Pending Home Sales Up, Mortgage Apps and Foreclosures Down
The National Association of Realtors’ (NAR) Pending Home Sales Index (PHSI) took a scant 0.1 percent uptick to 110.0 in October from a slight downward revision of 109.9 in September. Nonetheless, the PHSI is 1.8 percent higher than the 108.1 level from October 2015.
On a regional breakdown, the PHSI in the Northeast nudged forward 0.4 percent to 96.9 in October, while the Midwest the index climbed 1.6 percent to 106.3 and the index in the West climbed 0.7 percent in October to 108.3. But pending home sales in the South declined 1.3 percent to an index of 120.1.
“Most of the country last month saw at least a small increase in contract signings and more notably, activity in all four major regions is up from a year ago,” said Lawrence Yun, NAR chief economist. “Despite limited listings and steadfast price growth that’s now carried into the fall, buyer demand has remained strong because of the consistently reliable job creation in a majority of metro areas.”
Separately, the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Nov. 25 found the Market Composite Index down decreased 9.4 percent on a seasonally adjusted basis from one week earlier; this index reading took into account the abbreviation caused by the Thanksgiving holiday. On an unadjusted basis, the Index collapsed by 38 percent compared with the previous week. The seasonally adjusted Purchase Index decreased by a miniscule 0.2 percent from one week earlier, while the unadjusted index decreased by a not-miniscule 34 percent, although it was three percent higher than the same week one year ago. The Refinance Index dropped by 16 percent from the previous week as the refinance share of mortgage activity decreased to 55.1 percent of total applications, the lowest level since June, from 58.2 percent the previous week.
Among the federal home loan programs, the FHA share of total applications decreased to 10.4 percent from 11.7 percent the week prior while the VA share of total applications decreased to 11.7 percent from 12.5 and the USDA share of total applications remained unchanged at 0.8 percent.
On the servicing side of the industry, Black Knight Financial Services (BKFS) reported that October’s foreclosure data saw the lowest number of foreclosure starts in almost 12 years. Last month, there were 56,500 foreclosure starts, an eight percent drop from September and a 22 percent year-over-year decline. The overall foreclosure rate fell below the one percent of all mortgages for the first time since July 2007. As of October, Black Knight found over 500,000 loans remaining in active foreclosure.
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