This Week in Real Estate: May 31, 2016

Analysis of April results were reported This Week in Real Estate finding new home sales, pending home sales and prices registered significant increases. Below are a few highlights from the fourth week of May that influence our business:

* Pending Home Sales Surge to 10-Year High. Pending home sales reached their highest level in over a decade in April, according to the National Association of Realtors. All major regions saw gains in contract activity last month except for the Midwest, which saw a meager decline. The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, hiked up 5.1 percent to 116.3 in April from an upwardly revised 110.7 in March and is now 4.6 percent above April 2015 (111.2). After last month’s gain, the index has now increased year-over-year for 20 consecutive months. Following the housing market’s best first quarter of existing-sales since 2007 and a decent increase in April, Lawrence Yun, NAR chief economist, expects sales this year to climb above earlier estimates and be around 5.41 million, a 3 percent boost from 2015. The PHSI in the West soared 11.4 percent in April to 106.2, and is now 2.8 percent above a year ago.
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* New Home Sales Roar Back, Crushing Forecasts With a 619,000 Annual Pace in April. Sales of new homes surged in April, a sign that builders are stepping up as demand for housing remains robust. Sales soared 16.6% to a seasonally adjusted annual rate of 619,000 the Commerce Department said Tuesday. That was the biggest monthly jump in 24 years and trounced estimates of a 525,000 pace. The median price also jumped, rising 9.7% from 12 months ago to $321,100. Sales so far in 2016 have averaged a 553,500 annual pace, 10% higher than the 503,000 notched in 2015. Regional performance was mixed, from a 52.8% surge in the Northeast to a 4.8% decline in the Midwest. The south saw a 15.8% increase, while in the West sales were up 18.8%.
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* Home Prices Heat Up In Sun Belt, Pacific Northwest. Home prices rose 5.7% in the first quarter compared to the same period a year ago, driven by growth in areas battered by the housing bust and in the hard-charging economies of the Northwest. It was the 19th quarter of price increases for the Federal Housing Finance Agency’s index, which tracks purchases of homes with mortgages backed by Fannie Mae or Freddie Mac. Prices were up in all states and the District of Columbia in the first quarter compared to the same period a year ago, but there was a big gap between the biggest price appreciations and the lowest. Oregon (11.77%) and Washington (10.93%) respectively rank #1 and #3 in the country in year-over-year price appreciation. Seattle (15.39%) and Portland (13.69%) respectively rank #2 and #4 among all metro areas in the country in year-over-year price appreciation.
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* Foreclosure Starts Hit 10-Year Low. There were fewer foreclosure proceedings initiated during the month of April than in any month in the last 10 years, a new report from Black Knight Financial Services shows. According to Black Knight’s “First Look” at April’s mortgage performance data, there were 58,700 foreclosure starts in April 2016, which is the lowest number of foreclosure starts since April 2006. Black Knight’s report showed that foreclosure starts declined by 19.37% from March to April. Foreclosure starts were also down 16.62% from April 2015.
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Have a productive week!


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