U.S. homebuilding starts stall, home prices continue to slide, as investors rush to buy remaining low-end distressed properties

Audrey Dixon

LOS ANGELES , March 26, 2012 (Industry Intelligence) –

U.S. homebuilding is stalled or headed for another relapse, with home prices continuing to fall as distressed properties at the low end remain for sale, according to market sources, CNBC-TV reported March 26.

Homebuilder sentiment doubled in six months and expectations for recovery were strong. But analysts and the stock market were disappointed last week on the release of new housing data.

The S&P/Case-Shiller home price index expected Friday has not been improving as much as home sales, CNBC-TV reported.

Housing starts, homebuilder earnings and sales of newly built home all fell, while analysts had looked for a minor gain instead. Sales of homebuilders' stocks abruptly halted in March after confidence fell. number of pending home sales fell half a percentage point month-to-month.

March is looking like the weakest month for buyer interest since last October, said a New Jersey Realtor after reviewing the month's buyer clicks and Google analytics, CNBC-TV reported.

Multifamily housing starts, particularly in rentals, showed more gains, in contrast to recovery in the rest of the industry, and rents continue to rise.

Last year, foreclosures stalled, leaving investors few distressed properties to buy, until those sales picked up again in late fall. Distressed property sales rose to a near-record 48.7% in February on a three-month moving average, said Campbell/Inside Mortgage Finance in a report Tuesday.

Investors now form a quarter of the market and are moving into more short sales. Typical buyers of new homes are not moving strongly back into the market and new mortgages are at a 12-year low, CNBC-TV reported.

Some industry members had thought an uptick in homebuilding starts earlier this year was kicked off by a mild winter. However, homes continue to sell at the rate of the mid-1990s, according to the monthly report from Mark Zandi of Moody’s Analytics. The fundamentals of home sales may be too weak to maintain a long improvement in home prices, Zandi said.

The primary source of this article is CNBC-TV, Englewood Cliffs, New Jersey, March 26, 2012.
 

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