Both Pending and Existing Home Sales Beat Forecasts:

U.S. home buyers signed more contracts to buy existing homes in March, as weather in much of the country warmed and as more listings came onto the market. An index of so-called "pending" home sales from the National Association of Realtors rose 3.4 percent from February, the first gain in nine months.

"After a dismal winter, more buyers got an opportunity to look at homes last month and are beginning to make contract offers," Lawrence Yun, chief economist for the Realtors. "Sales activity is expected to steadily pick up as more inventory reaches the market, and from ongoing job creation in the economy."

The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

In a separate report last week, The National Association of Realtors said on Tuesday Existing Home Sales came in at an annualized rate of 4.59 million units, the market forecasts were only expecting a reading of 4.55 million units.

So, we have two reports that show the housing market slowly moving forward despite higher home prices and tighter credit which is a good sign for the Spring season. 

U.S. Housing Starts Climb in March:

The Commerce Department reported that groundbreaking increased 2.8 percent to a seasonally adjusted annual rate of 946,000.

Plus, February's data was actually better than first released. As February's starts were revised to show a 1.9 percent rise rather than the previously reported 0.2 percent fall.

Gaines in home building has been difficult as a brutally cold winter weighed on home building in December and January.  Activity has also been hampered by shortages of building lots and skilled labor as well as rising prices for materials.

Groundbreaking for single-family homes, the largest segment of the market, surged 6.0 percent to a 635,000-unit pace last month. Starts for the volatile multi-family homes segment fell 3.1 percent to a 311,000-unit rate. 

Survey: Consumer Confidence in Housing Hot This Spring

DAILY REAL ESTATE NEWS | TUESDAY, APRIL 08, 2014

Consumer attitudes are reflecting greater optimism in the housing market heading into real estate's traditionally strong spring selling season, according to Fannie Mae's March 2014 National Housing Survey.

In the poll of 1,000 people, 38 percent say it's a good time to sell a home, up from 26 percent a year ago. The poll also shows that 69 percent of those surveyed say it's a good time to buy, and 52 percent say it's easier today to get financing for a home.

Americans also feel more confident about their personal finances: An all-time survey high of 40 percent say their personal financial situation has improved during the past year.

"The housing recovery continues to proceed in fits and starts," says Doug Duncan, Fannie Mae’s chief economist. "Rising mortgage rates and a lack of supply have dampened housing market momentum. However, we see several positive signs going into this year's spring home-buying season, compared with last year. For example, consumers are less pessimistic about their personal finances and more optimistic about the current selling environment and their ability to get a mortgage. Still, those who are pessimistic about buying or selling a home today tend to point to economic conditions as the primary issue, and most consumers continue to say the economy is on the wrong track. Looking forward, we expect to see a pickup in economic growth later in the year, and this may boost the confidence of prospective buyers and sellers."

However, consumers' home-price expectations softened a bit in the latest survey. The average 12-month home-price-change expectation fell from last month, reaching 2.7 percent, the survey shows. Also, slightly fewer respondents — 48 percent — said they thought home prices would rise in the next 12 months.

Source: Fannie Mae

Internet Traffic Points to Strong Spring:

Visits to real estate sites from desktop computers surged 15 percent in March compared to the month before, indicating the spring homebuying season has gotten off to a hot start.

Consumers recorded about 362 million visits to real estate sites from desktop computers last month, a good chunk more than February’s 316 million visitors, according to Experian Marketing Services.

Zillow maintained its sizable Web market lead in the real estate category in March — capturing 16.46 percent of visits to real estate sites from desktop computers for the month, according to Experian, which measures total hits and not unique site visitors.

Zillow’s two chief competitors — Trulia, with 8.91 percent market share, and realtor.com, with 7.49 percent market share — closed in slightly on Zillow’s lead over the course of the month. Compared to their February positions, Trulia and realtor.com closed their gaps with Zillow by 0.32 percentage points and 0.3 percentage points, respectively, for the month.

By capturing 0.86 percent of March’s real estate traffic from desktop computers, Re/Max jumped to No. 18, joining Century 21 Real Estate — which ranked No. 16 with 0.99 percent Web market share in March — as the only other real estate franchisor website in the top 20. 

Fannie Extends Closing Cost Incentive to Buyers

Due to strong buyer response, Fannie Mae has announced it will extend the deadline for an incentive program that allows home buyers to receive up to 3.5 percent in closing cost assistance on purchases of its HomePath foreclosed properties.

Home buyers now have until April 30 to submit offers on the REO homes, and transactions must close by June 30 to be eligible. Originally, the incentive applied for offers submitted by March 31 and transactions that closed before May 31.

The incentive offers qualified buyers up to 3.5 percent of the final sales price to pay closing costs. In some cases, buyers may opt to use the savings to buy down their interest rate through upfront points, Fannie Mae notes.

The incentive, offered in 27 states, is part of Fannie Mae HomePath’s FirstLook program, which offers potential owner-occupants or public entity buyers the first 20 days after a property is listed for sale to submit offers without facing competition from investors.

“We have received a strong response from the incentive since it went into effect on February 14, and we are happy to extend the offer to even more home buyers,” says Jay Ryan, vice president of REO sales. “With the unusually cold and extended winter season ending, we want to give people more opportunity to use the incentive to buy properties that they will call home.”

The states eligible for the homebuyer incentives are: Arizona, Maryland, New Mexico, California, Massachusetts, Ohio, Florida, Michigan, Oregon, Idaho, Minnesota, Puerto Rico, Illinois, Missouri, Tennessee, Indiana, Nebraska, Virginia, Iowa, Nevada, Washington, Kansas, New Hampshire, West Virginia, Maine, New Jersey, and Wisconsin.

DAILY REAL ESTATE NEWS | FRIDAY, MARCH 28, 2014

First-Time Buyers Show Interest; Face Tough Market

Source: DSNews Author: Colin Robins

More than 4 million first-time buyers want to enter the market, but they face some tough issues as market conditions aren’t exactly favorable to new buyers. This conclusion came from the Zillow Housing Confidence Index (ZHCI), a new calculation released by Zillow and Pulsenomics. The ZHCI is a measure of consumer sentiment; anything over 50 indicates a positive sentiment. The current national index is 63.7. Of the 20 metros surveyed, 11 had individual confidence levels above the national average.

In 19 of the 20 large metros surveyed, more than 5.0 percent indicated they wanted to buy a home in the next year. The report notes, "Among current renters, homeownership aspirations were particularly strong, with about 10 percent of all renters nationwide saying they would like to buy within the next 12 months." A vast majority of respondents said they were "confident or somewhat confident" they could afford a home in 2014. If every respondent who indicated they wanted to buy a home actually purchased one, first-time home sales would total more than 4.2 million for 2014, more than double the roughly 2.1 million first-time buyers in 2013.

 While this optimistic total from Zillow suggests interest is high, actually purchasing a home should prove to be a challenge in the upcoming year. Market conditions are mixed: inventory, up 11 percent from a year ago, is still well below optimal levels, and has fallen year-over-year in 8 of 20 metros measured by the ZHCI. Mortgage rates, once a record low 3.3 percent in 2013, have risen to 4.2 percent, according to the Zillow Mortgage Marketplace. A dearth of inventory coupled with rising mortgage rates could push homes out of a homebuyer's price range, particularly for first-time buyers. "For the housing market to continue its recovery, it is critical that homes are both available and remain affordable to meet the strong demand these survey results are predicting, particularly from first-time homebuyers," said Zillow Chief Economist, Dr. Stan Humphries. "Even after a wrenching housing recession, this data shows that the dream of homeownership remains very much alive and well, even in those areas that were hardest hit."

He added, "But these aspirations must also contend with the current reality, and in many areas, conditions remain difficult for buyers. The market is moving toward more balance between buyers and sellers, but it is a slow and uneven process." Areas indicated by the ZHCI with the highest interest in purchasing a new home come from metros that were hit hardest by the housing recession: Miami (67.5), Atlanta (62.9), and Las Vegas (64.1). Each were near or above the national index of 63.7 for "Overall Housing Confidence.

Why Education Will Keep Housing Crisis at Bay

Arming today’s youth with greater financial knowledge is the key to making sure there is no repeat of the housing and economic crisis, Richard Cordray, director of the Consumer Financial Protection Bureau, said at a meeting Monday of the President’s Advisory Council for Financial Capability for Young Americans. “Now more than ever, as we emerge from the deepest financial and economic crisis of our lifetimes, people need the know-how to manage the ways and means of their lives,” Cordray said. “The choices they face in the financial marketplace, with instruments like mortgages, credit cards, auto loans, student loans, credit reporting, and more, are increasingly complex.” Cordray said that childhood education is crucial to shaping housing’s future and should include: Financial education: Cordray said that financial education needs to begin at a young age, with the benefits of compound interest being taught in math classes; economic costs and risks in social studies classes; and overall curriculum involving how to use and protect money. Experimental learning: Cordray said that financial management should be practiced through experimental learning, whether that’s through simulating a banking experience or a computer game that teaches financial skills. Integration into standardized tests: Financial education concepts should be integrated into standardized tests, which would then make it more of an incentive for more teachers to teach such concepts, Cordray said. Parent involvement: “Parents help set expectations, and research has shown that if parents engage their children by establishing a savings account for them, these children are seven times more likely to attend college than those without a savings account,” Cordray said. Source: “5 Ways Children Hold the Key to Housing’s Future,” HousingWire (March 10, 2014