Despite the lowest mortgage rates in a lifetime, the percentage of homes purchased with cash nearly doubled between 2006 and 2011, going from 22% to 40%.  However as we see in our data feature this week, courtesy of Housing IntelligencePro, that phenomenon looks to have finally peaked last year, as in 2012 it has edged down to 38%.  With lending standards still tight but slightly more flexible than in the worst of the housing downturn, with more non-investor home buyers returning to the market, with almost-unbelievably low mortgage rates being further pressured downward by Federal Reserve monetary policy, and with rising existing home prices beginning to broaden the scope of potential housing market participants by incrementally revitalizing formerly-underwater homeowners, the number of homebuyers getting a mortgage increased 9% in the first half of 2012 over the year prior while cash buying was flat.  If the housing market can build on its slow but steady progress, the trend of more traditional home buyers returning to the market should continue.

Now that our latest Home Building Outlook Report is available, we thought we’d give a preview of what we see as the strongest home building markets in 2013.  The outlook ranking of these markets is based upon expectations of increase in new home sales combined with a measure of economic health that takes into account a variety of factors.  As a result, Salt Lake City comes in first place for next year, with expectations of 12% growth in new home sales and a very high rating in market health.  We re-rank the top 100 markets for the year ahead every quarter, as well as provide our subscribers with a data file containing statistics for all 940 MSAs across the country.  A subscription to the Home Building Outlook provides a truly massive amount of data and analysis, and single issue purchase is also available.  Click here for more information and a sample excerpt.

Lackluster June figures for new and existing home sales have prompted lots of speculation over whether the housing recovery is just another head fake.  New home sales declined by over 8% according to the Census, Existing Home Sales were off more than 5% according to the National Association of Realtors.  Our comprehensive closing data from Housing IntelligencePro tells a similar story of shrinking volumes in recent months.  Our preliminary June figures show that home closings of all types are likely to show a decline by as much as 9% from the same month a year ago.  So is the housing market recovery derailed?  Luckily, volume does not tell the full story here.

It’s not just the weather that’s nice in Florida, the housing market climate is feeling much better too.   In looking at median prices of all home sales (resale and new combined) in MSAs with at least 2,000 closings during the first month of the year, the top 5 markets were all in the state of Florida.  The sunshine state was one of the hardest hit in the housing downturn, but that looks to be changing thanks to gradually improving economic conditions and strong investor demand.  Our data feature this week, courtesy of Housing IntelligencePro, shows these top 5 areas with the percentage increase in median home closing price in the first quarter of 2012 compared to the same time a year ago.  Cape Coral-Ft Myers leads the pack with a gain of 27% followed by Orlando with 22%.  While prices are still off peak levels seen during the boom, the early gains this year are an encouraging sign that the housing market, at least in Florida, is turning the corner.

Change is in the air when it comes to housing markets across the country.  Some are definitely doing better than others, and it’s never been more vital to stay informed on the direction of your local housing market.  We have two exciting ways to stay up to date on the latest data and insight.  First, our Builder Local Housing Seminars offer a chance to see in depth information and analysis you just can’t get anywhere else.  Coming up on April 24th we’ll be in Philadelphia, followed by Bethesda, Maryland on April 26th.  Then it’s on to Southern California on May 8th, Phoenix on May 9th, Raleigh on June 12th and Tampa, Florida on June 14th.  There’s no better way to get up to date than hearing our housing data experts and panelists in person at one of these events.  Click here for more information.

Secondly, we’ve just finished the April edition of our Home Building Outlook which provides insight and rankings for the Top 100 markets across the country and detailed backup data on 940 metropolitan areas.  The backup data is easily accessible in an Excel document so you can use it for analysis or presentations.  Click here for more information on our Home Building Outlook data package.  

The national housing data this past week from the Census and NAR was a bit of a wet blanket on what was thought to be an improving market.  With the exception of price increases in both the new and existing home markets and a rise in building permit activity, housing data released this last week was generally negative.  In February, we saw home sales in both the new and existing home markets decline while residential construction activity fell due to a sharp drop in single-family activity.  However, these figures do rely on some amount of sampling and seasonal adjustment that has the potential to provide false direction.  Our data feature this week, courtesy of Housing IntelligencePro, examines the pace of actual, closed new home transactions in January and February.  Based upon data we’ve received so far, the first two months of 2012 look to be outperforming in terms of volume compared to 2011, and even though March isn’t even over yet, the initial stream of transactions looks positive as well.  The year-over-year trend has been consistently improving and despite some of the short-term hiccups, we expect new home volumes to continue to stabilize and maintain a year-over-year improvement.  The median price of a closed new home has also remained fairly flat over the last year, further suggesting a floor in both price and volume has solidified.  While we won’t see explosive improvement from here, we are optimistic about incremental sustainable gains going forward.