Housing and Economy Market Trends

Housing and Economy
Market Trends
Mainstreet Organization
Prices of single-family, detached homes in suburban
Chicago increased 12.1 percent in May 2014
compared with the same period a year ago.
“Overall, we are seeing many positive indicators
for the suburban housing market: good prices,
multiple offers and inventory levels that have
begun to stabilize in some areas,” said Michael
Parent, president of MORe.
MORe news release 6-20-2014
Illinois Home Sales
Illinois home sales are lower than last year, but
edging up when comparing month-to-month.
Statewide home sales were down 9.4 percent
annually in May, but are up 16.4 percent compared
to April 2014. Inventory, which has been an issue in
recent months, is beginning to climb, giving buyers
more potential properties to consider.
IAR Reports: June 23, 2014
Illinois Association of REALTORS
Reports/U of I REAL
continue to increase on a month-to-month basis although
they have been unable to match the stellar gains of last year.
The impact of foreclosures continues to decrease with the
expectation that the numbers of foreclosed properties on the
market will return to pre-recession levels sometime in the next
6-12 months. Homeownership rates for retiring Baby Boomers
continue to increase providing some potential medium-term
housing market growth opportunities," said Geoffrey J. D.
Hewings, Director of the Regional Economics Applications
Laboratory of the University of Illinois.
IAR June Housing Price Forecast
U of I REAL/IAR June Housing Price Forecast
Foreclosure Activity in Chicagoland
In May 2014, 2,113 houses were newly filed for
foreclosure in the Chicago PMSA (down 42.7%
and 23.7% respectively from a year and a
month ago). As of May 2014, there were 24,469
homes at some stage of foreclosure.
REAL/IAR June 2014 Forecast
Realty Trac Foreclosure Activity
Illinois foreclosure activity decreased 23
percent on a year-over-year basis in May, but
two consecutive months with annual increases
in REO activity boosted the state’s foreclosure
rate to fourth highest nationwide in May. One in
every 790 Illinois housing units had a
foreclosure filing for the month.
 U.S. foreclosure filings were down 5% compared
to April and down 26% from last May.
Realty Trac news release 6-8-2014
Midwest Real Estate Data LLC
New Listings in Chicagoland were up 13.6 percent for
detached homes and 7.7 percent for attached
Listings Under Contract Increased 10.7% for detached
homes and 10.3% for attached properties.
Months Supply of Inventory decreased 9.6% for
detached units and 20.1 percent for attached units.
May 2014 MRED report
Statewide Unemployment Trends
The Statewide Unemployment Rate Fell for the Third
Consecutive Month to 7.5% in May and is at the
lowest level since November 2008.
IL May Unemployment Rate
The largest increase in job growth in May
was Lake-Kenosha (+2.0%)
Chicago Federal Reserve Bank
"The economy is forecasted to grow at a solid pace
in 2014 and at a somewhat faster pace in 2015.
The growth rate of real GDP is predicted to be 2.3%
in 2014 and 2.8% in 2015. The housing sector is
predicted to continue to improve over the forecast
horizon. Real residential investments is anticipated
to expand at a rate of 5.4% in 2014 and at a rate of
7.5% in 2015.”
Chicago Fed Letter, July 2014, William A. Strauss, Senior Economist, Federal
Reserve Bank of Chicago.
Freddie Mac
Most housing markets remain weak despite
declining mortgage delinquencies, improving
local employment, house price gains and
attractive mortgage rates due to weak home
purchase mortgage applications. Illinois was
included in the five most improving states
month-over-month (+0.12)
June 25,2014 Freddie Mac Multi-Indicator Market Index
Freddie Mac
Fixed mortgage rates are officially lower than last year's
levels, when Fed remarks spurred market speculation
that it could begin tapering its bond purchases causing
mortgage rates to spike. The 30-year fixed rate
mortgage was 4.15 percent for the North Central Region
for week of 6/26. We expect fixed rates to rise
gradually during the second half of the year in part as a
result of the Federal Reserve's "tapering" of net
mortgage-backed securities acquisitions.
(Freddie Mac US Economic and Housing Outlook 6/18 and Fixed Rate
Mortgage Release 6/26/2014 –)
Fannie Mae Reports
Economic activity contracted in the first quarter of
2014, weakening the odds that full-year growth will top
last year's pace, according to Fannie Mae's Economic &
Strategic Research Group. "We remain confident that
the first-quarter drop in activity will reverse, and we
are seeing some positive signs in the current quarter,
but economic growth likely will be playing catch-up for
the rest of the year," said Fannie Mae Chief Economist
Doug Duncan.
6/24/2014 Fannie Mae release
National Association of REALTORS
"Rising inventory bodes well for slower price growth
and greater affordability, but the amount of homes for
sale is still modestly below a balanced market.
Therefore, new home construction is still needed to
keep prices and housing supply healthy in the long
run," said Lawrence Yun, chief economist for NAR.
First-time homebuyers represented less than one-third
of all buyers at 27% in May.
6/23/2014 NAR release
NAR Housing Market Forecast
NAR Housing Market Forecast, 6/30/14
NAR Pending Home Sales
“Sales should exceed an annual pace of five million
homes in some of the upcoming months behind
favorable mortgage rates, more inventory and improved
job creation,” said Lawrence Yun, chief economist for
the National Association of REALTORS. “However,
second-half sales growth won’t be enough to
compensate for the sluggish first quarter and will likely
fall below last year’s total.”
NAR May Pending Sales Index Report 6/30/2014
National Association of Home Builders
Sales of newly built, single-family homes rose
18.6 percent to a seasonally adjusted annual
rate of 504,000 units in May, according to newly
released data by the U.S. Department of
Housing and Urban Development and the U.S.
Census Bureau. This is the highest rate since
May 2008.
6/24/14 National Association of Home Builders news release
Case-Shiller Home Price Index
“Near term economic factors favor further gains in
housing: mortgage rates are lower than a year ago,
the Fed is expected to keep interest rates steady
until mid-2015 and the labor market is improving.
However, housing is not back to normal: prices are
being supported by cash sales, low inventories and
declining foreclosure and REO sales. First time home
buyers are not back in force and qualifying for a
mortgage remains challenging. The question is
whether housing will bounce back before the Fed
begins to tighten sometime next year," says David M.
Blitzer, Chairman of the Index Committee at S&P Dow
Jones Indices.
S&P Indices/Case-Shiller Home Price Indices 6/24/14
Consumer Confidence Index
The Conference Board Consumer Confidence Index®, which
had increased in May, improved again in June. The Index now
stands at 85.2 (1985=100), up from 82.2 in May.
Lynn Franco, Director of Economic Indicators at The Conference
Board: “Consumer confidence continues to advance and the
index is now at its highest level since January 2008 (87.3).
June’s increase was driven primarily by improving current
conditions, particularly consumers’ assessment of business
conditions. Expectations regarding the short-term outlook for
the economy and jobs were moderately more favorable, while
income expectations were a bit mixed. Still, the momentum
going forward remains quite positive.”
6/24/2014 Conference Board Consumer Confidence Index
Thomson-Reuters University of
Michigan Consumer Survey
More consumers reported that their financial situation had
improved in the June Thomson-Reuters/University of Michigan
survey of consumers.
The June consumer sentiment index stood at 82.5 higher than the
weaker 81.9 in May. June of last year it was 84.1.
Consumers are less optimistic about their future financial
prospects. Just one-in-four households expected their finances to
improve in the year ahead.
Half of all households anticipate declining living standards.
(6-27-14—Survey of Consumers-Thomson Reuters University of MI)