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US home prices rise in May

By Alan Rappeport

US house prices showed their first monthly gain in three years in May offering another sign that the stricken residential real estate market is stabilising.

Home prices unexpectedly climbed by 0.5 per cent from April to May, but were off by 17.1 per cent year-on-year, according to the closely watched Case-Shiller index, released on Tuesday. The monthly rise was the first since prices peaked in July 2006, while the annual drop marked the fourth straight month that the rate of decline slowed after 16 consecutive months of record falls.

“To put it in perspective, these are the first time we have seen broad increases in home prices in 34 months,” said David Blitzer, chairman of the index committee at Standard and Poor’s, which publishes the Case-Shiller results. “This could be an indication that home price declines are finally stabilizing”.

June new home sales up 11%, largest amount in 9 years

By Alan Zibel

The government says new U.S. home sales rose by the largest amount in nearly nine years last month, in another sign the housing market is finally bouncing back from the worst downturn in decades.

The Commerce Department says sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000.

It was the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000.

Sales have risen for three straight months. The median sales price of $206,200, however, was down 12 percent from $234,300 a year earlier.

June national existing home sales rise by 3.6 percent

By Alan Zibel

WASHINGTON - Signaling a housing recovery is under way in much of the country, sales of previously occupied homes rose for the third month in a row in June.

The National Association of Realtors said Thursday that home sales rose 3.6 percent to a seasonally adjusted annual rate of 4.89 million last month, from a downwardly revised pace of 4.72 million in May. Home sales haven't risen for three straight months since early 2004, during the housing boom.

"The housing market is healing," said Lawrence Yun, the group's chief economist.

Prices, however, are expected to keep falling well into next year because of a backlog of foreclosures that have yet to come on to the market. The median sales price was $181,800 in June, down 15 percent from year-ago levels but up slightly from $174,700 in May.

It was the highest level of sales since last October and beat economists' expectations. Sales had been expected to rise to an annual pace of 4.84 million units, according to Thomson Reuters.

The inventory of unsold homes on the market fell to 3.8 million. That's a 9.4-month supply at the current sales pace and another important sign of a recovery. When the inventory level falls to about 7 months, prices should begin to stabilize, Yun said.

Sales of foreclosures and other distressed properties made up about a third of all transactions last month, down from nearly half earlier this year.

For more people, scales tip toward buying a home

By ALEX VEIGA, AP Real Estate

For Aaron Carter, a musician who was struggling to fit a drum set, a piano and three guitars into his 600-square-foot apartment in Phoenix, the math on owning a home finally began to work in his favor.

Rent for the apartment he shared with his wife: $615. Mortgage payment for a home with twice the space: $760. And the interest on a mortgage is tax-deductible. So they jumped at the chance to buy some elbow room.

"We figured that everything together, getting more space, getting out of the apartment life and also just the prices right now, it just was the perfect time for us as a couple" to buy, said Carter, 20.

For Americans debating whether to buy or rent their homes, the scales are tipping toward ownership. Because of the slide in home prices, low interest rates and tax incentives, renters are realizing they could handle a mortgage for a just little more money.

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June Housing Construction Rises

WASHINGTON – Construction of new U.S. homes rose in June to the highest level in seven months, a sign builders are starting to regain confidence as they emerge from the housing bust.

The Commerce Department said Friday that construction of new homes and apartments jumped 3.6 percent last month to a seasonally adjusted annual rate of 582,000 units, from an upwardly revised rate of 562,000 in May.

That was better than the 530,000-unit pace economists expected, and the second straight increase after April's record low of 479,000 units.

In another encouraging sign, applications for building permits, seen as a good indicator of future activity, rose 8.7 percent in June to an annual rate of 563,000 units. Economists polled by Thomson Reuters expected an annual rate of 520,000 units.

The jump in housing starts reflected a more than 14 percent rise in construction of single-family homes.

Over the past three years, the collapse in the housing market led to soaring loan losses, a severe banking system crisis and the longest recession since World War II. Even with the better-than-expected figures, analysts don't expect a quick rebound in housing. That's because the economy is still shedding jobs and home prices are falling, making people hesitant to commit to buying a new home.

The National Association of Home Builders said Thursday that its housing market index rose two points to 17 in July, the highest level in nearly a year. Readings below 50 indicate negative sentiment about the market. The last time it was above 50 was April 2006.

While housing normally leads the economy out of a recession, a glut of unsold homes and a record wave of mortgage foreclosures dumping more properties on the market is expected to temper demand. Despite the rise in housing construction for June, activity still was 46 percent below the year-ago level.

More Homes Within Reach of First Time Buyers

By Jamie Smith Hopkins

If you wanted to buy a home for less than $250,000 three years ago, three-quarters of the market in the Baltimore metro area was out of your price range.

Then sellers got walloped. Housing slump. Mortgage meltdown. Recession.

Now you under-$250,000 buyers - classic first-time home purchasers - have a lot more to choose from.

Properties with asking prices in that range made up 43 percent of the metro area's housing market in May, up from 24 percent in May 2006. More under-$250,000 homes were for sale at the end of May - 8,149 - than in any previous May since 2001, according to a Baltimore Sun analysis of Metropolitan Regional Information Systems data.

"It's really opened up," said Bob Lucido, president of the Bob Lucido Team with ReMax Advantage Realty in Howard County. In some cases, "first-time buyers are able to get single-family homes as their first home because prices have come down."

Better affordability is good news not only for buyers but the housing market, which has suffered from a domino effect after Baltimore metro area prices practically doubled earlier in the decade. When first-timers can't buy, people in starter homes can't sell - which means they can't buy bigger homes, and the owners of those homes can't buy anything else either. Sales have plummeted in the metro area since the end of 2005. Thousands of homes have simply been sitting on the market.

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Area condo sales are on the rise

By Lorraine Mirabella

Patrick Turner can tell when a prospective home buyer is probably not a Silo Point buyer.

Sometimes, it's the questions the buyer asks. Turner, developer of the industrial grain elevator-turned high-rise condos in Locust Point, recalls the woman who observed the gritty and imposing exposed concrete columns in one luxury unit and asked, "Will these be painted?"

Turner believes he achieved his goal of building an ultra-hip residential tower on the water's edge that would preserve vestiges of the industrial past - the original 1923 structure once stored and weighed tons of grain. Still he admits his vision of loft-living in the sky isn't for everyone. And he acknowledges it's not a particularly optimal time to be opening.

"This is one of the worst economies to be selling residential real estate - unless you're selling at the right price," said Turner, president of Baltimore-based Turner Development Group.

Once bloated housing prices may finally have fallen enough to start pulling buyers back into a sluggish market. Some economists say the market has reached bottom, with plummeting prices making homes more affordable. Now, experts are seeing some improvement in sales of new condos as well.

From April through June, 35 new condos sold in Baltimore, compared with just nine in the second quarter of last year, according to Delta Associates, which tracks regional condo sales. The latest figures also show an improvement from the first quarter of this year, when contract cancellations in the city outpaced sales.

In the Baltimore region, including the city and Baltimore, Harford, Anne Arundel and Howard counties, sales of new condos rose to 162 from 59 a year earlier, Delta said in second-quarter numbers released July 2. The second quarter's sales were the most for any single quarter in the past two years, said William Rich, a Delta vice president.

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Area home sales rise - first time since Jan. '07

By Jamie Smith Hopkins

Home sales in the Baltimore metro area rose last month for the first time since January 2007, numbers released Friday morning show.

Residents sold 2,375 homes last month, up 2 percent from a year earlier, according to multiple-listing service Metropolitan Regional Information Systems. Every jurisdiction in the metro area saw an increase except Baltimore, where sales slipped 1 percent -- still a big improvement over the month before.

Average prices continued to fall, down 10 percent across the metro area.

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Rental housing affordability worsens nationwide

Associated Press

The financial plight of the nation's 34 million renters has deteriorated rapidly since the beginning of the decade, yet they are rarely included in conversations about housing affordability.

Half of all renters now spend at least 30 percent of their before-tax income on rent and utility payments, that's up from about 40 percent of renters in 2000, according to an analysis by the Associated Press. One in four uses more than half of their income to cover those expenses, up from one in five.

And the AP's analysis of census data through 2007, the latest available, doesn't include the effects of the recession, which hammer renters harder than homeowners. Tough economic times also disproportionately affect minorities and the less educated - both groups are more likely to be financially burdened renters.

The median rent, including utilities, rose 7 percent, to $775, between 2000 and 2007. But the increase felt worse because renters saw their median income drop 7 percent, to $29,000, during that time.

Government funding for renter assistance has been stagnant since 2000. At the same time, the number of affordable apartments has been shrinking and the cost of building new ones rarely pencils out.

During the past six years, about 3 million affordable apartments were destroyed, converted to for-sale condos or upgraded to higher-priced rental units, according to census data released last week.

The waiting lists for Housing Choice vouchers, formerly known as Section 8, are years long in many cities. The program currently serves 2 million families. Renters in this program put 30 percent of their income to rent and the voucher makes up the difference. As the economy worsens, voucher recipients are contributing less money. The program must make up the difference, which means reducing the number of new recipients, said Donna White, spokeswoman at the Housing and Urban Development Department.

The National Housing Trust Fund created last July to increase the supply of affordable housing remains empty. Funds were supposed to come from Fannie Mae and Freddie Mac, but the government has had to give them $85 billion to keep them afloat.

Baltimore Still Losing Population

By Olivia Bobrowsky Baltimore Sun reporter

Baltimore's population continues to drop, losing 3,231 people during the year that ended July 1, 2008, according to new census estimates released Wednesday.

Except for a small uptick in 2006, the city's population has been on a half-century decline. The most recent census figures put Baltimore's population at 636,919.

The number is an estimate, calculated by using data from the 2000 census and taking into account births, deaths and immigration.

City leaders have annually disputed the census' initial estimates, arguing the numbers are too low. The preliminary count for 2007 was 637,455, but the bureau readjusted the figure to 640,150. This year, Mayor Sheila Dixon said, she will appeal again.

"The census is one of the most important issues in our city," she said. "Every dollar we get for our viable services is [attributed] to the number of people in the city."

When any jurisdiction challenges the bureau, demographers re-calculate, figuring in data such as construction permits and housing occupancy rates.

Other jurisdictions in Maryland, however, are growing, according to the census bureau estimates. Baltimore County gained 212 people, reaching 785,618.

As in 2007, Howard County boasted the largest population growth in the Baltimore region, increasing by 2,384 people to reach 274,995 in 2008. Anne Arundel County added 2,283 to hit 512,790.

Prince George's County was again the only Maryland jurisdiction to lose more people than Baltimore, with a decrease of 4,466 people for a current estimated population of 820,852.

Maryland's population as a whole is also growing, although slowly. The state increased by 14,698 people to the new high of 5,633,597, becoming the 44th fastest-growing state between 2007 and 2008.