Survey: Demand from Current Homeowners Supporting Housing Market

Sept. 28, 2015--Sorohan, Mike msorohan@mba.org.

September 28, 2015


Purchases by current homeowners helped bolster home prices in August, the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey said.  

The report said the market share for current homebuyers surged in the summer while the first-time homebuyer share declined. Current homeowners accounted for 49.3 percent of purchases in August, based on a three-month moving average after hitting a 12-month low of 44.9 percent in March.  

While the first-time home buyer share grew to 38.3% in May--a level not seen since 2010--the report said higher home prices and seasonal patterns combined to push the first-time buyer share down to 36.4 percent in August. The investor share of home purchases also fell, from 18.7 percent in March to 14.4 percent in August.  

"Current homeowner purchases are supporting the housing market," said Tom Popik, research director for Campbell Surveys. "Metrics such as the sales-to-list price ratio show a strong housing market, particularly in western states. Nonetheless, forward-looking commentary from real estate agents may indicate some softening in the future."  

The survey said the sales-to-list price ratio for non-distressed properties declined modestly in August (to 98.3 percent) compared to July (98.5 percent) but remained above a year ago (97.5 percent). All three states on the west coast maintained sales-to-list price ratios above 100 percent in August, led by California at 102.2 percent.  

The average time on market for non-distressed properties continued to decline in August, hitting 7.9 weeks compared to 8.2 weeks the previous month and 8.6 weeks a year ago. Non-distressed properties sold in the Pacific Northwest in August were on the market for an average of 4.5 weeks.  

The survey also noted the proportion of distressed properties started to level off. Real estate owned properties and short sales accounted for 16.6 percent of sales in August compared to 16.8 percent share the previous month. A year ago distressed properties accounted for 21.7 percent of home sales.  

Meanwhile, Black Knight Financial Services, Jacksonville, Fla., released its First Look Mortgage Monitor, reporting the national delinquency rate rose by 2.5 percent in August, while foreclosure starts increased by 7 percent to 80,500.  

On a year over year basis, however, the delinquency rate fell to its lowest rate since May 2011. While it reported nearly 42,000 newly delinquent borrowers in August, total non-current inventory fell by 766,000 since last year. The monthly prepayment rate continued to decline, falling 15 percent from July, but still up 11.5 percent from last summer. And at 696,000, the number of borrowers in active foreclosure fell to its lowest level since November 2007.  

Black Knight said all 50 states saw improvement in its non-current inventory over the past six months, from Wyoming's 0.7 percent improvement to Florida's nearly 18 percent reduction. Mississippi still leads the nation in both total non-current inventory and the highest share of seriously delinquent loans.  

Other report highlights:

--The total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure) rose to 4.83 percent, a month-over-month change of 2.47 percent but a year over year change of -18.22 percent.

--Total U.S. foreclosure pre-sale inventory rate fell to 1.37 percent, a month-over-month change of -2.17 percent and a year-over-year change of -23.74 percent.

--Total U.S. foreclosure starts rose by 80,500, a month over month change of 6.76 percent but a year-over-year change of -1.35 percent.

--The monthly Prepayment Rate fell to 1.07 percent, a month-over-month change of -15.11 percent but a year-over-year change of 11.47 percent. --Properties 30 or more days past due, but not in foreclosure totaled 2.447 million, a month over month increase of 58,000 but a year over year drop of 548,000.

--Properties 90 or more days past due, but not in foreclosure totaled 865,000, a month over month drop of 21,000 and a year over year drop of 278,000.

--Properties in foreclosure pre-sale inventory totaled 696,000, a month over month drop of 15,000 and a year over year decrease of 217,000.

--Properties 30 or more days past due or in foreclosure totaled 3.142 million, a month over month gain of 42,000 but a year over year drop of 766,000.

--States with the highest percentage of non-current loans were Mississippi (12.95 percent, New Jersey (10.16 percent), Louisiana (10.12 percent), Maine (9.04 percent) and New York (8.92 percent).

--States with the lowest percentage of non-current loans were North Dakota (2.11 percent), Colorado (2.98 percent), Minnesota (3.20 percent), South Dakota (3.37 percent) and Montana (3.45 percent).  

This Week:

--Monday: PCE Deflator, Bureau of Economic Analysis; Personal Income, Bureau of Economic Analysis; Pending Home Sales, National Association of Realtors; Dallas Fed Manufacturing Survey

--Tuesday: Consumer Confidence, The Conference Board; Dallas Fed Texas Retail Outlook Survey

--Wednesday: MBA Weekly Applications Survey; ADP National Employment Report; Chicago Purchasing Managers Index; Beige Book, Federal Reserve

--Thursday: MBA Mortgage Action Alliance Quarterly Advocacy Update, online; Initial Claims, Labor Department; Construction, Census Bureau; Institute for Supply Management Manufacturing Index

--Friday: Employment Situation, Labor Department; Manufacturer Shipments, Inventories and Orders, Census Bureau

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