Mixed bag for housing: New home sales down, delinquencies down, too

It's a little from column A, a little from column B today for housing.

No surprise this morning with the Commerce Dept's announcement of new home sales: The tax credit hangover continues with the worst June ever and second worst month on record, but hey, at least sales were up 24 percent from May (which happened to be the worst month ever.)

On the positive side, mortgage delinquencies (while still near record highs) were down ever so slightly, according to the Wall Street Journal's Developments blog:

Some 9.39% of all loans were 30 days or more past due, down from 9.54% in May, according to LPS Applied Analytics, which tracks loan data. An additional 3.69% of mortgages were in some stage of foreclosure, down from 3.72% in May and the record high of 3.81% in March.
The ratio of loans that were seriously delinquent, or 90 days or more past due, to the amount of loans in foreclosure still shows a sizeable overhang but fell for the second straight month, to levels last seen last September. The fact that there are still more than double the number of delinquent loans than loans in foreclosure suggests that the glut of bank-owned properties will continue to weigh on housing markets for many months to come.
Foreclosure starts increased sharply during the month on loans owned or guaranteed by Fannie Mae and Freddie Mac as more government loan-modification trials failed to convert to permanent modifications. On Friday, Freddie said that its share of seriously delinquent loans fell for the fourth straight month, to 3.96% in June.

Finally, the Wall Street Journal over the weekend had an interesting article on people who are choosing to "double down" on their investment in housing in light of the uncertain stock market and bargains to be had. Interesting read.

Existing home sales still getting a tax credit boost

Existing home sales were up 9.8 percent from a year ago, but down from May, according to numbers released by the National Association of Realtors this morning.

Lawrence Yun, NAR chief economist, said the market shows uncharacteristic yet understandable swings as buyers responded to the tax credits. “June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months,” he said.

“Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels.”

Distressed sales represented about a third of all sales, basically unchanged from a year ago, but inventory continues to rise. There's about an 8.9 month supply of homes on the market right now, down from the worst of the crash, but certainly still a buyer's market.

Every region except the West (sales up only 0.9 percent) saw double-digit sales increases from a year ago.

Unlike new home sales, we're still not seeing the post-credit crash because existing sales are reported when the deal closes and new sales are reported when the contract is signed.

Professional Remodeler is back!

We're officially back up and running this week at Professional Remodeler under our new ownership (read more about that here.)

We plan to publish our first issue and relaunch the website in September. I'll continue to make posts here while waiting for the new site to be live.

In the meantime, you can also contact me at (847) 954-7940 or by e-mail at jsweet@sgcmail.com.

Professional Remodeler thisclose to relaunch with new partnership

The good news I hinted at a few weeks ago has finally come about. MB Media, the company formed to purchase the Construction Media Group from Reed (which includes Professional Remodeler) has signed a deal with Scranton Gillette Communications to relaunch the magazines.

I know a few people at the company, and am pretty excited about getting a chance to work with them. (Some of you may remember Rick Schwer, the publisher of Qualified Remodeler during my time there.) And unlike Reed, SG is a company that is dedicated to B2B communications instead of it just being a part of a much larger portfolio, which should pay big dividends when it comes to getting the resources to produce quality information.

The plan calls for the magazines to relaunch with their September issues. We are very close to getting this thing going again!

New Home Sales at Record Low

We expected the news to be bad, but this is really bad.

New homes were at a record low in May as buyers fled the market following expiration of the tax credit, down 33 percent from April (which itself was revised downward.)

This is why anyone with any sense (including me!) argued against the extension after it expired last time. We moved demand forward, artificially inflated prices and set ourselves up for another dip in home prices. Couple these declining sales with the rise in inventory as more sellers flood the market, and it's going to be ugly, probably for the rest of the year.

Once again it just points to the trouble builders are going to be facing, and that's going to trickle down to remodelers as well. Typically, the housing sector leads us out of a recession. That's clearly not going to happen here, which could be very bad news for all of us.

This week we pay the home sales piper

We're going to get our first indication on Wednesday just how big the crash is going to be following the expiration of the new home buyer tax credit. That's the day new home sales for May come out. May's the first month the credit won't have been a factor.

If early indications are any clue, it's going to be ugly. Everything I've been reading and hearing from people out there is that sales are down 20 to 50 percent depending on your market. We'll see how the national numbers come out.

Don't let Tuesday's numbers on existing home sales fool you. Those should still be good because existing sales are reported when the deal is closed, while new sales are reported when the contract is signed. With the recent move to extend the time for buyers to close on deals and get the tax credit, it could be months of those sales trickling in.

EPA Delays Lead-Paint Rule Enforcement

Great news from the EPA today, via NARI.

The agency has agreed to delay enforcement of the LRRP rule until October 1, 2010, citing the need for more time for firms to get trained and certified.

Click here to read the EPA's letter announcing the delay.