Pending Home Sales Hit Record Low

Or if you prefer the Realtors' spin, "Pending Home Sales Ease in Post-Tax Credit Market."

Either way you look at it, it's the lowest mark since the group started tracking pending sales this way in 2001.

The NAR Pending Home Sales Index, which tracks contracts not closings, fell to 75.7 based on contracts signed in June. That's down from 77.7 in May and 93.0 a year ago. (An index of 100 is equal to the average level of activity in 2001.)

From the NAR:

Lawrence Yun, NAR chief economist, said lower home sales are expected in the short term. “There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” he said. “Over the short term, inventory will look high relative to home sales. However, since home prices have come down to fundamentally justifiable levels, there isn’t likely to be any meaningful change to national home values. Some local markets continue to show strengthening prices.”

One More Week to Comment on EPA Lead Paint Clearance Requirement

Next Friday is the deadline for public comment on the EPA's proposed change to the LRRP to include a post-project clearance requirement.

The proposed change would require remodelers to test for lead and provide the results to owners and occupants after projects in a pre-1978 house.

To comment on the rule and see past comments, visit www.regulations.gov. The docket number for the rule is EPAHQ-OPPT-2005-00492. NAHB members can also access tips that the association put together for its members to comment on the proposed revision.

This is separate from the removal of the opt-out provision, which has already taken effect, but is being challenged in court by NAHB and other trade associations.

NAHB Remodeling Market Index Takes a Nasty Dip

Remodelers are feeling decidedly less optimistic about the remodeling market, according to the latest Remodeling Market Index from NAHB.

The index, released today, shows a drop from 47.9 in the first quarter to 40.7 in the second quarter. An RMI below 50 means more remodelers feel the market is deteriorating than feel it is improving. Last quarter was the closest the RMI has come to 50 since 2005.

The RMI increased in the Midwest (from 43.8 to 44.7) and West (42.0 from 34.8), but dropped in the Northeast (46.6 to 41.4) and South (44.1 to 42.4).

Two comments on the drop from NAHB officials:

"Remodelers are suffering from weak consumer confidence and constricted credit lines," said NAHB Remodelers Chairman Donna Shirey, CGR, CAPS, CGP, a remodeler from Issaquah, Wash. "Homeowners are delaying remodeling projects because of economic uncertainty."


"While remodelers are continuing to struggle, we expect the rest of 2010 to be a period of stabilization for remodeling, with the first stages of recovery emerging by the end of the year, followed by a more robust recovery beginning early next year," said NAHB Chief Economist David Crowe. "For now, professional remodelers are taking on smaller projects and working to find consumers willing to spend money despite the economic uncertainty."

Other questions showed that NAHB members are undertaking smaller projects than in the past, as well, with marked decreases in room additions and kitchens and increased work in bathrooms and handyman projects. We saw similar results in our Business Results Study released in April, which showed a 47 percent drop in average project size. (No link, because HousingZone isn't back up yet, but e-mail me if you'd like more info.)

Submit your homebuilding products for 101 Best New Products

Hey, product manufacturers, suppliers and PR folks.

The editors of Professional Builder and Professional Remodeler magazines are in search of the latest “breakthrough” products for the residential construction industry for our annual 101 Best New Products report.

The winners will be featured in the November 2010 issues of Professional Builder and Professional Remodeler magazines, as well as online at HousingZone.com.

To be considered for the report, products must be geared toward the home building and remodeling industries. Product categories include (but are not limited to):

•    Appliances
•    Decking/outdoor living
•    Doors
•    Flooring
•    Home technology
•    HVAC
•    Insulation
•    Kitchen & Bath products
•    Lighting
•    Molding & millwork
•    Paints, caulks & sealants
•    Roofing
•    Siding
•    Software
•    Structural
•    Tools & equipment
•    Walls & ceilings
•    Windows/skylights

Submissions are free, and companies can submit multiple new products. Submissions should include 1) a detailed press release that discusses the key innovations and features of the product, and 2) at least one high-resolution color image of the product (you may submit multiple images). Submissions are due September 7.

You can send your entries to me at jsweet@sgcmail.com.

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.