Home Sales Rise to Fastest Pace in Three Years: 

Home resales rose sharply in November to their fastest pace in three years, which is yet another sign the housing market is gaining steam.

The National Association of Realtors said on Thursday that existing home sales climbed 5.9 percent last month to a seasonally adjusted annual rate of 5.04 million units. That was the fastest increase since November 2009, when a federal tax credit for home buyers was due to expire. Sales were well above the median forecast of a 4.87 million-unit rate.

Nationwide, the median price for a home resale was $180,600 in November, up 10.1 percent from a year earlier as fewer people sold their homes under distressed conditions compared to the same period in 2011. Distressed sales include foreclosures.

The nation's inventory of existing homes for sale fell 3.8 percent during the month to 2.03 million, the lowest level since December 2001. At the current pace of sales, inventories would be exhausted in 4.8 months, the lowest rate since September 2005. Distressed sales fell to 22 percent of total sales from 29 percent a year ago.

So, to recap: More people are buying homes and are paying higher prices than they did a year ago.  Plus, there are fewer distressed sales and the inventory of homes available for sale is at the lowest level in 10 years.  This all adds up to a great housing market. 

New Foreclosures Plummet: 

New Foreclosure filings drop 22%.

The housing market is improving, no question. Home prices are rising, interest rates are low, inventory levels have fallen and fewer borrowers are falling behind on their mortgage payments. All of this helped to temporarily put a curb on new foreclosure filings by banks in October (the most recent data published).

Lender Processing Services reported that the decline also has to do with changes in mortgage servicing that went into effect in September under the $25 billion mortgage settlement. Servicers are now required to give borrowers a 14-day notice in writing before referring a loan for foreclosures. Those letters began going out in September.

Another reason for the drop in new foreclosures may be a surge in loan modifications involving principal reduction. These are also mandated by the mortgage servicing settlement. Principal reduction modifications jumped 62 percent from October to November.

Regardless of the reason, the fewer homes on the market at depressed prices, the better it is for the housing market. 

  The New York Times

Factoring in commuting costs

A recent study by the Center for Housing Policy and the Center for Neighborhood Technology suggests that borrowers of moderate means would be smart to calculate the costs of commuting before buying. 
Making sense of the story

• The study, which looked at transportation and housing costs in the 25 largest metropolitan areas, found that transportation costs rose faster than incomes in every area over the last decade.
• That has added to the financial burden shouldered by moderate-income homeowners, defined as households earning 50 to 100 percent of a metropolitan area’s median income.  Transportation consumes 30 percent of their income, on average.  Add housing costs to that and the combined cost burden rises to 72 percent.
• The study also found that some metropolitan areas generally considered more affordable become less so after transportation is figured in.
• Mortgage underwriters sometimes look at a home’s location relative to where the buyer works, but in most cases a long distance between the two is an issue only if it suggests that the buyer isn’t actually going to live in the house.

Pending Home Sales Increase 5.2%:  More good news for housing as an index measuring the number of Americans who signed contracts to buy homes in October jumped to nearly its highest level in almost six years. Steady job gains and record-low mortgage rates have made home buying more attractive. The National Association of Realtors said Thursday that its seasonally adjusted pending home sales index rose 5.2 percentage points to 104.8 in October. Excluding a few months when the index spiked because of a homebuyer tax credit, that is the highest level since March 2007. Signed contracts jumped 15.6% in the Midwest and rose 5.5% in the South. But they fell 1.1% in the West and dipped 0.1% in the Northeast. In a separate report, the Case-Shiller Home Price Index moved upward again as national home prices increased 3%.