months). The historically low housing inventory levels (for both new and existing-homes) should provide increased incentives for home builders to increase construction activity this year.

Some highlights of today’s report on home prices for December from the FHFA:

1. The monthly seasonally adjusted purchase-only house price index for the U.S. has increased for 11 consecutive months on a year-over-year basis, and the 5.8% increase in December was the largest annual gain in home prices since June 2006.

2. The FHFA house price index in December (193.8) was the highest level for US home prices since November 2011, more than three years ago.

Update: Some highlights of the Case-Shiller report on US home prices for December:

1. Based on the 20-city Case-Shiller price index, December home prices increased by 6.8% from a year earlier, with increases in 19 of 20 cities (only New York showed a minor decrease).

2. That was the highest annual gain in home prices since a 7.2% increase in July 2007; and on a calendar year basis, it was the best gain since 2005 when prices increased 15.5%.

3. By metro area, double-digit gains in 2012 home prices were common, with the highest home price increases in Phoenix (23%), San Francisco (14.4%), Detroit (13.6%), Las Vegas (12.9%) and Minneapolis (12.2%).

MP: More evidence from today’s housing reports that 2012 was the “year of the housing recovery,” and the recovery continues in 2013. Look for housing, energy and manufacturing to be among the three strongest sectors of the US economy this year.

5 thoughts on “Today’s housing data

  1. Here is what could and will go wrong. Everyone in the country that could refinance to a mortgage rate of 4% or lower has done so. Contrary to Bernanke’s rhetoric that “QE to Infinity” would lower mortgage rates, they have just risen to a six month high as the 10 Year Treasury rose 60 basis points from its 2012 low. If mortgage rates just rose to a modest 5% the housing market would come to a grinding halt as no one would trade a 3.5% mortgage for a 5% mortgage. As I’ve detailed earlier, there are 3.9 vacant housing units available for rent. Almost half of the new housing units under construction are apartments. The Wall Street shysters are converting millions of foreclosed homes into rental units. This avalanche of rental properties will depress rents and destroy the modeled ROI calculations of the brilliant Wall Street Ivy league MBAs. These lemmings will all attempt to exit their “investments” at the same time. The FHA is already broke. The mounting losses from their 3.5% down payment to future deadbeats program will force them to curtail this taxpayer financed debacle. There will be few first time home buyers, as young people saddled with a trillion dollars of student loan debt are incapable of buying a home.

    http://www.zerohedge.com/news/2013-02-25/guest-post-its-always-best-time-buy

    • “If mortgage rates just rose to a modest 5% the housing market would come to a grinding halt ..”

      Bullcrap. I bought my current house in March of 2010 at 5.25%. I’m not suffering for it, either.

      Obviously refinancings would go down, but since, as your article said, “Everyone in the country that could refinance to a mortgage rate of 4% or lower has done so,” who cares? Home purchase activity depends more on job creation, population growth, household formation and the state of existing housing stock, not as much on interest rates.

      • Obviously refinancings would go down, but since, as your article said, “Everyone in the country that could refinance to a mortgage rate of 4% or lower has done so,” who cares? Home purchase activity depends more on job creation, population growth, household formation and the state of existing housing stock, not as much on interest rates.

        You are missing the fact that activities and prices are set at the margin. If the rate goes up people will not be able to pay as much as they did for new homes. That means that prices would fall and many will wind up with homes that are less than the outstanding amount on their mortgages. The price drop will hurt those who have homes that are worth less.

  2. New home sales up 15% (way above expectations), inventories at current selling rates plunge to 4.1 months and are down to the lowest level since 2005, spectacular affordability as far as the eye can see, 19 of 20 areas as measured by Case-Schiller showed higher prices with the NY area as the only looser.

    This is the real deal. The rest is hoopla.

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