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Market Data: KB Home earnings fall but see increased orders Economy: Mortgage applications experience ease Financing: 30-year mortgage rates drop to record low Legal Notes: Bank of America expected to settle lending claims Senior Housing: Retirement communities forced to help boomers sell their homes
New home sales rise to seven-month high as supply falls to 5.5-year low in November New U.S. single-family home sales rose to a seven-month high in November and the months' supply of houses on the market was the lowest in 5-1/2 years, adding to signs of a budding recovery in the sector. The Commerce Department said sales rose 1.6 percent to a seasonally adjusted 315,000-unit annual rate. Octobers' sales pace was revised up to 310,000 units from the previously reported 307,000 units.Economists polled by Reuters had forecast sales at a 313,000-unit rate. In the 12 months through November, new home sales were up 9.8 percent.
Third quarter GDP revised down to 1.8 percent in third estimate from the BEA Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.8 percent in the third quarter of 2011 (that is, from the second quarter to the third quarter), according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.3 percent. The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 2.0 percent. The increase in real GDP in the third quarterprimarily reflected positive contributions from nonresidential fixed investment, personal consumption expenditures (PCE), exports, and federal government spending that were partly offset by negative contributions from private inventory investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased. FHFA Housing Price Index Down by 2.8% YOY in October, Nearly Matching February 2004 Levels U.S. house prices fell 0.2 percent on a seasonally adjusted basis from September to October, according to the Federal Housing Finance Agency's monthly House Price Index. The previously reported 0.9 percent increase in September was revised downward to reflect a 0.4 percent increase. For the 12 months ending in October, U.S. prices fell 2.8 percent. The U.S. index is 19.2 percent below its April 2007 peak and roughly the same as the February 2004 index level. Initial unemployment claims fall again in latest survey In the week ending December 17, the advance figure for seasonally adjusted initial claims was 364,000, a decrease of 4,000 from the previous week's revised figure of 368,000. The 4-week moving average was 380,250, a decrease of 8,000 from the previous week's revised average of 388,250. Leading Economic Index Rises by 0.5 percent in November The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.5 percent in November to 118.0 (2004 = 100), following a 0.9 percent increase in October, and a 0.1 percent increase in September. Says Ataman Ozyildirim, economist at The Conference Board: "November's increase in the LEI for the U.S. was widespread among the leading indicators and continues to suggest that the risk of an economic downturn in the near term has receded. Interest rate spread and housing permits made the largest contributions to the LEI this month, overcoming a falling average workweek in manufacturing, which reversed its October gain. The CEI also rose on improving employment and personal income although industrial production fell in November." Says Ken Goldstein, economist at The Conference Board: "The LEI is pointing to continued growth this winter, possibly even gaining momentum by spring. For the second month in a row, building permits made a relatively strong contribution and there is a chance that the long decline in housing is finally slowing. However, this somewhat positive outlook for the domestic economy is at odds with a global economy that appears to be losing steam. In particular, a deeper-than-expected recession in Europe could easily derail the outlook for the U.S. economy." Univ. of Michigan report shows improving consumer sentiment but political deadlock hurts consumer spending Consumer confidence continued to improve in December for the fourth consecutive month. The December gain primarily reflected more positive expectation for the economy in 2012. Importantly, consumers more frequently reported hearing news about employment gains in the December survey. Unfortunately, consumers did not assess their personal finances more positively, with recent income declines being reported twice as frequently as income increases. While the December survey recorded the most optimistic expectations for the national economy since August, income changes were reported to be the worst since last Spring. Assuming the payroll tax cut will be passed and made retroactive to the start of 2012, the data indicate that inflation-adjusted personal consumption expenditures will rise by 1.8 percent during 2012. Personal income and consumer spending post modest gains in November Personal income increased $8.5 billion, or 0.1 percent, and disposable personal income (DPI) decreased $5.0 billion, or less than 0.1 percent, in November, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $13.1 billion, or 0.1 percent in November. In October, personal income increased $47.2 billion, or 0.4 percent, DPI increased $27.2 billion, or 0.2 percent, and PCE increased $11.3 billion, or 0.1 percent, based on revised estimates. PCE price index -- The price index for PCE decreased less than 0.1 percent in November, compared with a decrease of 0.1 percent in October. The PCE price index, excluding food and energy, increased 0.1 percent in November, the same increase as in October. Durable goods orders rise in November, but core demand remains weak New orders for manufactured durable goods in November increased $7.5 billion or 3.8 percent to $207.0 billion, the U.S. Census Bureau announced. This increase, up four of the last five months, followed a slight October increase. Shipments of manufactured durable goods in November, down two of the last three months, decreased $0.8 billion or 0.4 percent to $202.8 billion. This followed a 1.5 percent October increase. Inventories of manufactured durable goods in November, up twenty three consecutive months, increased $2.0 billion or 0.6 percent to $368.8 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.4 percent October increase. The MetroIntelligence Economic Update is provided to BuilderBytes by MetroIntelligence Real Estate & Economic Advisors.
Existing homes sold since 2007 revised down 
BloombergSales of existing homes in the U.S. rose in November to a 10-month high, showing demand may be starting to stabilize following a plunge over the past four years that was steeper than previously calculated. Purchases climbed 4 percent to a 4.42 million annual pace, the most since January, the National Association of Realtors said. The group revised down figures going back to 2007 by an average 14 percent, putting them more in line with other measures of demand. “Perhaps signs of life are increasing for the housing market,” said Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. “Housing is finally not going to be a drag on economic growth in 2012…” KB Home earnings fall but see increased orders Los Angeles Times KB Home posted lower earnings in the fiscal fourth quarter compared with a year earlier as the company sold fewer homes in higher cost areas. But another development signaled some cause for optimism: New orders for homes from the company grew. The company reported net income of $13.9 million, or 18 cents a share, for the three months ending Nov. 30. That compared with $17.4 million, or 23 cents, during the same period a year earlier. "We believe these results demonstrate our success in adapting to current market realities and positioning our business for the future,” Chief Executive Jeffrey Mezger said. Revenues in the fourth quarter grew 6 percent over the previous year to $479.9 million, and net orders increased 38 percent to 1,494. Bay State home sales up with decreased prices 
Boston Business JournalSales of single-family homes in the Bay State rose in November, the fifth-straight month of year-over-year increases, according by The Warren Group, publisher of Banker & Tradesman. November single-family home sales increased to 3,253 from 2,875 during the same month last year, a 13 percent hike. But the good news is tempered by the fact that home sales have sunk to their lowest levels in recent months. The past two Octobers have been the worst on record since October 1990. “I’m hopeful that winding down the year on a positive note will stimulate the market in 2012,” said Warren Group CEO Timothy Warren Jr. November also recorded the fewest number of homes sold statewide since April. Florida’s existing home and condo sales up in November PRNewswire Florida's existing home and existing condo sales continued its positive upswing in November, according to the latest housing data released by Florida Realtors. Existing home sales increased 11 percent last month with a total of 12,993 homes sold statewide compared to 11,664 homes sold in November 2010, according to Florida Realtors. Florida Realtors Chief Economist Dr. John Tuccillo said, "…Sales are moving upward – not by a large increase, but definitely, positively on an upward trend. Second, prices are stabilizing. Now, it doesn't mean that prices have turned around but they are stabilizing, and that's vital for the market to gain equilibrium.” Seventeen of Florida's metropolitan statistical areas (MSAs) reported higher existing home sales in November while 10 MSAs had higher existing condo sales. Home foreclosures jumped in third quarter 
Los Angeles TimesNewly initiated home foreclosures by the large national banks increased 21.1 percent in the three months ending Sept. 30 as mortgage servicers lifted voluntary holds on such activity because of paperwork problems, the Office of the Comptroller of the Currency reported. The jump from the second quarter of the year came as the number of homeowners who were delinquent on their mortgages remained stable, although still high, the OCC said in its quarterly Mortgage Metrics Report. The report has data from eight large national banks, including Bank of America, JPMorgan Chase and Wells Fargo, as well as One West Bank federal savings association, which account for about 62 percent of all first mortgages in the country.
60 homeless families in San Francisco to receive homes Business Wire Hamilton Family Center, the largest provider of housing services for homeless families in San Francisco, has received two commitments to help resolve the record levels of homelessness among families in the city. The first gift, $850,000 from Marc and Lynne Benioff via the Salesforce.com Foundation, will be matched by the Mayor’s Homeless Fund, which plans to provide $483,167. Upon learning the number of homeless families in San Francisco has met an all-time high, Salesforce.com founder Marc Benioff and wife Lynne decided to donate $1.5 million to local San Francisco nonprofit agencies to get families into housing as quickly as possible. In response to the Benioff’s generous donation, the Mayor’s Office of Housing is allocating more than $800,000 for the same purpose. Affordable housing complex experiences difficulty 
Washington Business JournalThe Lincoln-Westmoreland apartment complex expansion long slated next to the Shaw Metro station, is being held up by a land rights issue between Lincoln-Westmoreland Inc., and the Washington Metropolitan Area Transit Authority. Construction of the 56-unit complex, owned by the Westmoreland Congregational Church and designed by Shalom Baranes Architects, necessitates the purchase of "air rights" for a small, 400-square-foot sliver of land presently owned by WMATA. Lincoln-Westmoreland Inc., sold this sliver of land to WMATA in the 1960s but said WMATA is now holding out for "fair market value."
Mortgage applications experience ease 
CNBCApplications for U.S. home mortgages slipped, led by a drop in purchase demand as low interest rates were not enough to entice homebuyers, an industry group said. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 2.6 percent in the week ended Dec 16. The MBA's seasonally adjusted index of refinancing applications dipped 1.6 percent, while the gauge of loan requests for home purchases lost 4.9 percent. "Remarkably low rates are not enough, as many homeowners continue to hold back due to lack of equity in their properties, poor credit and a weak job market," Michael Fratantoni, MBA's vice president of research and economics, said.
30-year mortgage rates drop to record low 
BloombergMortgage rates for 30-year U.S. loans dropped to the lowest level on record amid signs the housing market may be set for a turnaround. The average rate for a 30-year fixed loan fell to 3.91 percent, the lowest in data dating to 1971, from 3.94 percent, Freddie Mac said. The average 15-year rate matched the previous all-time low of 3.21 percent. The U.S. housing market, under pressure from tight lending standards and foreclosures that depress values, is showing signs of improvement. Purchases of previously-owned homes rose to a 10-month high in November as the inventory of unsold properties shrank to the lowest level in six years, the National Association of Realtors reported. Mortgage re-defaults fall in third quarter Bloomberg Homeowners whose mortgage payments were changed under a program aimed at reducing foreclosures re-defaulted at a slower rate after lenders gave more generous modifications, the U.S. Comptroller of the Currency said. About 18 percent of modified loans were at least 90 days delinquent within a year in the third quarter, compared with 20 percent in the previous three months, according to the Comptroller’s “Mortgage Metrics Report.” Delinquencies for loans 30 to 59 days late decreased 3.3 percentage points from the previous quarter, to about 34 percent. Modifications implemented during the first quarter of 2011 defaulted at a higher rate than modifications from the previous two quarters because the payments weren’t lowered as much, according to the report.
Desert Crest Development proceeds in California PRNewswire Eco Building Products, Inc., announced that the Desert Crest Development in West Lancaster, Calif., is now ready to proceed with construction of four models in first quarter 2012. ACS Development Corp. plans to build four model homes with production units to follow shortly after. Desert Crest is a unique project consisting of two phases, representing over $1.2 million in additional contract orders to the company for 2012. The first phase is twenty-two homes ranging from 2,100 to 2,700 square feet with a targeted sales price from the low 300,000 with expectations to sell out the first phase within six to eight months. All homes are being designed and certified as a green development with integration of solar panels and other technically-advanced building materials. Construction began on 'near zero' net energy homes 
Sentinel & EnterpriseThe foundations have been set for a 12-unit, "green" townhouse complex designed to produce almost all the energy one needs to live in it, including the power to heat the homes in the dead of winter. Rep. Jennifer Benson, D-Lunenburg, said the energy-efficient features of the "affordable" townhouses being developed by Metric Corp., of Boston will help residents cut spending on utilities. "It's not only affordable at the onset of the purchase, but also for the future of the family," Benson said of the complex. Officials from MassDevelopment and those involved in the agency's zero net-energy-housing projects celebrated the groundbreaking of Metric's "super-energy efficient" townhouses at a 1.2-acre lot. Each of the 12 units will have two bedrooms.
Alexandria City Council approves Arlandia development 
Washington Business JournalA last-ditch effort by poor and working-class Hispanic residents to stop the construction of a 478-unit apartment complex in the Arlandia neighborhood has failed as the Alexandria City Council approved plans for the development, The Washington Post reported. Residents argued that they had no knowledge of the development until it was too late to do anything by protest against the project, which they fear will drive up area rental rates. The planned six-story complex, with retail on the ground floor, will replace a strip shopping center and a surface parking lot.
Bank of America expected to settle lending claims 
Los Angeles TimesThe Justice Department is expected to announce a settlement with Bank of America Corp. that resolves accusations that its Countrywide Financial unit engaged in discriminatory mortgage-lending practices, according to a person familiar with the matter. Bank of America, which acquired Countrywide during the financial crisis, is expected to pay a sizable cash penalty as part of the deal. The government began to look into Countrywide's lending practices to minorities in 2004, well before Bank of America’s acquisition four years later. The investigation centered on allegations that Countrywide charged excessive interest rates, fees and other mortgage-related costs to African American and Latino home buyers.
Retirement communities forced to help boomers sell their homes 
Senior Housing NewsWhen the housing crisis hit, many older Americans found themselves in a bind as they were unable to sell their homes and move into a retirement community. In 2010, Sun Health, the nonprofit operator of La Loma rolled out a series of programs to help residents fill up their apartments by assisting potential residences with the sales of their homes. If the company couldn’t sell the property within 90 days, La Loma would buy the home at a market rate. For those seeking to sell a home in order to move into a continuing-care community or similar retirement residence, help is increasingly available. Owners and operators of such developments are stepping forward with home staging and repair programs, no-interest bridge loans, buyouts and reduced entrance fees.
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