Archive for March, 2013
Breck’s Bobby Brown welcomes Vail Resorts to the world of Red Bull
WASHINGTON (MarketWatch) — Existing-home sales rose in February to reach the highest rate in more than three years, another sign of a strengthening housing market, as inventories posted an unusually large gain in the month, a trade group said Thursday.
Economists polled by MarketWatch had expected a pace of 5.02 million for February, compared with an original estimate of a 4.92 million rate in January. See economic calendar. On Thursday, NAR upwardly revised January’s rate to 4.94 million.
While sales remain below prerecession and bubble levels, low mortgage rates and an improving jobs picture are supporting demand. Also, rising prices are encouraging activity, luring sellers to place homes on the market.
Inventories rose 9.6% in February to 1.94 million existing homes available for sale. The months’ supply of existing homes rose to 4.7 in February from 4.3 in January, the first increase since April, but still a relatively low figure. January’s months’ supply was the lowest since May 2005.
Compared with February 2012, the median sales price rose 11.6% to $173,600. Elsewhere Thursday, a federal agency reported that home prices in January climbed 6.5% from the same period in the prior year. Read more about the government’s estimate.
“The trend in home sales still looks up; with inventories down sharply, prices are rising as well,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics, wrote in a research note. “While levels are still low, housing is now the strongest part of the economy in growth terms.”
Other housing data released this week indicated a housing market that is growing stronger over the long term, despite some mixed recent indicators. Construction on new U.S. homes recently nudged up, and confidence among home builders declined. Read more about construction.Read more about builder confidence.
Going forward, there’s concern that overly stringent lending standards and ongoing high unemployment could cut the housing market’s improvement.
Still, analysts expect the housing market to continue to add to economic growth this year given the Federal Reserve’s backing and an economy that is adding jobs. Indeed, a recent reading on building permits, which are a sign of future demand, hit the highest level since June 2008.
The recent rises in asking prices has been outpacing the increases in rents, but home buying still may make more financial sense, a new study shows. Owning a house was found to be 44 percent cheaper than renting, according to the latest study from Trulia that compared the costs of the two.
The study found that owning is less than half the cost of renting in 46 of the 100 largest metros. “Buying a home is cheaper than renting in all of the 100 largest metro areas,” according to Trulia.
Falling mortgage rates are helping to keep home buying more affordable. But depending on where you live, the difference between owning versus renting can be big or small. For example, in San Francisco, home ownership was found to be 19 percent cheaper than renting, whereas in Detroit owning a house is 70 percent cheaper than renting.
The following are places where home purchases exceed renting by the highest amounts:
- Dayton, Ohio
- Gary, Ind.
- Cleveland, Ohio
- Warren-Troy-Farmington Hills, Mich.
- Toledo, Ohio
- Memphis, Tenn.-Miss.-Ark.
- Kansas City, Mo.-Kan.
- Birmingham, Ala.
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By Ruth Mantell, MarketWatch
Construction on new U.S. homes edged up in February, as longer-term trends signaled a housing market that continued to strengthen, government data show.
WASHINGTON (MarketWatch) — Construction on new U.S. homes nudged up in February with modest gains for single-family residences and apartments, as longer-term trends signaled a housing market that continued to strengthen, according to data released Tuesday.
The U.S. Department of Commerce’s report also showed substantial gains in building permits, which indicate future demand.
Construction on new U.S. homes rose 0.8% in February to a seasonally adjusted annual rate of 917,000, the highest level since December. Economists polled by MarketWatch had expected construction starts in February to rise to a rate of 913,000 from an original January estimate of 890,000. On Tuesday the government upwardly revised January’s starts rate to 910,000. See economic calendar.
Starts for single-family homes rose 0.5% in February to a rate of 618,000, the highest level since June 2008. Meanwhile, starts for structures with at least five units increased 0.7% to a rate of 285,000, the highest level since December.
The longer-term picture points to a rebound in activity — starts in February were up 28% from the same period in the prior year. Despite construction gains, which have been fueled by pent-up demand and affordability, starts remain below a bubble peak of almost 2.3 million in 2006.
“The overall picture on the housing starts front has been somewhat tepid over the past two months. Nevertheless, the housing recovery continues to run at a solid pace, with both broader trends pointing to a steady recovery in the sector,” wrote Gennadiy Goldberg, a strategist at TD Securities, in a research note.
Going forward, there’s concern that overly stringent lending standards and ongoing high unemployment could cut progress. However, a recent report on confidence among home builders signaled that their outlook on upcoming sales increased in March, while their views about present home sales worsened.
Ruth Mantell is a MarketWatch reporter based in Washington. Follow her on Twitter @RuthMantell.