Home contract signings rose for the 13th straight month, according to the National Association of Realtors, which reported pending home sales rising 13.3% over May 2011 and up nearly 6% over April 2012.

“The housing market is clearly superior this year compared with the past four years,” said Lawrence Yun, NAR chief economist. “Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10% improvement in total sales for 2012.”

The news from NAR joins a larger discussion on the impact of positive housing news for the spring selling season.

On a seasonally adjusted basis, the Standard & Poor’s Case-Shiller 20-city index increased by 0.7% in both March and April. The CoreLogic ($18.31 0.28%) national house price index rose by 1.1% and 1.2% in March and April, respectively. Additionally, Zillow ($38.63 2.73%) home value index posted a 0.5% increase in May.

Housing analysts at Goldman Sachs ($95.86 2.37%) said there are some suspicions as to whether all of this good housing news may be misleading. After all, they point there are 2 million vacant housing units, with another 4 million in shadow inventory.

“These two seemingly contradictory aspects of the housing market lead many to ask: Can house prices increase in the presence of excess housing supply?” they ask.

Yun commented that desirable housing inventory is actually low, indicating a push on prices. This low inventory, he said, could actually hold back some contract activity.  “If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers.  In an environment of historically favorable housing affordability conditions, it’s frustrating to see some consumers thwarted in the process,” Yun said.

Mortgage servicers completed nearly 123,000 foreclosures in the first quarter, the most since the middle of 2010, according to the Office of the Comptroller of the Currency.

The data covers only 60% of all first-lien mortgages in the U.S. But the report released Wednesday showed a gradually restarting foreclosure process that servicers froze in October 2010 to correct mishandled documentation and wide-scale abuses.

Consent orders signed last spring and a $25 billion settlement with state attorneys general reached this year provided new standards for servicers. 

The total completed foreclosures increased 5.9% from the previous three months and 2.7% from one year ago. Totals are still off the nearly 174,000 foreclosures completed in the three months leading up to the freeze in 2010.

Servicers reporting to the OCC reduced the amount of foreclosures in the process to 1.27 million as of March 31, down 3% from the year before. The backlog did increase 0.6% from the previous three months, according to the data.

Newly initiated foreclosures dropped 8% from one year ago to roughly 287,000 filings.

Servicers conducted fewer home retention actions, such as modifications, compared to home forfeitures such as repossessions and short sales.

Modifications came in at slightly more than 102,000 in the first quarter, a 12% drop from the previous three months and down 36% from a year ago.

The amount of modifications declined every quarter since the second quarter of 2010 when workouts peaked at nearly 267,000, according to the OCC.

Bruce Kreuger, the senior mortgage examiner at the OCC, said in a conference call with reporters the decrease is a result of fewer borrowers becoming severely delinquent and eligible for different modificaiton programs.

“It’s a limited number borrowers,” Kreuger said. “We will see that number continue to decrease.”

Roughly half of the modifications completed between 2008 and the end of 2011 were still current or paid off as of March 31.

Nearly 89% of the 31 million home loans reported to the OCC were still current in the first quarter, up nearly a full percentage point from the previous three months and the highest level since the first quarter of 2009.

Mortgage rates barely moved, hovering at or near the record lows set last week.

The Freddie Mac survey showed 30-year, fixed-rate mortgages averaged 3.66% for the week ending Thursday, matching the previous week’s record low. Last year at this time, the 30-year FRM averaged 4.51%.

The 15-year FRM, a popular refinancing choice, averaged 2.94% down from last week‘s average of 2.95%. A year ago, the average rate for a 15-year FRM was 3.69%.

Five-year, Treasury-indexed, hybrid adjustable-rate mortgages averaged 2.79%, rising from 2.77% last week and falling from 3.22% a year earlier.

And one-year, Treasury-indexed ARMs averaged 2.74%, the same as last week and down from 2.97% last year.

Freddie Mac Chief Economist Frank Nothaft said the virtually unchanged rates should help to support a recovering housing market.

Both the S&P/Case-Shiller 20-city composite and the Federal Housing Finance Agency’s house price indexes showed more than a 0.5% monthly increase in April. And pending existing home sales rebounded in May by 5.9% to match a two-year high and new home sales jumped 7.6% to its fastest pace since April 2010.

Home loan analytics firm Bankrate, which surveys large banks, reported the 30-year FRM fell to 3.89% from 3.92%, while the 15-year FRM dropped to 3.16% from 3.20%. The 5/1 ARM ticked down to 3.02% from 3.03%.

Roughly 48% of property managers surveyed by TransUnion said rental prices increased over the last 12 months on the majority of their properties.

The credit firm surveyed more than 1,200 large and small managers. Last year, less than 40% of respondents said rents were rising.

Roughly 70% of large managers, those handling more than 200 properties, said rents increased from last year.

“The rise in rental prices, coupled with a decrease in vacancy rates and the ability to attract new residents with less effort are all positive signs for the market and rental property managers,” said Steve Roe, vice president of TransUnion rental screening solutions.

Even though rents are rising, demand remains high and managers are not having a problem locating new residents, according to the survey.

Nearly 73% of the managers said it was not difficult to find new occupants, compared to 67% last year.

The survey showed 83% of managers said vacancy rates were less than 5%, and more than 70% reported no vacancies.

Investors and would-be property managers flooded the Federal Housing Finance Agency with applications to take advantage of the rental boom. The agency continues to work on a pilot program to rent out previously foreclosed homes owned by Fannie Mae.

It will closely monitor how these property managers handle the homes in still fragile markets.

More than half of small property managers said they had a renter “skip out” on a unit and left with unpaid rent or damages, according to the TransUnion survey.

“Many of these people only rent out a few units, thus it’s especially important for them to do all they can to identify reliable tenants,” Roe said.

The agency surveyed 87 of the largest banks, covering 91% of all consumer loans in the U.S. banking system.

Roughly 25% of the banks reported tightened underwriting standards for mortgages, down from 40% last year, according to the survey. Also, 10% of banks eased standards on home loans, an uptick from 8% in 2011.

“Despite the many challenges and uncertainties presented by the housing market, none of the banks exited the residential real estate business during the past year; however, examiners reported that two banks plan to exit the business in the coming year,” the OCC said in the report.

Banks already cinched standards to historic levels after the housing market collapse in 2007. Fannie Mae, the largest mortgage financier in the U.S. reported an average FICO score of 763 in the first quarter and a loan-to-value ratio of 70% at origination, according to its latest financial filing.

But nearly two-thirds of banks surveyed by OCC left standards unchanged so far in 2012, signaling “there is a slow continued trend from tightening to unchanged standards.”

“This year’s survey showed the continued normal progression toward stable or easing underwriting standards as the economic environment stabilizes,” said John Lyons, chief national bank examiner at the OCC. “Examiners will be focusing on underwriting standards as banks ease standards to improve margins and compete for limited good loans.”

The median price on new and resold homes in Las Vegas increased 2.5% to $122,000 in May, the highest level since December 2010, according to DataQuick.

Prices also increased 4.3% from last year.

Distressed property sales, including REO and short sales, accounted for 53% of the market in may, down from 68% last year, a major drive behind the price growth.

The housing bust arguably struck Vegas the hardest. Prices dropped 60.9% from the peak of $312,000 in November 2006, DataQuick said. But in recent months, the market rose off the low point of $110,000 in January.

Roughly 4,800 new and resold homes closed escrow in Las Vegas, up 6.1% from the month before.

More than 500 newly built homes actually sold in May, notable for an area where some of the most rampant overbuilding took place during the housing boom. New home sales increased 33% from last year, the 11th straight month of annual increases.

Foreclosures continue to fall in the area after the state passed a new law in October requiring updated affidavits on filings. Servicers foreclosed on 905 homes in May, down nearly 30% from the month before and 76% below levels measured at the same point last year.

Servicers showed signs of adjusting. Notices of default increased 5% from April but remained 67% below last year.

There are many ways to market your business, and living in the Internet age means that there is more data being transferred from one place to another than ever before. There are about 140 million tweets and about two million videos being created each day, and being part of this data transfer by using infographics is one of the best things you can do to promote your business. Your infographic could be tweeted, shared on Facebook or Pinterest or emailed to thousands of people in a single hour.

What are Infographics

Infographics are a mix of writing, analysis and design that are ideal for sharing data about your company. They are an ideal marketing tool in the Internet age. Infographics should be both visually compelling and full of valuable information. A graphic that is well done is like visual shorthand that can potentially go viral. It is a wonderful medium for making complex data easy to understand.

Infographics combine images, text and design to tell a story. The story may be about your company as a whole or it may be about a specific product or service. Infographics that are designed well beg to be shared over and over again. Graphics and text are both great ways to share information, but combining them can turn your advertising into a visual powerhouse that cannot be matched by competitors.

Infographics are a Growing Trend

The use of infographics as a marketing tool is still in its infancy. Most people who use this tool began using it six months ago or less and have been shocked by its power. The use of infographics has increased by more than 800 percent in the last two years and continues to grow daily.

Why You Should Use Infographics for Marketing

You have probably seen hundreds of infographics designed by other business owners to promote their businesses. The question is how infographics can help you market your company.

Easy to Share

Most people are very visual and process visual information faster and easier than information that is conveyed through text. Infographics are more likely to be shared on sites like Facebook and Pinterest than plain text because they are more engaging. Most people scan the content that they read online and only remember the things that grabbed their attention.

Attractive

Sharing information about your company and the products and services you offer is wonderful, but people are likely to ignore information presented in plain text, even if it is well-worded and engaging. People love facts, and presenting the facts in an attractive way makes your content likely to be shared across the Internet. It is essential to spend time creating infographics that are both attractive and informative. Having your friends and family look at your infographics before you share them with the world is smart because they may catch errors or give you suggestions on how the graphic could be improved.

Viral Capabilities

It is very rare that plain text information goes viral, but infographics frequently go viral, simply because they are fun and attractive as well as easy to share on blogs and social networking sites.

Coverage Worldwide

Infographics provide global coverage that text-based printing can’t compete with. They can be published online and instantly shared with millions of people around the world. Even people who speak a different language have an easier time understanding infographics than plain text.

Embeddable

Another wonderful things about infographics is that they are easy to embed into a website or blog. When an infographic is designed, developed and published, the embed code is provided. The code creates an automatic link from the site that your infographic is posted on to your website or blog. This is a wonderful way to bring more customers to your site without a lot of effort.

Show Expert Understanding

One of the best ways to gain the trust of customers is to make them feel like you are an expert in your field. The research that creating an infographic requires will automatically be displayed in the content, making your customers feel like you are an expert in your field. Using statistics and facts in your infographic is also helpful.

Create Brand Awareness

An well-designed infographic that is embedded with your company brand and logo is a very powerful way to creating greater awareness of your company and your products or services. Brand awareness is one of the best ways to get customers to trust your company over companies who offer similar services or products at similar prices.

Creating Infographics

The biggest challenges that business owners have with infographics is creating them. There are several companies that will create an infographic for your company after you have provided them with all of the information you would like included. You can create them yourself, but it is easy to create an infographic that is too busy or difficult to read.

One of the best ways to design a new infographic for your company is to look at the infographics that have been designed by other companies in your field. Look at what you like and don’t like about the infographics created by others and take these elements into account when you are designing your own. Pay special attention to the colors you use and make sure that the font and graphics you use are simple and easy to interpret.

The May Realtors® Confidence Index reports that the percentage of cash sales declined to 28 percent in May, from 29 percent in April for residential properties. The high preponderance of all-cash sales appears to be due to a number of factors: unrealistically high loan underwriting standards, a significant level of investor participation in the market, and sales of properties as second homes.

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses jobless claims and GDP.

• The drop in claims for unemployment insurance for the week ending June 23 and the double-digit growth in residential investment in 2012 Q1 is good news for the real estate market.
• The employment situation appears to be poised for some modest gains, based on the initial claims for unemployment insurance filed for the week ending June 23. Initial claims for unemployment insurance dropped to 386,000 from the revised (upward) estimate of 392,000 the previous week.
• The 4-week moving average, which is less volatile, declined to about 387,000. Despite this week’s gains, the level of jobless claims remains high, especially compared to first quarter levels when claims hit a low of about 363,000. Still, the economy is expected to generate at least 1 million jobs in 2012, which is a potential market of homebuyers.
• The economy, as measured by GDP, grew at a slower pace of 1.9 percent in Q1 of 2012 (3rd estimate) compared to 3.0 percent in Q4 of 2011. Although GDP growth slowed overall, the good news is that residential investment rose sharply at 20 percent, the second quarter of double digit growth after Q4 2011 growth of 11.6 percent.
• The pickup in residential investment is indicative of positive investor expectations that future housing demand is expected to further increase in the future.
• The housing market, as seen by many indicators released by NAR such as existing home sales, pending home sales, and the REALTORS® Confidence Index (RCI), is certainly recovering.
• Greater investment now should ease up the tight inventory situation in the coming months.

Scholastica (Gay) Cororaton, Research Economist

Tagged with: GDP • jobless claims