A bit of good news from the Census Bureau and HUD, which released the latest information on residential construction.
Building permits are up, housing completions are up some, and housing starts are probably up, according to the latest data from the Census Bureau.
Here are the data (you can view the PDF of the full report by clicking here):
Building permits were up 16.1 percent (±1.7%) in June compared to the year before.*
Back in February we told you not to worry about Richard Cordray’s appointment to the Consumer Financial Protection Bureau. (There was some concern that if wasn’t confirmed, we’d be back in limbo in terms of mortgage requirements, and that would play havoc with the housing recovery.)
Two pieces of good news when it comes to homeowners staying in their homes, and one of them also bodes well for the future.
Let’s start with RealtyTrac, which says foreclosure filings (everything from default notices to actual repossessions) are down in a big way: down 23 percent in the first half of 2013 from a year before.
If you just look at June, filings are down 35 percent from the previous year (and 14 percent from the previous month). In fact, June’s filings were at the lowest monthly level since December 2006.
Here’s the chart (click to enbiggenify):
Low inventory has been a problem lately, and not just in Virginia. But the latest figures from Realtor.com show that, while inventory is still low, signs are showing that it may be bottoming.
According to the report, June inventory was 7.3 percent below what it was a year ago. But here’s the good news: We had been looking at much bigger declines. For example, February’s numbers were down 18.6 percent year to year.
So the inventory drop may be slowing. In fact, reports the Wall Street Journal,
There’s a big deal going on in the Senate regarding tax reform.
The Senate Finance Committee has decided that the easiest way to change the tax code is to start with a blank slate — that is, start with no deductions at all, then add in the ones that are most important.
Unfortunately, in the post-Citizens United era, "most important" could easily become "what most big businesses want," rather than "what’s best for the country." Which is why NAR wants to be sure that tax incentives for homeowners — notably the mortgage interest deduction, property tax deduction, and capital gains exclusions — are at the top of the list.
About a month ago a survey was sent out to Virginia Realtors giving them the opportunity to share what they are experiencing first hand, in the field regarding the housing market.
The survey, conducted in partnership with The Federal Reserve Bank of Richmond, focused on the state of the residential housing market in Virginia and how those conditions changed during the first quarter of 2013.
About 70 percent of Virginia Realtors say that housing market conditions were slightly or significantly better the in the first quarter of this year, and a similar share of respondents indicated that the inventory of housing was very low.
CNBC’s annual list of "America’s Top States for Business" is out, and Virginia has slipped further — now we’re down to number five (tied with Utah). After finishing first for three years (2007, 2009, and 2011), we dropped to third place last year, and dropped further in 2013.
- South Dakota
- North Dakota
- Utah, Virginia
Why? CNBC ranked the states by a number of criteria, essentially boiling down to "where is it cheapest and easiest to have a business." So "cost of doing business" — taxes, utilities, wages, and real estate — is high on the list, and that was our first big stumbling block.
Good news: May inventory is up 16.9 percent for the year, which is a good, solid number. (See the explanation below.)
Bad news: Inventory is still 14.3 percent lower than last May nationwide.
Inventory typically follows a cycle, increasing through the first half of the year and decreasing through the second half. So by July it might be 15 percent above what it began the year with. By December it might be right back where it started.
In 2011 and 2012, inventory didn’t increase much through June, and then it decreased significantly through the end of those years — by December 2012, for example, inventory was more than 20 percent below what it started the year with.
Home prices can’t keep rising this quickly forever. That’s what Realtor magazine is reporting that CNBC is reporting that NAR has said. (I know, right?)
Here’s the deal: In May, NAR reported that home prices were up 15.4 percent from the year before. And that marked six months of those kind of double-digit price jumps. Said NAR’s chief economist Lawrence Yun, "[I]t cannot continue."
Which, of course, makes perfect sense, and (hopefully) no one is expecting it to continue. Prices are shooting up for several reasons, none of which will apply forever.