Pending Sales of Existing Homes in U.S. Decline for Eighth Month

 

Contracts to purchase previously owned U.S. homes unexpectedly fell in February for an eighth straight month, a sign of further weakness in the industry.

The index of pending home sales decreased 0.8 percent after a 0.2 percent drop the prior month that was previously reported as a gain, figures from the National Association of Realtors showed today in Washington. The median forecast of 39 economists surveyed by Bloomberg called for a 0.2 percent rise.

Colder-than-normal weather probably played a role in discouraging prospective buyers faced with rising mortgage rates, higher prices and limited supply of cheaper properties. At the same time, the Realtors group said buyer traffic is stabilizing, which may help spur demand as temperatures warm.

“For housing, it’s been primarily an issue of bad weather,” Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, said before the report. “Not a lot of buyers were enticed to go out and look, and not a lot of sellers put their best foot forward” in terms of staging the property or hosting an open house. “Conditions will improve as the weather improves,” he said.

Estimates in the Bloomberg survey ranged from a drop of 3 percent to a gain of 4 percent after a previously reported increase of 0.1 percent. The index fell to 93.9, the lowest since October 2011.

Two of four regions -- the South and Northeast -- saw a decrease from the previous month, today’s report showed.

Contract signings decreased 10.2 percent from a year earlier on an unadjusted basis, the most since April 2011, after a 9.3 percent drop in the prior 12-month period.

Leading Indicator

Economists consider pending home sales a leading indicator because they track contract signings. Existing home sales are tabulated when a contract closes, typically a month or two later.

“Buyer traffic information from our monthly Realtor survey shows a modest turnaround, and some weather-delayed transactions should close in the spring,” Lawrence Yun, NAR’s chief economist, said in a statement.

The weather also was a restraining factor in other parts of the housing market, recent reports showed.

Purchases of new homes fell in February to the lowest level in five months, according to Commerce Department data. Sales of previously owned properties declined last month to the lowest level since July 2012, the National Association of Realtors reported. The National Association of Home Builders/Wells Fargo index of builder confidence rose less than forecast in March.

Lennar Upbeat

Companies such as Lennar Corp. (LEN:US), the biggest homebuilder by market value, are optimistic about demand once the weather improves.

“In the first quarter, we have seen clear signs that volume is returning to the market even as severe weather made conditions difficult,” Stuart Miller, Lennar’s chief executive officer, said on a conference call on March 20. “The fundamental drivers of improvement in the housing market remain a steadily improving economy with a slowly improving employment picture unlocking pent-up demand.”

At the same time, an increase in borrowing costs and higher property values has curtailed some home buyers.

The 30-year fixed mortgage rate averaged 4.32 percent in the week ended March 20, up from 3.54 percent around the same time a year ago, according to McLean, Virginia-based Freddie Mac. The S&P/Case-Shiller index of home prices in 20 cities climbed 13.2 percent from January 2013. Still, it was the smallest gain since August, indicating cooling prices may bring relief to buyers. 

Article curated from Bloomberg Business Week

Sales of New U.S. Homes Fell in February to Five-Month Low

Purchases of new homes in the U.S. fell in February to the lowest level in five months, a sign the industry may take time to pick up after inclement weather damped demand earlier in the year.
 

Sales declined 3.3 percent to a 440,000 annualized pace, following a 455,000 rate in the prior month that was the strongest in a year, figures from the Commerce Department showed today in Washington. The median forecast of 77 economists surveyed by Bloomberg called for 445,000.

Unusually frigid temperatures added to restraints including rising mortgage rates, higher property values, and a lack of supply that kept prospective buyers away from the market for new and existing properties. Bigger gains in employment and consumer sentiment would help spur the recovery in homebuilding, sustaining its contribution to economic growth and boosting earnings at companies such as Lennar Corp. and KB Home. 

“There’s a big upside to new-home sales,” said Robert Dye, chief economist at Comerica Inc. in Dallas, who correctly projected the drop in sales last month. “We have a huge amount of pent-up demand and very tight inventories. Mortgage rates, although they’ve risen, are still very low. We expect to see continuing improvement in the housing market.”

Economists’ estimates ranged from 406,000 to 506,000. The reading for the prior month was revised down from a previously reported 468,000.

Slower Appreciation

Another report today showed prices of home resales climbed at a slower pace in the year through January than a month earlier, indicating momentum in property-value appreciation is cooling.

The S&P/Case-Shiller index of 20 cities increased 13.2 percent from January 2013, the smallest gain since August, after rising 13.4 percent in the 12 months through December. The median projection of 30 economists surveyed by Bloomberg called for a 13.3 percent advance. Compared with the prior month, prices rose 0.8 percent.

Also today, another report showed consumer confidence unexpectedly jumped in March to the highest level in six years. The Conference Board’s sentiment index rose to 82.3 in March, the highest since January 2008, from 78.3 a month earlier, the New York-based private research group said.

The median forecast in a Bloomberg survey of 76 economists called for a reading of 78.5 this month. Estimates ranged from 75 to 80.

Shares Climb

Stocks held earlier gains after the reports. The Standard & Poor’s 500 Index increased 0.6 percent to 1,868.76 at 10:23 a.m. in New York.

The median sales price of a new house decreased 1.2 percent from February 2013, to reach $261,800, according to today’s Commerce Department report. It was the biggest year-to-year decline since June 2012. The median can be affected by the mix of sales by region as prices are generally higher in the Northeast and West where demand declined.

Purchases (NHSLTOT) dropped in three of the four regions, led by a 32.4 percent slump in the Northeast. The West decreased 15.9 percent and the South fell 1.5 percent. Demand in the Midwest jumped 36.7 percent to the highest level since May 2013, after dropping almost 20 percent the prior month.

More Supply

The supply of homes at the current sales rate climbed to 5.2 months from 5 months in the prior month. There were 189,000 new houses on the market at the end of February, the most since December 2010.

New-home sales, which accounted for about 8 percent of the residential market in 2013, are tabulated when contracts are signed, making them a timelier barometer than purchases of previously owned dwellings. Sales of existing homes are tabulated when a deal closes, typically a month or two later.

The weather depressed parts of the housing market, recent reports showed. Sales of previously owned properties declined in February to the lowest level since July 2012, according to data from the National Association of Realtors. The National Association of Home Builders/Wells Fargo index of builder confidence rose less than forecast in March.

Warmer temperatures may revive construction and help bring more buyers out in coming months.

The recent weakness is “a temporary pause,” and the homebuilding industry is still in the early stages of recovery, Ara Hovnanian, chief executive officer of Hovnanian Enterprises Inc., New Jersey’s largest homebuilder, said in a statement on March 5.

Growing Profits

Lennar, the biggest U.S. homebuilder by market value, last week reported a fiscal first-quarter profit that beat analysts’ estimates as it sold more homes at higher prices.

“The housing-market recovery continues as we begin to enter the more vibrant seasonal months of the year,” Chief Executive Officer Stuart Miller said on a March 20 conference call with analysts. “The fundamental drivers of improvement in the housing market remain a steadily improving economy with a slowly improving employment picture unlocking pent-up demand, while supplies remain constrained to meet that demand.”

Los Angeles-based KB Home also reported fiscal first-quarter earnings that beat estimates as it raised prices and opened communities in high-cost, land-constrained markets, such as parts of California.

Rising borrowing costs have limited affordability. The average 30-year, fixed-rate mortgage rate was 4.32 percent in the week ended March 20, up from 3.54 percent a year earlier, according to Freddie Mac in McLean, Virginia.

Federal Reserve policy makers last week gave themselves room to keep borrowing costs low at least until next year by dropping a link between the benchmark interest rate and a specific level of unemployment. The central bank also reduced the monthly pace of bond purchases by $10 billion, to $55 billion.

Household formation would ultimately generate new construction, Fed Chair Janet Yellen said during a news conference after the policy meeting. 

Article curated from Bloomberg

Constellation Web Solutions MLS Coverage Expansion

Constellation Web Solutions now runs over 85% of all MLS listings in the US and we've recently added 4 new MLS's including Greater Greenville Association of Realtors (SC), Traverse Area Association of Realtors (MI), Park City Board of Realtors (UT) and the Arkansas Regional MLS.  See the complete list below...

Constellation Web Solutions MLS Coverage List

Alabama

Birmingham Board of Realtors

Huntsville Area Association of Realtors

North Alabama Multiple Listing Service, Inc.

Arizona

Arizona Regional MLS (ARMLS)

Tucson Association of REALTORS®

Arkansas

Arkansas Regional MLS (coming March 2014!)

Cooperative Arkansas REALTORS® MLS (CARMLS)

Little Rock Realtors® Association

California

Bakersfield MLS

Bay Area Real Estate Information Services (BAREIS)

Bay East Association of REALTORS® (MAXMLS)

Calaveras County Association of REALTORS® (CCAR)

California Desert Area Association of REALTORS®

California Regional MLS

CARETS Regional Data Share

Central Coast Regional MLS

Combined L.A. Westside (CLAW)

Conejo Valley Association of Realtors

Contra Costa Association of REALTORS®

CRISNET MLS (Southland Regional)

East Bay Regional Data Share

Fresno Association of REALTORS®

iTech MLS (Pasadena-Foothills & Glendale)

Greater Antelope Valley Association of REALTORS®

Kings County Board of REALTORS®

MetroList Services

MLSListings

Multi-Regional Multiple Listing Service (MRMLS)

Paradise Association of Realtors

Pasadena Foothills Association of Realtors

San Francisco Multiple Listing Service

SANDICOR

Santa Barbara Association of REALTORS®

Shasta Association of REALTORS®

Silicon Valley Association of Realtors

Southern California MLS (SOCAL) – Now known as CRMLS

Sutter-Yuba Association of REALTORS®

Tehama County Association of Realtors

Tulare County MLS

Tuolumne County Association of REALTORS®

Ventura County Regional Data Share

Colorado

Grand Junction Area Realtor® Association

Information and Real Estate Services (IRES)

Metrolist MLS

Pueblo Association of REALTORS®

Pikes Peak MLS

Connecticut

Connecticut Statewide MLS

Greenwich MLS

Greater Fairfield County MLS

Florida

Brevard County MLS (Space Coast MLS)

Daytona Beach Area Association of REALTORS®

Emerald Coast MLS

Beaches MLS (Formerly part of RMLS of FL)

Gainesville Alachua County Association of Realtors

Greater Tampa Association of Realtors

Hernando County Association of REALTORS Inc.

My Florida Regional MLS

Naples Board of REALTORS® (Now under SouthWest FL MLS)

Navarre Area Board of Realtors®

Northeast Florida MLS

Ocala Marion County Association of Realtors

Pensacola Association of REALTORS®

REALTOR® Association of Greater Fort Myers and the Beach (Now under SouthWest FL MLS)

REALTOR® Association of Greater Fort Lauderdale

South FL MLS (Formerly part of RMLS of FL)

SouthEast FL MLS (Formerly known as Miami MLS, Greater Miami and the Beaches, and South Broward)

Tallahassee Board of REALTORS®

Georgia

Athens Area Association of Realtors

Brunswick Glynn County Board of Realtors

Central Georgia MLS

Georgia MLS

Lake Country Board of Realtors

Middle Georgia Association of Realtors

Northeast Georgia MLS

Savannah Board of Realtors

Hawaii

HiCentral MLS

Idaho

Intermountain MLS

Illinois

Capitol Area Association of Realtors

Midwest Real Estate Data (MRED)

Peoria Area Association of REALTORS®

Rockford Area Association of Realtors

Southwestern IL MLS

Quad City MLS (QUAD)

Indiana

Evansville Area Association of Realtors

Knox County Board of Realtors

Lafayette Regional Association of Realtors

Metropolitan Indianapolis Association of REALTORS® (MIBOR)

Northeastern Indiana (NEIAOR)

Richmond Association of Realtors

Southern Indiana Realtors Association

Iowa

Des Moines Area Association of Realtors

Quad City MLS (QUAD)

Kansas

Kansas City Regional Association of Realtors (Heartland MLS)

Wichita Area Association of Realtors

Kentucky

Heart of Kentucky Association of Realtors

Henderson Audubon Association of Realtors

Greater Louisville Association of Realtors

Lexington-Bluegrass Area Board of REALTORS®

Louisiana

Bayou Board of Realtors

Greater Baton Rouge MLS

New Orleans Metro Association of Realtors (GSREIN)

Realtor Association of Acadania (Lafayette MLS)

Maine

Maine Real Estate Information System

Maryland

Metropolitan Regional Information Systems(MRIS)

Massachusetts

Cape Cod and Islands MLS – CCIMLS

MLS Property Information Network (MLSPIN)

Michigan

Detroit Association of Realtors

Grand Rapids Association of REALTORS®

Jackson Area Association of Realtors

Metropolitan Consolidated Association of Realtors (Southeastern Michigan)

Monroe County Association of Realtors

MiRealSource

RealComp II

Southwestern Michigan Regional Information Center (SWMRIC)

Traverse Area Association of Realtors (coming March 2014!)

Minnesota

Regional MLS (Northstar MLS)

Southeast Minnesota Association of REALTORS®

Mississippi

Mississippi Gulf Coast MLS

Missouri

Mid America Regional Information Systems (MARIS)

Nevada

Greater Las Vegas Association of REALTORS® (GLVAR)

Northern Nevada Regional MLS

New Hampshire

Northern New England Real Estate Network (NNEREN)

New Jersey

Cape May County Association of Realtors

Garden State MLS (GSMLS)

Middlesex County MLS

Monmouth/Ocean MLS – MOMLS

Ocean County Board of Realtors (Jersey Shore MLS)

New Jersey MLS

South Jersey Shore Regional MLS

New Mexico

Santa Fe Association of REALTORS®

Southwest MLS (SWMLS)

New York

Capital Regional MLS – Albany (GCAR)

Buffalo Niagara NY MLS

Chautauqua County Board of Realtors

Elmira Corning Regional Board of Realtors

Greater Binghamton Association of Realtors

Greater Hudson Valley MLS

Greater Syracuse Association of Realtors

Greater Utica-Rome Board of Realtors

Hudson Gateway MLS (Empire Access MLS)

Ithaca Board of Realtors

Jefferson-Lewis Board of Realtors

Mid-Hudson MLS

MLS of Long Island (MLSLI)

Otsego-Delaware Board of Realtors

Rochester Association of Realtors

Warren County Association of Realtors

North Carolina

Burlington-Alamance County Association Of Realtors

Albemarle Area Assoc. of REALTORS

Western NC Regional MLS, LLC

Brunswick County Association of Realtors

Catawba Valley Association of Realtors

Carolina MLS

Fayetteville Association of REALTORS®

Goldsboro-Wayne County Association of REALTORS

Greenville Pitt Association of Realtors

High Point Regional Association of Realtors

Jacksonville Board of REALTORS®

Neuse River Region Association of REALTORS, Inc

Outer Banks Association of Realtors

Pinehurst-Southern Pines Area association of REALTORS®

Roanoke Valley Lake Gaston Board Realtors

Topsail Island Association of Realtors

Triad MLS

Triangle MLS

Western North Carolina Regional MLS

Wilmington Regional Association of Realtors

Ohio

Ashland Board of Realtors

Cincinnati Area Board of REALTORS®

Columbus Board of REALTORS®

Dayton Area Board of Realtors (DABR)

Firelands Association of Realtors

Mansfield Board of Realtors

NORMLS

Toledo Board of REALTORS (NORIS)

Oklahoma

Norman Oklahoma MLS

Oklahoma City Metro MLS

Oregon

Central Oregon Association of Realtors

Klamath County Association of Realtors

Regional MLS of Oregon

Pennsylvania

Allegheny Highland Association of Realtors

Allegheny Valley Board of Realtors

Cambria Somerset Association of Realtors

Greater Erie Board of Realtors

Greater Harrisburg Association of Realtors

Lancaster County Association of Realtors

Greater Meadville Board of Realtors

Pike/Wayne Association of Realtors

Greater Philadelphia Association of Realtors

Realtors® Association Of Metropolitan Pittsburgh

Realtor's Association of York & Adams Counties

Trend MLS

Rhode Island

Statewide MLS

South Carolina

Aiken Board of Realtors

Beaufort County Association of Realtors

Consolidated Multiple Listing Service

Charleston Trident Association of Realtors

Coastal Carolinas Association of Realtors (CCAR)

Consolidated MLS of South Carolina

Greater Greenville Association of Realtors (coming March 2014!)

Pee Dee Realtor Association

Piedmont Regional Association of Realtors

South Dakota

Black Hill Board of Realtors

Tennessee

Greater Chattanooga Association of REALTORS®

Knoxville Area Association of REALTORS®

Memphis Area Association of REALTORS®

REALTRACS

Texas

Austin Board of Realtors (ACTRIS MLS)

Beaumont Board of Realtors

Brazoria County Board of Realtors

Bryan College Station Regional Association of Realtors

Fort Hood Area Association of Realtors

Highland Lakes Association of Realtors

Houston Association of Realtors

Kerrville Board of Realtors

Port Neches, Port Arthur & Nederland Board of Realtors

North Texas Real Estate Information Systems (NTREIS)

Orange County Board of Realtors

San Antonio Board of Realtors

San Antonio Board of Realtors (SABOR)

Tyler County Board of Realtors

Utah

Park City Board of REALTORS® (coming March 2014!)

Washington County Board of REALTORS®

Vermont

Northern New England Real Estate Network (NNEREN)

Virginia

Greater Augusta Association of Realtors

Central Virginia Regional MLS

Charlottesville Area Association of REALTORS

Lynchburg Association of Realtors

Real Estate Information Network (REIN)

Roanoke Valley Association of Realtors

Washington

Northwest Multiple Listing Service (NWMLS)

Tri-City Association of REALTORS®

Washington State Commercial Association of Realtors

Washington, DC

Metropolitan Regional Information Systems (MRIS)

West Virginia

Weirton Board of Realtors

Wheeling Board of Realtors

Metropolitan Regional Information Systems (MRIS)

Wisconsin

Central Wisconsin Board of REALTORS® & Central Wisconsin MLS

Greater Milwaukee Association of Realtors (Metro MLS)

Realtors® Association of Northeast Wisconsin

Realtors® Association of South Central Wisconsin