S&P/Case-Shiller Home Price Indices show strong gains for February 2013

Data through February 2013, released today by S&P Dow Jones Indices for its
S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, showed average home prices increased 8.6% and 9.3% for the 10- and 20-City Composites in the 12 months ending in February 2013. The 10- and 20-City Composites rose 0.4% and 0.3% from January to February.

All 20 cities covered by the indices posted year-over-year increases for at least two consecutive months. In 16 of the 20 cities annual growth rates rose from the last month; Detroit, Miami, Minneapolis and Phoenix saw slight annual deceleration ranging from -0.1 to -0.4 percentage points. Phoenix continued to stand out with an impressive year-over-year return of +23.0% while Atlanta and Dallas had the highest annual growth rates in the history of these indices since 1992 and 2001, respectively.

“Home prices continue to show solid increases across all 20 cities,” says David M. Blitzer, Chairman of the
Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005.

“Phoenix, San Francisco, Las Vegas and Atlanta were the four cities with the highest year-over-year price
increases. Atlanta recovered from a wave of foreclosures in 2012 while the other three were among the hardest hit in the housing collapse. At the other end of the rankings, three older cities – New York, Boston and Chicago – saw the smallest year-over-year price improvements.

“Despite some recent mixed economic reports for March, housing continues to be one of the brighter spots in the economy. The 2013 first quarter GDP report shows that residential investment accelerated from the 2012 fourth quarter and made a positive contribution to growth. One open question is the mix of single family and apartments; housing starts data show a larger than usual share is apartments.”

2012 Builders Top 100 Ranking - West Region

Region: West
Type of home: All types
Status: Public and Private
What they build: All for sale products
Note: (p) indicates a public company.
N/A indicates information not available
* Declined to share revenue numbers
† Home building revenue only
‡ Estimated revenue
				(in millions)
2012 Rank	2011 Rank	Company	Total Closings	Total Revenue
1	1	D.R. Horton (p)	19,954	$4,722
2	2	PulteGroup (p)	16,505	$4,820
3	3	Lennar Corp. (p)	13,802	$4,105
5	5	KB Home (p)	6,282	$1,560
6	7	Hovnanian Enterprises (p)	5,356	$1,806
7	8	The Ryland Group (p)	4,809	$1,308
8	9	Beazer Homes USA (p)	4,428	$1,006
9	10	Meritage Homes Corp. (p)	4,238	$1,194
10	6	Habitat for Humanity International	3,766	$1,500
11	11	M.D.C. Holdings (p)	3,740	$1,203
12	13	Standard Pacific Corp. (p)	3,329	$1,275
13	12	Toll Brothers (p)	3,286	$1,883
14	14	Taylor Morrison	2,933	$1,400
18	18	Weyerhaeuser Real Estate Co. (p)	2,314	$1,070
19	21	Shea Homes	1,921	$814
26	29	Woodside Homes	1,300	$329
33	39	William Lyon Homes	950	$373
40	42	Polygon Northwest Co.	832	$232
42	40	Hayden Homes	785	N/A
49	46	NeighborWorks America	608	N/A
50	106	Saint Aubyn Homes	605	$147
53	80	CBH Homes	548	$85
55	74	Brookfield Residential Properties (p)	533	$1,340
56	54	Corky McMillin Cos.	529	$122
56	47	Discovery Builders/A.D. Seeno Construction	529	$269
67	N/A	Harmony Homes	466	$106
98	N/A	Edge Homes	335	$70

Housing starts at highest level since 2008

Groundbreaking to build homes rose in February and new permits for construction climbed to the highest level since 2008, a sign the nation's housing market recovery is gathering steam.

The Commerce Department said on Tuesday that starts at building sites for homes rose 0.8 percent last month to a 917,000-unit annual rate. That was in line with analysts' expectations of a 915,000-unit rate.

Starts for single-family units, which comprised about two thirds of the total, edged up 0.5 percent to their highest level since June 2008.

Permits for future home construction rose to a 946,000-unit rate, also the quickest since June 2008.

The housing market has regained some footing after a historic collapse that helped push the economy into a deep recession.

Home building added to national economic growth last year for the first time since 2005 and Tuesday's data reinforces the view that it will provide stronger support this year. That could help counter the drag expected from tighter fiscal policy as Washington works to shrink the federal budget deficit.

"Home building continues to recover and add to the recovery," said Gus Faucher, an economist at PNC Financial Services in Pittsburgh. "The rise in permits suggest we will have a solid spring."

The housing data was just the latest to suggest the economy has built a fair bit of momentum in the first quarter. Nevertheless, the Federal Reserve at a meeting on Tuesday and Wednesday is expected to push forward with plans to buy $85 billion in bonds per month until its sees a substantial improvement in the labor market outlook.

Data for U.S. housing starts can be volatile and is sometimes subject to large revisions. The government revised upward its estimate for January housing starts to a 910,000-unit rate.

The housing market remains a shadow of its former self, with starts at less than half of their pre-recession peak and near levels seen in the early 1990s.

The recovery also has been bumpy. In March, homebuilder sentiment slipped to the lowest level in five months as supply chain concerns and rising costs dented enthusiasm, according to data released on Monday.

Stock index futures were little changed following the data amid caution ahead of a crucial vote in Cyprus that could lead the country into default. Investors are waiting to see if the nation's troubles would have a wider impact in the euro zone.

Inventory of existing homes at 13-year low

U.S. home resales edged higher in January and left the supply of homes at its lowest level in 13 years, a sign that steam is gathering in the U.S. housing market.

The National Association of Realtors said on Thursday that existing-home sales rose 0.4 percent last month to a seasonally adjusted annual rate of 4.92 million units.

That was the second highest rate of sales since November 2009, when a federal tax credit for home buyers was due to expire.

Analysts polled by Reuters had forecast a 4.9 million-unit rate.

The U.S. housing market tanked on the eve of the 2007-09 recession and has yet to fully recover, but steady job creation helped the housing sector last year, when it added to economic growth for the first time since 2005.

The nation's inventory of existing homes for sale, which is not seasonally adjusted, fell 4.9 percent from December to 1.74 million, the lowest level since December 1999.

Many Americans are holding back from putting their homes on the market because they owe more on their mortgages than their homes are worth. A sharp drop in inventories over the last year has given developers more incentive to build homes. Home building is expected to boost the economy more in 2013 than it did last year.

Inventories were down 25.3 percent from January 2012.

At the current pace of sales, inventories would be exhausted in 4.2 months, the lowest rate since April 2005.

The low inventories are also helping pushing prices higher.

Nationwide, the median price for a home resale was $173,600 in January, up 12.3 percent from a year earlier.

Home Builders Won't Drop Prices

A report this week from Barclay's downgrading the stocks of several of the nation's largest public home builders drew quick contest from the National Association of Home Builders, but not for the main premise. The Barclay's report centered largely on, "stretched" stock valuations, but it also cited a secondary concern about new home prices.

"New home prices have dramatically outpaced existing home prices, and the reason for that is because you have a very constructed mortgage market today. The only people who can buy are people who are very well off, so that's created a positive mix shift," noted Barclay's analyst Stephen Kim in an interview on CNBC's "Street Signs."

"But if everybody's hopes and dreams about housing come true, which is what's driving the valuations on the stocks, guess what's going to happen? You're going to get a lower mix of buyers into the market which is going to bring new home prices down even as existing home prices are going up."

Right now the divide between new and existing home prices is wider than ever. The average price of an existing home in December was $231,400, according to the National Association of Realtor's, while the U.S. Commerce Department reported the average price of a newly built home stood at 304,000.

In their most recent quarterly statements, all of the largest public home builders reported large annual jumps in the average prices of their homes sold. Pulte's prices jumped 6 percent to $287000, for Lennar it was a seven percent surge to 261,000 and Meritage led the group with a 17 percent annual jump in average sale prices to $323,000.

"New home prices are advancing faster than existing home prices because demand has increased and, as Kim did admit, the mortgage filter is allowing only higher income or at least higher net worth people through the application net, and they are purchasing higher valued homes. But that is true of existing purchases as well," argues David Crowe, chief economist for the NAHB.

Crowe also makes the argument that new home prices are dictated by costs and demand. Both, he says are rising.

"Lumber and other building material prices have risen very rapidly recently. Shortages of lots and labor supply are beginning to show up, and I expect as new household formations begin to recover, that shortage will expand to more markets. The way to get more resources back into the housing market is to raise the price paid, i.e., wages and land prices," says Crowe.

Builder profits, he notes, among the small private builders (who still control 70 percent of the market), have been negligible for several years.

"They will have to raise prices to compensate for their efforts, risks and, at least for a short time, being the only ones left," adds Crowe

Courtesy of CNBC's Diana Olick

Housing Prices Climb; Market 'Clearly Recovering'

U.S. single-family home prices rose in November, building on a string of gains that points to a housing market that is on the mend, data from a closely watched survey showed on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.6 percent in November on a seasonally adjusted basis, in line with economists' forecasts.

Prices on a non-adjusted basis slipped 0.1 percent. The non-adjusted numbers showed prices fell in about half of the cities covered by the survey, with the winter months typically a weak period for housing, the survey said.

S&P/Case-Shiller: US Home Prices Extend Gains 

The latest S&P/Case-Shiller report shows U.S. home prices continued to rise through November of last year, with David Blitzer, S&P 500 Index Committee Chairman.

"Housing is clearly recovering", David Blitzer, chairman of the index committee at S&P Dow Jones Indexes, said in a statement.

"There's a lot of momentum," he added during an interview on CNBC's "Squawk on the Street." "It shows up in all the housing statistics, not just the prices. As far as I can see it's going to continue well into the new year."

Prices in the 20 cities rose 5.5 percent year over year.

It was the 10th month in a row that prices have increased, the longest string of gains since before the market started to turn down in 2006.

The housing market became a bright spot for the economy last year as prices rose and inventory tightened. The sector is expected to contribute to economic growth in 2013.

Coutersy of CNBC

Housing recovery is leaving behind first-time buyers

Current homeowners are finally moving up, and distressed sales are making up less of the overall market—all signs of much-needed improvement in housing.

Current homeowners accounted for 54 percent of October’s non-distressed market, up from 50 percent in June, according to a new survey by Campbell/Inside Mortgage Finance.

This as the share of non-distressed sales surged to 64.7 percent, up from 55.7 percent as recently as February.

Unfortunately, first-time home buyers are seeing just the opposite, largely left out of this surge in sales and prices. Their share of the market, usually up in the 40 percent range historically, fell to 34.7 percent in October, the lowest in the Campbell/IMF survey’s three-year history.

The National Association of Realtors put their share even lower, at 31 percent.

Either way, they are the only group of buyers that have not seen their share of non-distressed home purchases rise over the past five months. The mortgage of choice for these buyers, FHA-insured loans, are increasingly tough to obtain.

“Financing of first-time homebuyers with low down payments threatens to become a significant problem in the U.S. housing market,” wrote Thomas Popik, research director for Campbell Surveys. “Fifty percent of first-time homebuyers use FHA financing, but FHA insurance premiums are increasing and underwriting is becoming more strict. Private mortgage insurance has started to fill the gap, but the long-term status of private mortgage insurance is in question pending the publication of the Qualified Residential Mortgage regulation resulting from Dodd-Frank.”

Real estate agents answering this latest survey also noted that the recent hike in FHA mortgage insurance premiums is hitting first-time buyers harder because some sellers are refusing to accept offers that include FHA financing. Adding insult to injury, the FHA, after reporting a major shortfall in its insurance reserve funds, announced it would raise premiums yet again, another 10 basis points early next year.

Lower priced, distressed properties, like foreclosures and short sales, would seem like the best answer for first time buyers, but hungry, all-cash investors are proving to be too much competition. Investors purchased one fifth of all homes that sold in October, up from 18 percent the previous month, and all-cash buyers (largely investors) made up 29 percent of all sales, according to the Realtors.

This is why, despite increasing household formation, rental occupancies continue to fall and rents to rise. Would-be first time home buyers are either choosing or are forced to rent.