Housing Market Index at Highest Since Q1 2008

The National Association of Home Builders released their 55+ Housing Market Index yesterday, and CF Funding is pleased to share that the Q1 2014 rating is now at its highest level since 2008. The 55+ HMI has now seen improvements for 10 consecutive months year-over-year. According to Steve Bomberger, chairman of the 50+ Housing Council, “Rising house prices and low interest rates are helping baby boomers sell their existing homes at a favorable price and in turn, purchase a new home more suited to their current lifestyles.” As CF Funding has mentioned previously on their blog, rising equity and low rates have also allowed many 55+ homeowners to buy second homes or remodel.

The Housing Market Index measures builder sentiment in regards to current sales, prospective buyer traffic, and anticipated six-month sales for both the single-family home market and multifamily condominiums. The results are measured on a scale of 1-100, so a result above 50 means more builders than not view conditions as “good” or traffic as “high.” This quarter, present sales rose 6 points (year-over-year) to reach 52. Expected sales for the next six months rose by 9 points (year-over-year) to reach 62. Traffic of prospective buyers remained the same from the previous quarter and year-over-year at 41.

The multifamily condo HMI rose one point to reach 39, which is the highest first-quarter reading in the 55+ HMI’s history. In Q4 2008 the multifamily condo HMI was as low as 12, and the all-time low was reached in Q2 2010 at a score of 7. Present Sales in multifamily condos saw a year-over-year increase of 4, and sales expected in the next 6 months saw a year-over-year increase of 5. Unfortunately, traffic of prospective buyers decreased year-over-year by -6, however, this quarter held steady with Q4 2013’s score of 32.

Multifamily rental indices saw a slight decrease in present production to reach 42 this quarter. Future demand increased one point to reach 59. CF Funding agrees with NAHB Chief Economist David Crowe’s statement that “The 55+ segment of the housing market is stronger now than it was a year ago… but there are still some headwinds hampering a stronger recovery.” Crowe also stated in a press release that “builders in many markets are facing tight credit conditions and lack of lots and labor.” CF Funding would like to remind those who are looking to refinance or remodel that credit guidelines have changed and those who were previously not eligible may qualify for a new mortgage or construction loan. Contact the lender today at (888)344-4080 for more information.

Leading Markets Index Shows Housing Market Improvement

The National Association of Home Builders released their Leading Markets Index (LMI) yesterday, revealing that “recovery continues to spread” as 59 metro markets nationwide returned to (or exceeded) their normal levels of housing activity. CF Funding is happy to share that the nationwide average is at 88 percent of normal economic and housing activity, based on current permit, price, and employment data. As CF Funding mentioned yesterday in the lender’s daily news feed, consumer attitudes are increasing per the Fannie Mae National Housing Survey, and 68 percent of respondents said it is a good time to buy a home. The LMI confirms these consumer attitudes to be true, as the market continues to recover.

According to the NAHB, 28 percent of metro areas (out of 350 nationwide) saw their score rise this month and 83 percent of them have shown improvement over the past year. Chief Economist David Crowe shared an optimistic perspective, “It’s a promising sign to see areas like Los Angeles and San Jose joining the top ten largest MSAs showing a recovery. We still expect 2014 to be a strong year for housing and to aid in the overall recovery. The job market continues to mend and with that we will see a steady release of pent up demand of buyers.”

One continuously promising metro is Baton Rouge, LA, which scored 1.42 (42 percent better than its normal market levels). Honolulu, Oklahoma City, and Austin also topped the list. As the weather improves this Spring, CF Funding expects to see more metro areas reaching and exceeding their normal economic levels.

In other housing news, The Bureau of Labor Statistics has shared employment data revealing an increase in construction employment. The most recent report showed a 2.6 percent increase nationwide for February on a year-over-year basis. 73 percent of states had year-over-year increases as of February. Corelogic stated recently on their blog, “94 percent of states had increases in construction employment [during the housing boom], but that share fell to zero in the depths of the housing and financial crisis in 2009… while these year-over-year increases look tepid, they are strong when compared to the period of double-digit increases in construction employment from January 2009 to March 2010.” The state of Florida showed the largest year-over-year increase this February, improving by 11 percent. West Virginia showed the least improvement, with a 6.5 percent decrease in construction employment.

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