Macroeconomic Environment

Mortgage Employment

Source:Bureau of Labor Statistics/MortgageStats.com

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New Home Sales

Source:U.S. Department of Commerce

New Home Sales Crater, Purchase Apps Fall to 17.6%

The housing and mortgage markets were hit with yet another blast of ugly news Wednesday morning with new home sales falling 12.4% in July and the Mortgage Bankers Association reporting that purchase money loans now account for just 17.6% of all new loan applications. The only good news for lenders is that the yield on the 10-year Treasury fell to a new 52-week low, which means mortgage rates likely will fall even further. (See related story below.) According to figures compiled by the U.S Census Bureau, sales of newly constructed single-family homes fell to a seasonally adjusted annual rate of 276,000 in July from a 315,000 rate in June. The May sales rate is the lowest since 1963. The National Association of Home Builders had hoped to see an improvement in sales during July, but the slowing economy, poor job outlook, and expiration of the homebuyer tax credit kept potential buyers on the sidelines. Barclays Capital noted that the decline in July "completely erases June's 12.1% gain and brings new home sales to the lowest level in the history of the series." New home sales fell throughout the nation with the West experiencing the biggest monthly percent decline: -25.4%. The supply of new homes on the market increased to 9.1 months, up from 8 in June. Actual inventory of single-family homes for sale, however, remained unchanged at 210,000. "This was a particularly disappointing report since the effects of the expiration of the first-time homebuyer tax credit should have dissipated by July for this series," Barclays said in a research note.

( August 25, 2010 )

Existing Home Sales

Source:National Association of Realtors

Existing Home Sales Fall to 15-Year Low

Sales of single-family existing homes plummeted 27% in July from the previous month as the expiration of homebuyer tax credit sucked all the oxygen out of the market. The sales reading was the worst in 15 years. "Hopefully this pause will last two to three months and not longer," said National Association of Realtors economist Lawrence Yun. Barclays Capital noted that, "Overall, the July report was notably worse than expectations and shows that the housing market has not yet found a bottom following the end of the stimulus measures." According to figures compiled by NAR, sales fell 7.2% in June and 1.6% in May after the expiration of the tax credit on April 30. NAR said sales of previously owned single-family homes fell to a seasonally adjusted annual rate of 3.37 million in July from a 4.62 million rate in May. Sales of existing condominiums and co-ops fell 28% in July from June. The big drop in sales was expected after RE/MAX reported last week that its sales had dropped 30% in the month of July. Scott Anderson, a senior economist at Wells Fargo & Co., said there could be a "modest recovery" off of the low July sales level. "But I think the trend will be pretty flat at historically low levels probably until next spring," he told National Mortgage News. Given the uncertain economic outlook and expectations that mortgage rates will remain low for sometime, "potential homebuyers will take a wait and see approach," he said, adding that consumers have no sense of urgency to go out and purchase a home. Wells Fargo economists expect house prices could fall 6% nationally between now and the end of 2011. In some metropolitan areas, prices could fall by 5% to 10%, the bank believes.

( August 24, 2010 )

Housing Starts

Source:U.S. Department of Commerce

Single-Family Starts Drop to 14-Month Low

Single-family housing starts fell 4.2% in July to a 14-month low, following a slight downward revision of June figures. The U.S. Census Bureau found that single-family housing starts dropped to a seasonally adjusted annual rate of 432,000 in July from 451,000 in June. May's single-family housing start total was upwardly revised slightly to 459,000. The June rate for multifamily starts in buildings with five units or more was 95,000. Mike Larson, real estate and interest rate analyst at Weiss Research, said in a report that the start figures reflect a market in which builders are not willing or able to ramp up activity due to continuing competition from distressed inventory and foreclosures.

( August 17, 2010 )