April new home sales rose 7.3%

[Update 1: Adds NAHB, Capital Economics quotes.]

Sales of new single-family homes rose 7.3% in April from a month earlier, easily topping most analyst estimates.

The Commerce Department said the seasonally adjusted rate of 323,000 units last month was up from 301,000 for March, which was revised upward slightly. April new home sales were down 23.1% from 420,000 a year earlier.

In February, new home sales fell 17% from the prior month to 250,000, the lowest level ever recorded.

The seasonally adjusted estimate of new homes for sale at the end of last month was 175,000 in February, representing a 6.5-month supply and at the lowest level in decades. A healthy housing market usually carries a six-month supply of single-family homes.

Analysts surveyed by Econoday expected home sales of 300,000 for April with a range of estimates between 285,000 and 320,000. A Briefing.com survey projectedhome sales of 290,000 for the month.

The median sales price of new homes sold in April was $217,900, up 4.6% from March.

Jerry Howard, chief executive officer of the National Association of Home Builders, believes the housing market is still “bouncing along the bottom.”

He said on Fox News Tuesday morning that prices, as well as home sales, can only go up from here.

Capital Economics said April’s increase in sales “may even underestimate the recent rebound since the data exclude condo sales, which are probably performing better than sales of new single-family homes.”

High Gas Prices Trigger Changes in Buyer Behavior

The rise in gas prices is influencing buyer decisions as they shop for a new home, causing more buyers to make short commutes and home offices a top priority, according to a new Coldwell Banker survey of more than 1,000 of its real estate professionals about buyer trends.

Seventy-five percent of the real estate professionals surveyed say the spike in gas prices is influencing their clients’ decisions on where to live. What’s more, if gas prices continue to increase, 93 percent predict that even more buyers will choose to live somewhere closer to their work.

Gas prices are topping $4 a gallon and higher, and are up about 30 percent over last year, which is starting to put a dent in many Americans’ pocketbook.

More real estate professionals also report that the rise in gas prices is prompting more buyers to look for homes that will allow them to work-from-home. Indeed, 77 percent of those surveyed say that more of their buyers are showing an interest in having a home office compared to five years ago.

Gas prices also seem to be spiking a renewed interest in urban living. More than half of real estate professionals surveyed say they are seeing more buyers wanting to target homes in urban areas compared to five years ago, citing shorter commute times, being able to walk to more places, and being near public transportation as the most likely reasons for the urban-area migration.

More buyers are also choosing homes closer to shops and services due to the increase in gas prices, according to the survey.

REO Inventory Reaches All-Time High

Daily Real Estate News  |  May 5, 2011

REO Inventory Reaches All-Time High 
The national inventory of REO properties rose in March to a record high of 2.2 million. Foreclosure starts also increased by 33 percent month-over-month, according to the March Mortgage Monitor report by Lending Processing Services Inc. 

However, it’s not all doom and gloom for the housing market. The report revealed a significant increase in foreclosure sales, which is helping to chip away at the swelling inventories that are battering many markets. 

Also, delinquencies continue to decline, which is a sign of fewer foreclosures brewing in the pipeline. Delinquencies fell more than 11 percent in March from February — the lowest level since 2008 and a nearly 20 percent year-over-year decline, according to Lender Processing Services Inc. The total U.S. loan delinquency rate, which is for loans 30 or more days past due (but not in foreclosure), is 7.78 percent. 

States with the highest percentage of loans where home owners have fallen behind are Florida, Nevada, Mississippi, New Jersey, and Georgia. 

On the other hand, states that boast the lowest percentage of delinquent loans are Montana, Wyoming, Alaska, South Dakota, and North Dakota. 

To search all REO homes on the MLS please visit www.RajQsar.com/search-foreclosures

Source: “Banks Build Record Foreclosure Inventory,” RISMedia (May 5, 2011)

Bailing on Mortgage Not a Good Idea

An estimated 11 million home owners owe more on their mortgage than their property is currently worth. That’s made more home owners consider walking away from their mortgage and home ownership, even those who can still comfortably afford to make their payments (known as “strategic default”). 

Walking away from a mortgage usually results in either a short sale or foreclosure. So what are the consequences of walking away? There may be far more consequences than what most home owners ever considered. 

The consequences include everything from badly affected credit to potential tax consequences and deficiency risks. There are even possible professional implications, Justin McHood with Academy Mortgage in Chandler, Ariz., warns in an article at Zillow.com

Home owners’ credit scores will be badly hit regardless of whether they attempt a short sale or have their property foreclosed on. (See How Missed Mortgage Payments Hurt Credit Scores)

There also could be the potential for deficiency risks when walking away from a home, which largely varies from state to state. (View anti-deficiency laws by state.) In some states, lenders may sue you for the difference between what you owe and what your short-sale or foreclosure proceeds are, McHood notes. 

Home owners considering walking away also should weigh the potential difficulty they may face from moving too. For example, if moving into a rental property, they’ll have to convince a landlord to rent to them after they have the red flag of missed mortgage payments on their credit record. And paying for moving expenses — which many walkaways fail to consider — can quickly add up too. 

Plus, home owners may find professional consequences from walking away from a mortgage, as the number of employers eyeing employees’ credit profiles continues to grow. 

Source: “The Consequence of Walking Away,” Zillow.com (April 27, 2011)