Real estate market recap, May 18-22

Here’s what happened this week in the real estate market:

Builder confidence in the market for newly built single-family homes slid two points in May to a level of 54, but still posted a nine-point increase from a year ago, according to the National Association of Home Builders/Wells Fargo Housing Market Index.

“We’ve found that rising rents do not appear to be playing a significant role in motivating renters to buy a home,” said David Brickman, EVP of Freddie Mac Multifamily, in a statement; Freddie Mac research showed that most renters are not looking to buy homes despite rising rent. “This contradicts what some in the housing market think as they expect more renters ought to be actively looking to purchase a home. We believe rising rents are primarily a sign of increased demand rather than a signal that home purchases will be increasing.”

The Re/Max National Housing Report clocked higher home sales in April 2015 than in any other April since the report began in 2008.

Privately owned housing starts, which include single-family and multifamily residential construction, jumped 20.2 percent in April to a seasonally adjusted annual rate of 1.135 million from a revised March estimate of 944,000, according to a monthly report released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.

Freddie Mac revised the forecast for economic growth for 2015 down from 2.6 percent to 2.3 percent due to weak first-quarter data in its U.S. Economic and Housing Outlook for May.

Existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 3.3 percent to a seasonally adjusted annual rate of 5.04 million in April from an upwardly revised 5.21 million in March, the National Association of Realtors reported.

Driven by an increase in bank repossessions, 125,875 properties faced some form of foreclosure activity in April, representing an 18-month high, according to RealtyTrac’s U.S. Foreclosure Market Report.

Subsidies that governments give to debt have spawned a “vast distortion” in the global economy that has made the financial system vulnerable to crises, hindered productive investment, curtailed economic growth and aggravated inequality, according to The Economist.

Last month’s purchase loans as a percentage of lenders’ overall mortgage volume hit 52 percent, a 6 percent jump from March, according to Ellie Mae’s Origination Insight Report.

As the rental sector enters what is historically peak leasing season, owners and managers of value-add — Class B and C — properties and newly built or Class A product will look to push rents more aggressively. For recent college grads, this will equate to a difficult environment in which to find “affordable” living.

Another week of anxious pencil-tapping in quiet markets, and one more holiday-shortened week ahead before events will conspire to move the herd. Long quiet, big move. A “data-dependent” Fed means more than ordinary waiting for data. If the Fed is waiting, too, then we’re really waiting.

While the real estate market has experienced a strong surge in refinance transactions in recent years, an economist at government-sponsored enterprise Fannie Mae and the head of mortgage software provider Ellie Mae this week touted an increase in purchase mortgage applications in the past few months.

Auction.com’s Real Estate Nowcast projected that existing home sales for May will land somewhere between 5.03 and 5.34 million annual sales, up 2.9 percent from april and 5.8 percent from May 2014.

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