Hopes are up that the U.S. housing market will do much better in 2012 despite continued home price reductions and foreclosure in certain local housing markets. Here are five indications that the national housing market is ending the year 2011 on a high note:
Increase in buyer demand for homes for sale
According to the HousingPulse survey by Campbell/Inside Mortgage Finance, the demand for homes for sale increased in November and that the average time spent by bank-owned properties on the market dropped to just a little bit more than 10 weeks, the shortest market time in 15 months.
Substantial Gains by Homebuilder stocks
The stocks of the country’s biggest homebuilders posted substantial gains on December 20, 2011 due to the rise in homebuilder confidence and the surge in housing starts in November. Builders including Pulte Group, D.R. Horton, KB Home, Toll Brothers, Lennar and Ryland Group all experienced gains, pushing up the Dow Jones Industrial Average.
Based on data from the U.S. Commerce Department, housing starts increased by 9.3 percent in November from housing starts in October. Over the year, housing starts shot up by 24.3 percent from the November 2010 data. The adjusted rate of 685,000 housing starts in November 2011 was the highest figure since April 2010.
Rise in Homebuilder Confidence
The National Association of Home Builders/Wells Fargo Builder Confidence Index increased in December 2011 for the third straight month. The December increase to 21 was the highest level the index reached since May 2010. Builders have been energized by the increasing number of inquiries for new homes for sale from buyers, particularly those in the South, the West and Midwest.
Analysts said that the homebuilder confidence index is still low, but the upward trend of the index is a positive sign. Builders know that buyers are aware of the abundance of homes listed with substantial reductions and of the significant drops in mortgage rates.
Increase in Existing Home Sales in November 2011
The annualized rate for existing homes sold in November increased by 4 percent to 4.42 million, the highest level since January 2011, according to the National Association of Realtors. This is already the final figure, as the much-commented-about NAR revision of home sales involved only sales figures from 2007 to October 2011. The total existing home sales over this period was revised and reduced from 24.8 million to 21.3 million units.
Drop in Housing Inventory and Rice in Median Price in November
The total number of homes listed for sale in various multiple listing services across the country dropped to 2.01 million units, according to Realtor.com. This represented a drop of 4.8 percent from October 2011 and by 21.3 from November 2010. The drop in housing inventory can be a positive or negative indicator for the U.S. housing market, but if it means a substantial rise in home prices and if it energizes the market, then this is a good sign. Median home prices increased in 94 out of 146 markets in November 2011.
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