March sees increase in existing-home sales
Existing-home sales in March increased 3.7% to a seasonally adjusted annual rate of 5.10 million, the National Association of Realtors (NAR) reported this morning.
February’s sales estimate was revised upwards from 4.88 million to 4.92 million. March’s estimate is 6.3% below March 2010, when existing-home sales were at a pace of 5.44 million.
The month-to-month increase is a pattern the NAR expects to continue. “Existing-home sales have risen in six of the past eight months, so we’re clearly on a recovery path,” said Lawrence Yun, NAR chief economist. “With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain — primarily because some buyers are finding it too difficult to obtain a mortgage. For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows.”
The national median existing-home price for all housing types was $159,600 in March, down 5.9% from March 2010. Distressed homes — typically sold at discounts in the vicinity of 20% — accounted for a 40% market share in March, up from 39% in February and 35% in March 2010.
“Although home sales are coming back without a federal stimulus, sales would be notably stronger if mortgage lending would return to the normal, safe standards that were in place a decade ago — before the loose lending practices that created the unprecedented boom and bust cycle,” Yun said.
Housing starts stuck under 550,000
The Department of Commerce’s residential construction report released today shows both total starts and single-family starts for March are up over February, but way down compared with March 2010.
March housing starts were at a seasonally adjusted annual rate of 549,000, up 7.2% from February, but down 13.4% from the same month last year.
Single-family starts were reported at a pace of 422,000, up 7.7% compared with February, but down 21.1% compared with March 2010.
On an unadjusted basis, there were an estimated 45,900 total housing starts in March.
Also on an unadjusted basis, the first three months of 2011 have yielded 121,000 housing starts, compared with 134,300 in the first three months of 2010. With the first quarter of 2011 running at a 9.9% decrease, early forecasts of a 20% gain in 2011 housing starts look increasingly bullish. And to add perspective to the numbers: March 2011 was the second slowest March on record — only March 2009, with its pace of 520,000 starts, was slower in terms of residential construction.
Building permits were up 2.6% to a March rate of 594,000. But this seasonally adjusted annual rate was also down double digits — 13.3% — from the March 2010 estimate.
Builders urge Congress to open up credit
The National Association of Home Builders (NAHB) has asked members to contact Congress in support of legislation to open up lines of credit for new-housing production.
The association sent an alert to members, encouraging them to ask their representatives to co-sponsor the Home Construction Lending Regulatory Improvement Act.
"As we move into the spring home-buying season, builders and developers across the country continue to suffer from a severe lack of credit for viable home-building projects, which has major implications for the economy as a whole,” said NAHB chairman Bob Nielsen. “With scores of housing markets nationwide starting to show signs of improvement, this legislation recognizes that there is an urgent need to expand the flow of credit to builders in these communities to meet demand and keep the expansion moving ahead.”
According to the NAHB, the bill — sponsored by by Rep. Gary Miller (R-Calif.) and Rep. Brad Miller (D-N.C.) — targets specific regulatory obstacles to credit availability for the home-building industry. For instance, it seeks to cease implementing a 100% capital bank lending limit for Acquisition, Development and Construction (AD&C) loans as a “hard” limit, and utilize the 100% of capital guideline as it was intended.