Below are the highlights from the May numbers:
- After rising for two months, new home sales plunged 33% over the month to a seasonally adjusted annualized pace of 300,000 units. May’s sales pace set a new cyclical low and was 18% below the sales pace in May of last year. Based on the most recent indications of mortgage applications, it is likely that the June sales number will also prove to be quite weak.
- Existing homes sales fell back 2.2% in May to an annualized rate of 5.66 million units. As sales declined, the inventory rose to 9.5 months supply of homes. The supply of housing inventory will have to decline before prices can be certain to have bottomed out.
- In May, housing starts plunged 10% to an annualized pace of 593,000 units. This brings the rate down to its lowest level since December. Following the expiration of the credit, demand has fallen off. Single family starts fell by an even larger 17% in May. In contrast, the far more volatile multi-family component jumped 33%.
- The OCC/OTS Mortgage Metrics Report found that the delinquency rates fell in all mortgage categories—prime, Alt-A, and subprime during the first quarter. Additionally, the delinquency rates fell for all pre-foreclosure stages. However, the rate of foreclosures rose during the quarter as servicers exhausted options to assist seriously delinquent mortgage holders and these mortgages graduate through the foreclosure stages.
- The number of home retention actions increased 6% in the first quarter after a decline in the quarter before – the growth was due to a rapid jump in HAMP modifications. The OCC/OTS report found that so far 2009 vintage modifications (52%) have responded with a higher level of loans remaining “current” than 2008 vintage modifications (27%). Additionally, HAMP modifications after 60 days have a lower level of delinquency (7.7%) relative to other types of modifications after the same number of days (11.3%).
The Housing and Mortgage Market Trend Sheet, located in the "OCE Documents of Interest" column at the right, is now updated with May figures. The trend sheet includes sales, pricing, construction, underwriting and delinquency data.