Home Price Appreciation Has Peaked -Poll

In a poll of 31 property analysts Reuters news agency found consensus that the growth of house prices in the U.S. has peaked and that further increases over the next two years will be more restrained.  The analysts' predictions centered on a median 7.5 percent increase this year and a gain of only 4.0 percent by 2016.

Reuters says this is a significant slowdown from the 12.4 percent jump in home values over the 12 months ended in March that was recently reported by the S&P/Case Shiller 20-City Composite Index.   The rate of increase has recently slowed from that which occurred in the earlier months of that timeline.   

(Read More: Three Data Sets Concur on Continuing but Slower Price Increases)

The analysts agreed that further price increases will likely be curbed by tight lending standards, slow wage growth, and a lack of first-time buyers, a group that might be further restrained by those factors.  

Results of the poll also included a consensus that home resales would reach a 4.75 million annual rate in the second quarter of 2014 and would continue that upward trajectory, reaching 5.10 million sales by the first quarter of next year.  Resales were at an annual rate of 4.65 in April.

Among the questions the poll put to respondents was whether the U.S. housing market was fairly valued.  On a scale of one to 10, ranging from extremely undervalued (one) to extremely overvalued responses were termed by Reuters as fairly conservative, ranging between 3 and 7.5.

Reuters said the housing market lost some of its momentum in late 2013 and early 2014 as mortgage rates rose and unusually cold weather caused the economy to contract by an annual rate of 1 percent in the first quarter and residential investment to drop by an annual rate of 5 percent.

Reuters said that more first-time homebuyers would mean more robust growth but that much would also depend on interest rates.  Currently the average 30-year fixed rate is a little over 4 percent and is expected to rise to 4.5 percent this year and to 5.68 percent in 2016.

With Decline in Foreclosures, CoreLogic Sees End in Sight

April saw a further improvement in late stage foreclosure activity CoreLogic reported on Thursday.  Both completed foreclosures and the number of properties in the process of foreclosure declined by double digits from levels in April 2013, and both categories were down slightly from March.   The company's chief economist said the foreclosure pipeline could clear in a little more than a year.

Completed foreclosures numbered 46,000 nationally, down by 1,000 or 0.4 percent from March but 10,000 fewer than in April 2013, a year-over-year decrease of 18 percent.  With the exception of the District of Columbia, and New York every state posted double-digit year-over-year declines in foreclosures. CoreLogic said, as a basis of comparison that completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.  Since the financial crisis began in September 2008, there have been approximately 5 million completed foreclosures across the country.  

The foreclosure inventory, that is the homes in some stage of foreclosure, contained approximately 694,000 homes in April compared to 1.1 million in April 2013, a year-over-year decrease of 35 percent. The foreclosure inventory as of April represented 1.8 percent of all homes with a mortgage, compared to 2.7 percent in April 2013. The foreclosure inventory was down 4.7 percent from March 2014, representing the 30th month of year-over-year declines. Foreclosure inventories declined more than 30 percent year-over-year in 37 states and Arizona, Utah, Minnesota and California experienced declines greater than 50 percent.

"Over the last 12 months, completed foreclosures fell to 599,000, the lowest level since the Great Recession began in 2007," said Sam Khater, deputy chief economist for CoreLogic. "At the current pace of completed foreclosures, and given the current foreclosure inventory, it will take 14 months to move all of the foreclosed inventory through the pipeline."

The five states with the highest number of completed foreclosures for the 12 months ending in April 2014 were: Florida (121,000), Michigan (46,000), Texas (38,000), California (33,000) and Georgia (32,000).These five states account for almost half of all completed foreclosures nationally.

The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: New Jersey (6.0 percent), Florida (5.4 percent), New York (4.6 percent), Hawaii (3.1 percent) and Maine (3.0 percent).

Pending Home Sales Rise Less Than Expected

Pending home sales in April rose above those in the previous period for the second month in a row.  The National Association of Realtors® said that contract signings in April increased 0.4 percent from those in March, sending the NAR's Pending Home Sales Index to 97.8 from 97.4.  The Index is 9.2 percent lower than in April 2013 when it was at 107.7.  Economists surveyed by Reuters expected a 1.0 percent increase.

The Pending Home Sales Index (PHSI) is a forward looking indicator of home sales.  Contracts counted in the index are generally expected to close as sales within about 60 days.

Lawrence Yun, NAR chief economist, expects a gradual uptrend in home sales. "Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective home buyers' confidence," he said. "An uptrend in closed sales is expected, although some months will encounter a modest setback."

Contract signings increased in two of the nation's regions but remain below April 2013 levels in all four.  The PHSI in the Northeast was 79.3, 0.6 percent higher than in March but 12.0 percent below a year ago. In the Midwest the index rose 5.0 percent to 99.2 but is 6.9 percent below April 2013. Pending home sales in the South slipped 0.6 percent to an index of 111.9 in April, 6.4 percent below a year earlier, and the index in the West was 88.4 in April, down 2.9 percent and 15.0 percent from the two earlier periods.

Based on what it called sub-par activity in the first quarter, NAR is projecting that 2014 existing home sales will be modestly below the nearly 5.1 million sales in 2013, but should be close to 5.3 million in 2015. The national median existing-home price is projected to grow between 5 and 6 percent this year, and in the range of 4 to 5 percent in 2015.

Yun projects the 30-year fixed-rate mortgage to trend up and average 5.5 percent next year. "The extent to which higher mortgage interest rates will impact housing affordability and sales depends on income growth, ongoing improvement in the labor market and any change to mortgage underwriting conditions," he said.

The PHSI is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

Only 2 in 5 Housing Markets are Improving -Freddie Mac

Freddie Mac's new Multi-Indicator Market Index (MiMi) continues to show a weak housing market overall.  The national MiMi value is flat compared to last month and has improved only slightly year-over- year.

MiMi monitors and measures the stability of the nation's housing market, as well as the housing markets of all 50 states, the District of Columbia, and the top 50 metro markets. MiMi combines proprietary Freddie Mac data with current local market data to assess where each single-family housing market is relative to its own long-term stable range by looking at home purchase applications, payment-to-income ratios, proportion of on time mortgage payments in each market, and the local employment picture.

These indicators are combined into a composite MiMi value for each market. The MiMi value ranges between -12 and 12 and helps determine if a housing market is Weak, In Range, or Elevated relative to its own stable range of housing activity and whether the market is trending toward or away from that range   A market can fall outside its stable range by being too weak to generate enough demand for a well-balanced housing market or by overheating to an unsustainable level of activity.

The MiMi for March stands at -3.06 point, a 0.03 point improvement from February.  The three month trend for March is +0.05.  That value must move by at least one-tenth of a point or the associated directional trend for that market's three month period is considered flat. 

On a year-over-year basis, the U.S. housing market has improved by 0.66 points. The nation's all-time MiMi low of -4.49 was in November 2010 when the housing market was at its weakest.

Most of the states and metro areas are called "weak and flat" or "weak and declining" in the MiMi narrative.  Ten of the 50 states and the District of Columbia are in their stable range as are four of the 50 metro areas.  The top five states are North Dakota, Wyoming, the District of Columbia, Alaska, and Louisiana, all unchanged from last month and the four metros are San Antonio, New Orleans, Austin, and Houston. 

The states that were most improved from February to March were Ohio, Rhode Island, Illinois, Texas, and South Carolina while those that improved the most from March 2013 were Florida, Nevada, South Carolina, California, and Texas.  Improved metros on a month-over-month basis were Cincinnati, Columbus, Houston, Riverside, and San Antonio while year over year they were Miami, Orlando, Las Vegas, Tampa, and Riverside. Freddie Mac notes that most of the markets that are improving or in a stable range are areas currently in the midst of an energy boom.

Overall, in March, 13 of the 50 states plus the District of Columbia are improving based on their three month trend, and 20 of the 50 metros show an improving trend.

Freddie Mac Chief Economist Frank Nothaft said, "Less than half of the housing markets MiMi covers are showing an improving trend, whereas at this same time last year more than 90 percent of these same markets were headed in the right direction. We're hopeful that many of these markets that have stalled will start moving again now that mortgage rates have eased over the past month and the spring home buying season is upon us. House price gains are a double-edged sword at this stage of the recovery. They help those hard-hit markets where prices are still low and many homeowners are underwater, but in areas where supply is constrained, they're creating an imbalance and pricing out many first-time homebuyers."

The National Mimi and interactive indices for each of the states and metro areas can be accessed at http://www.freddiemac.com/mimi/.

Three Data Sets Concur on Continuing but Slower Price Increases

All three home price surveys released this morning showed prices increased in March, a more moderate improvement than in previous months in some cases, but still broad based.  The S&P Case-Shiller Home Price Indices, showed that prices increased month-over-month in 19 of the 20 cities it tracks, Black Knight in 49 states, and FHFA said 42 states and the District of Columbia posted increases in the first quarter of 2012.

The Case-Shiller 10 City Composite Index gained 0.8 percent in March and the 20-City was up 0.9 percent.  The quarterly National Index rose 0.2 percent in the first quarter of 2013.  San Francisco's HPI increased another 2.4 percent in March and Dallas and Denver set new index peaks with March increases of 1.2 and 1.4 percent respectively.  New York was the only city among the 20 to decline, posting a 0.3 percent drop, for March but all 20 cities had positive annual returns although 13 of the 20 posted lower annual returns in March than in February.

The annual gains in both the National and Composite indices slowed significantly.  The National Index gained 10.6 percent from March 2013 to March 2013 while the 10-City increased 12.6 percent and the 20-City 12.4 percent.  In the fourth quarter the National Index was up 11.3 percent on an annual basis while in February the 10-city and 20-City had annual increases of 13.1 percent and 12.9 percent respectively.  Chicago showed its highest year-over-year return since December 1988, 11.5%.  Las Vegas and San Francisco, the cities with the highest returns, saw their rates of gain slow to approximately 21%; their post-crisis peak returns were 29.2% and 25.7%. At the lower end was Cleveland with a gain of 3.9% in the 12 months ending March 2014.

The year-over-year changes suggest that prices are rising more slowly," says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. "Annual price increases for the two Composites have slowed in the last four months and 13 cities saw annual price changes moderate in March. The National Index also showed decelerating gains in the last quarter. Among those markets seeing substantial slowdowns in price gains were some of the leading boom-bust markets including Las Vegas, Los Angeles, Phoenix, San Francisco and Tampa.

Housing indicators remain mixed, Blitzer said.  "April housing starts recovered the drop in March but virtually all the gain was in apartment construction, not single family homes. New home sales also rebounded from recent weakness but remain soft. Mortgage rates are near a seven month low but recent comments from the Fed point to bank lending standards as a problem. Other comments include arguments that student loan debt is preventing many potential first time buyers from entering the housing market."

As of the first quarter of 2014, average home prices across the United States are back to the levels posted in the spring of 2004. At the end of the first quarter of 2014, the National Index was up 0.2% over the fourth quarter of 2013 and 10.3% above the first quarter of 2013. The two composite indices have returned to mid-2004 levels and measured from the June/July 2006 peaks are down approximately 19-20 percent and have recovered by about 24 percent from the March 2012 troughs. 

FHFA's HPI rose 0.7 percent from February to March compared to a 0.6 percent increase in January.  The annual increase was 6.5 percent.  As noted there were first quarter increases in the HPI in 42 states and the District of Columbia compared to increases in 38 states during the fourth quarter of 2013.  It was the 11^th consecutive quarter the FHFA HPI has increased and the monthly seasonally adjusted purchase-only index for the U.S. has increased for 23 of the last 24 months

The states with the strongest annual appreciation were Nevada, the District of Columbia, California, Arizona, and Florida.  Among the nine census divisions the Pacific Division had the strongest increase in the first quarter with a 2.1 percent increase and the region was up 13.2 percent from the previous year.  On the monthly basis however the Pacific region had only a 0.4 percent increase, well below the national average and the 4.6 percent jump in New England and 1.2 percent in the West North Central region.

There were first quarter price increases in 71 of the 100 metropolitan areas tracked by FHFA with the strongest increase, 10.7 percent, in the Charleston, South Carolina area and the weakest in New Orleans, down 2.6 percent.

Black Knight said that its HPI for the nation as a whole was $235,000 in March, a 1 percent increase from the previous month and 12.8 percent below the peak in the index, $269,000, reached in June 2006.   Colorado and Texas established new peak HPI's in March as they have done virtually every month since last summer.  

Michigan and the District of Columbia had the largest month-over month increases at 1.6 percent each, followed by four states, Washington, Oregon, Illinois, and Georgia that increased 1.5 percent.  Missouri and North Dakota were each up 1.3 percent and Minnesota and Nevada 1.2 percent. 

Connecticut was the only state where the HPI declined from February to March, a slight loss of 0.1 percent.  Three other New England states, while in positive territory, posted the worst performances in the country.  Rhode Island increased 0.1 percent, Vermont 0.2 percent, and New Hampshire 0.3 percent.

New Home Sales Rise to Slightly Less Depressed Levels

The U.S. Census Bureau and the Department of Housing and Urban Development said today that the sales of new single family homes in April were at a seasonally adjusted rate of 433,000, an increase of 6.4 percent from March sales of 407,000 (revised from 384,000).  The April figure is 4.2 percent below sales in April 2013. 

The revised March number, while still lower than sales in February, cuts the month-over-month loss from the 14.6 percent originally reported to 9.4 percent. Perhaps some kind of spring market has finally arrived, or perhaps sales are just sideways and stagnant overall. 

On a non-seasonally adjusted basis there were 41,000 new homes sold in April compared to 39,000 in March.  There were 192,000 homes available for sale at the end of the reporting period, a 3.5 year high, and a 5.3 month supply compared to 191,000 units in March, a 5.6 month supply.

The median price of a new home sold in April was $275,800 and the average price was $320,100.  One year earlier the median and average prices of home sold were $279,000 and $337,000.

New home sales in the Northeast were down dramatically, 26.7 percent lower than in March and 31.3 percent below sales one year earlier.  In contrast, sales soared in the Midwest, 47.4 percent above the previous month and 35.5 percent higher than in April 2013.  Sales in the South increased 3.1 percent month-over-month but fell 9.6 percent below the level the previous April.  Sales in the West were unchanged from April and 6.1 percent lower than the earlier period.

Mortgage Banking Profits Hit Hard in 2nd Half of 2013

Mortgage banks had what the Mortgage Bankers Association (MBA) termed "respectable" production profits in 2013, even though they were dramatically lower than in 2012 and declined precipitously from the first half of 2013 to the second. MBA's Annual Mortgage Bankers Performance Report said that banks responding to its survey posted average per loan profits of $1,252 in 2013 compared to $2,199 per loan originated in 2012.  Of the 242 firms that reported production, 73 percent were independent mortgage companies; the remaining 27 percent were subsidiaries of chartered banks and other non-depository institutions.

"Full-year 2013 net production profits were respectable," said Marina Walsh, MBA's Vice President of Industry Analysis.  "In fact, they were the second highest recorded since inception of the Performance Report in 2008.  However, net production profits in the second half of 2013 were substantially lower than those in the first half of 2013.  While secondary marketing gains remained relatively strong throughout the year, per-loan production expenses escalated in the second half of 2013."

Average production profit (net production income) was 61 basis points in 2013, compared to 108 basis points in 2012.  However that production income averaged 80 basis points in the first half of the year then dropped to 27 basis points in the second half.

Including all business lines, 91 percent of the firms in the study posted pre-tax net financial profits in 2013, down from 97 percent in 2012.  In the first half of 2013 95 percent of reporting firms posted pre-tax financial profits, compared to 69 percent in the second half of 2013.

Commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations increased to $5,948 per loan in 2013 compared to $5,137 in 2012.  In the first half of 2013, total production expenses averaged $5,743 per loan, then rose to $6,539 per loan in the second half of 2013.  Personnel expenses averaged $3,910 per loan in 2013, up from $3,285 per loan in 2012.

The "net cost to originate" which includes all production operating expenses and commission minus all fee income was $4,298 per loan in 2013, up from $3,323 in 2012.  Net cost to originate excludes secondary marketing gains, capitalized servicing, servicing released premiums, and warehouse interest spread.

Average production volume was $1.75 billion (7,857 loans) per company in 2013, compared to $1.72 billion (7,699 loans) per company in 2012.  For those companies who responded to both 2012 and 2013 MBA surveys the average production volume was flat at $1.81 billion (8,083 loans in 2013 and 8,098 loans in 2012).  Each production employee originated 2.6 loans per month during the year compared to 3.7 loans in 2012. 

Refinance Apps Inch Higher, Marking Third Straight Gain

It was only by a fraction, but mortgage application activity was up for the third straight time during the week ended May 16.  The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, inched up 0.9 percent on a seasonally adjusted basis and an even narrower 0.4 percent unadjusted when compared to the week ended May 9. 

The Refinancing Index rose 4 percent from the previous week, also a third consecutive increase.  Fifty-two percent of all applications were for refinancing compared to 50 percent the week before.  The refinancing share hit a five-year low of 49 during the week ended May 2. 

Refinance Index vs 30 Yr Fixed

The unadjusted Purchase Index decreased 3 percent compared to the previous week and was 12 percent below the index for the same week in 2013.  The Purchase Index was also down 3 percent on a seasonally adjusted basis.

Purchase Index vs 30 Yr Fixed

 "Renewed concerns about the state of the global economy, particularly in Europe, led to a flight to quality to US Treasury securities, thereby pushing interest rates down in the US," said Mike Fratantoni, MBA's Chief Economist. "Rates on conforming loans hit 6 month lows and jumbo rates hit 12 month lows. Refinance volume picked up somewhat as a result, but it still remains more than 65 percent below last year's pace. Purchase volume continues to run more than 10 percent below last year's pace."

The average contract interest rate for a conforming 30-year fixed rate mortgage (FRM) with a principal balance of $417,000 or less decreased to 4.33 percent from 4.39 percent with points easing to 0.20 from 0.22.  This was the lowest conforming 30 year FRM since last November.  The effective rate for this and all other rates quoted also decreased.

Jumbo 30-year FRM with balances above $417,000 had an average rate of 4.24 percent, 5 basis points lower than the previous week and the lowest rate since May 2013.  Points decreased to 0.1 from 0.16.

Rates for both FHA-backed 30-year FRM and for 15-year conventional mortgages fell back to October levels.  FHA loans had an average rate of 4.06 percent with -0.39 point compared to 4.09 percent with --0.17 point the previous week and the 15-year rate was 3.43 percent with 0.15 point, down from 3.48 percent with 0.12 point.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 3.14 percent from 3.17 percent, with points increasing to 0.29 from 0.24.  ARMs maintained the same 8 percent share of applications as the previous week.

MBA's Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all U.S. retail residential mortgage applications.  Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and rates are quoted for loans with an 80 percent loan-to-value ratio.  Points include the origination fee.

Inventory Shortage Makes for Competitive 2014 Housing Market -Redfin

Sales, prices, and inventories all showed some signs of life in April.  Redfin said today that median home prices were up in all markets on an annual basis, a national increase of 9.4 percent.  While home sales are down by 7.6 percent year-over-year, sales did improve by 12.4 percent over their weak sales performance in March.  There were 5.2 percent more homes for sale in April 2014 than in the previous April and 3.7 percent from the prior month.  This means, Redfin said, that buyers have more options in some markets.

While home prices have risen for 28 straight months, the size of the increases has steadily diminished from the 20 percent annual gains that were happening in late 2012.  From March to April the median sale price rose 3.6 percent.  During the same period in 2013 the gain was 4.6 percent.  Redfin called the annual increase in April, 9.4 percent, strong and healthy and one that was more consistent across cities.  "When some cities have 25 percent price gains while other cities are flat or down in price, it can lead to difficulty for buyers, sellers and even banks financing mortgages," the Redfin report says.  "If all cities share stable and sustainable housing price appreciation, the whole economy stands to benefit."

The April gains in home sales were geographically uneven.  Atlanta and Oakland had sales that were more than 4 percent higher than in the previous April and Tacoma was up slightly but nine metro areas had double-digit annual declines in home sales, notably Las Vegas which was down 16.4 percent, Philadelphia, 16.3 percent, and Long Island, 15.2 percent lower.

While the inventory of available homes was up nationally Redfin said the situation does not look great across many markets.   Markets with the highest demand have seen inventory tighten further.   In Denver the inventory is off 18.6 percent and in San Francisco 16.0 percent.  Austin, Portland, Oregon and Raleigh-Durham have also seen a tightening of 5 to 10 percent. 

Redfin said that with half of all markets experiencing a year-over-year decline in homes for sale, things are still difficult. Buyers and potential sellers who want to trade up are asking, "Where is all the inventory?"  The tight inventory, rising prices, and higher interest rates are all contributing to home affordability challenges. While the balance of power has recently shifted a bit to the buyer side, Redfin said 2014 still looks like it will present a competitive housing market.

Multifamily Housing Starts up 24 to 1 over Single-Family

Both residential permitting and housing starts increased in April although housing completions lagged behind those in March the Census Bureau and the Department of Housing and Urban Development said today.  Permits for construction of new single family houses were issued during the month at a seasonally adjusted annual rate of 1,080,000, an 8.0 percent increase over the 1 million permits issued in March and 3.8 percent more than the 1,040,000 estimate in April 2013.  The March figure is an upward revision of the 990,000 unit estimate provided in last month's report.

Single family permits were issued at a seasonally adjusted rate of 602,000, up 0.3 percent from March and but were 3.2 percent below the level a year earlier.  Estimates of March single family permits were also revised upward from 592,000 to 600,000.   Single family starts rose at a slightly faster pace than permits, up 0.8 percent, but multifamily housing starts accounted for most of the overall improvement, rising substantially from an annual rate of 303,000 units in March to 423,000 units in April, an increase of 39.6 percent.  This rate was also 16.2 percent higher than a year earlier. The net month-over-month gain of 120k multifamily starts is 24 times the 5k gain in single-family starts.

On a non-seasonally adjusted basis there were 96,500 permits issued in April compared to 83,700 in March.  Fifty-eight thousand of the April permits were for single family construction and 36,300 were for units in multifamily buildings.  In the first four months of 2014 there have been a total of 318,000 permits issued compared to 297,100 during the same period in 2013.

Housing starts in April were at a seasonally adjusted annual rate of 1,072,000, a 13.2 percent increase from March's revised estimate of 947,000 (up from 946,000) and 26.4 percent above the April 2013 rate of 848,000.

On an unadjusted basis there were 94,900 residential units started in April compared to 80,000 in March and 60,100 single family starts compared to 55.300 the previous month.  Starts through April of 2014 total 300,600 compared to 284,300 for the first four months of 2013.

Housing completions were at a seasonally adjusted annual rate of 847,000, a 3.9 percent decrease from the revised March estimate of 881,000 (from 872,000).  The April estimate is 21.2 percent higher than the April 2013 rate of 699,000.

Single family completions were at a rate of 602,000, 2.4 percent lower than March.  Multifamily completions were at a rate of 242,000 compared to 251,000 in March.

On an unadjusted basis 64,900 units were completed, 46,000 single family and 18,700 multifamily units.  In March there were 68,300 completions.  To date in 2014 there have been 248,900 units completed compared to 213,500 by the same time in 2013.

At the end of the period there were 736,000 units under construction compared to 718,000 at the end of March.  Approximately 341,000 units were single family and 385,000 were in buildings of five units or more.

Permits in the Northeast were 17.6 percent lower than in March but 12 percent higher than in April 2913.  Housing starts were up 28.7 percent for the month and 78.2 percent for the year with virtually none of the increase attributable to single-family construction.  Completions were up 18.6 percent for the month and 31.7 percent on an annual basis.

In the Midwest permits were up 1.2 percent from March but down 4.7 percent from a year earlier.  Housing starts rose 42.1 percent from March and 40.3 percent from April 2013.  Completions in April were at a rate 2.9 percent below March but 4.7 percent higher than a year earlier.

Permitting jumped up 18.2 percent month-over-month in the South and was 1.7 percent higher than in April the previous year.  Housing starts rose a slight 1.5 percent month-over-month but were 18.2 percent higher on an annual basis.  Completions were down 5.5 percent from March but up 27.5 percent from April 2013.

There was a 7.7 percent increase in permits from March to April and an 11.3 percent annual increase in the West.   Starts increased by 11.1 percent and 12.7 percent for the two periods respectively.  Completions fell 8.5 percent for the month but were 16.0 percent higher on an annual basis.

Rising Prices Creates California Affordability Challenges

The California Association of Realtors (C.A.R.) said on Thursday that the state's housing market is showing "true signs of improvement." The market performed better than expected in April; sales increased faster than at any time in the last three years and median home prices reached the highest level since before the Great Recession.

Sales of existing single-family detached homes in California were at a seasonally adjusted annual rate of 394,070 units, an increase of 7.4 percent from March sales of 367,020.  Even with that increase sales were 7 percent lower than a year earlier, the ninth straight month of year-over-year losses, and it was the sixth consecutive month that sales failed to reach a 400,000 rate. 

"With home prices increasing by double-digits in 2013, many investors have decided to leave the market which is adversely affecting home sales as a whole," said C.A.R. President Kevin Brown.  "While the number of homes sold continued to decline from a year ago, the better-than normal surge in sales activities in April is encouraging and could be an indication that we will see further improvement in the housing market in the next few months." 

The median price of an existing home was $449,360 in April, the highest median price since December 2007.  This was a 3.2 percent increase from March and was 11.6 percent higher than in April 2013 when the median was $402,830.  California has seen an annual increase in its median price for 27 consecutive months.

"Looking forward, it is likely that we will see a more moderate level of price increase throughout the rest of the year, and further improvements in sales in the spring home buying season," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "Increasing home prices, relatively higher interest rates, and tight lending standards, however, will continue to present challenges to home buyers who are facing affordability issues.  Primary home buyers may no longer have to compete with investors in 2014, but instead they need to worry about increased borrowing costs."

The median marketing time for a single family home sold in April was 33.8 days compared to 35 days in March and 27.9 days in April 2013.  The inventory of existing single-family homes tightened from a 4 month supply in March to 3.5 months in April. A six-to-seven month supply is considered typical in a normal market. 

C.A.R.'s sales and price data is gathered in a survey of more than 90 Realtor associations throughout the state and the information is not seasonally adjusted.

Refi Applications Increase at Fastest Pace in a Month

Mortgage applications activity rallied slightly for the second consecutive time during the week ended May 9.  The Mortgage Bankers Association (MBA) said that mortgage application volume as measured by its Market Composite Index increased during the week by a seasonally adjusted 3.6 percent and was up 3 percent on an unadjusted basis.

Responses to the MBA's Weekly Mortgage Applications Survey indicated that refinancing also recovered slightly.  The Refinance Index increased 7 percent compared to the previous week, its best performance in nearly a month.  The refinancing share of applications, which, during the week ended May 2 made up less than half of all applications for the first time since 2009, recovered to 50 percent.

Refinance Index vs 30 Yr Fixed

The Purchase Index was virtually unchanged from the previous week, falling a faction of a percent on a seasonally adjusted basis and rising about the same amount on the unadjusted index.  The unadjusted Purchase Index was 12 percent lower than during the same week in 2013.

Purchase Index vs 30 Yr Fixed

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) decreased to 4.39 percent, the lowest rate since November 2013, from 4.43 percent, with points increasing to 0.22 from 0.21.  The rate for average 30-year FRMs with jumbo loan balances over $417,000 was unchanged from the previous week at 4.29 percent but points increased to 0.16 from 0.13.  The jumbo 30-year was the only loan product for which the effective rate increased during the week.

FHA-backed 30-year FRM had its lowest rate since November, an average of 4.09 percent, down from 4.13 percent.  Points decreased to -0.17 from -0.03.  

The average contract interest rate for 15-year FRM also was at the lowest level since November 2013; 3.48 percent with 0.12 point compared to 3.52 percent with 0.22 point the previous week. 

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 3.17 percent from 3.21 percent, with points decreasing to 0.24 from 0.29.  The market share of all types of ARMS decreased from 9 percent to 8 percent

MBA's survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rate information is for loans with an 80 percent loan to value ratio and points include the origination fee.

Price Growth Continues, But Too Quickly in Some Areas

Home prices continued to increase as broadly if not as rapidly as in previous periods the National Association of Realtors® (NAR) reported today.  Median prices increased in the first quarter of 2014 in 125 or 74 percent of the 170 metropolitan areas NAR tracks.  In the first quarter of 2013 89 percent of markets reported year-over-year gains.

The national median existing single-family home price was $191,600 in the first quarter, up 8.6 percent from $176,400 in the first quarter of 2013. In the fourth quarter the median price rose 10.1 percent from a year earlier. Distressed homes - foreclosures and short sales generally sold at discount - accounted for 15 percent of first quarter sales, down from 23 percent a year ago. In the condo sector, metro area condominium and cooperative prices - covering changes in 59 metro areas - showed the national median existing-condo price was $191,400 in the first quarter, up 10.8 percent from the first quarter of 2013. Fifty metros showed increases in their median condo price from a year ago, and nine areas had declines.

Lawrence Yun, NAR chief economist, said the price trend is favorable. "The cooling rate of price growth is needed to preserve favorable housing affordability conditions in the future, but we still need more new-home construction to fully alleviate the inventory shortages in much of the country," he said. "Limited inventory is creating unsustainable and unhealthy price growth in some large markets, notably on the West Coast."

There were double digit price increases in 37 metro areas and seven had increases in excess of 20 percent on an annual basis: South Bend-Mishawaka, Indiana (26.8 percent); Naples-Marco Island, Florida (26.6 percent); Las Vegas (23.5 percent); Lansing, Michigan (23.4 percent); Atlanta-Marietta (23.3 percent); Riverside-San Bernardino (23.1 percent); Sacramento (22.2 percent).

Forty-five metro areas had annual decreases, some of them substantial.  Among the largest were Cumberland, Maryland (-18.6 percent); Springfield, Illinois (-15.1 percent); Florence, South Carolina (-12.3 percent); and Oshkosh, Wisconsin (-11.0 percent).

The five most expensive housing markets in the first quarter were the San Jose metro area, where the median existing single-family price was $808,000; San Francisco, $679,800; Honolulu, $672,300; Anaheim-Santa Ana, $669,800; and San Diego, where the median price was $483,000.

The five lowest-cost metro areas were Youngstown-Warren-Boardman, Ohio, with a median single-family home price of $64,600 in the first quarter; Decatur, Illinois, $69,600; Toledo, Ohio, $72,100; Rockford, Illinois, $73,100; and Cumberland at $81,400.

Inventory increased slightly from a year earlier.  There were 1.99 million existing homes for sale at the end of the first quarter compared to 1.93 million in the first quarter of 2013.  The current inventory is the equivalent of a 5.0 month supply compared to 4.6 months a year earlier.  A supply of 6 to 7 months represents a rough balance between buyers and sellers.

Total existing-home sales, including single-family and condo, fell 6.9 percent to a seasonally adjusted annual rate of 4.60 million in the first quarter from 4.94 million in the fourth quarter, and were 6.6 percent below the 4.93 million level during the first quarter of 2013. 

NAR President Steve Brown said there's been some erosion in housing affordability. "Both home prices and mortgage interest rates are higher than a year ago, but the good news is that median income is enough to purchase a home in most areas. There are good potential buying opportunities in areas where there has been consistent local job creation, and where prices have not risen significantly, or where they may be experiencing temporary declines," he said.

Brown also expressed concern about the mortgage insurance fees for FHA loans that he said have more than doubled since 2010 and may have priced 125,000 to 375,000 buyers out of the market. "When you combine the increases in home prices and interest rates with record-high premiums, home purchases are becoming increasingly out of reach for many qualified borrowers who rely on FHA financing."

Still, a separate NAR breakout of qualifying incomes to purchase a median-priced existing single-family home on a metropolitan area basis demonstrates sufficient buying power in the majority of metro areas.  The projections assume several downpayment percentage scenarios and assume 25 percent of gross income devoted to mortgage principal and interest at a mortgage interest rate of 4.4 percent.

The national median family income was $64,500 in the first quarter.  However, to purchase a home at the national median price, a buyer making a 5 percent downpayment would need an income of $44,200.  With a 10 percent downpayment the required income would be $41,800, while with 20 percent down, the necessary income is only $37,200. 

Sales in the Midwest and Northeast were notably impacted by severe winter weather, while limited inventory and reduced affordability affected the West.  Total existing-home sales in the Northeast fell 10.2 percent in the first quarter and are 6.8 percent below the first quarter of 2013. The median existing single-family home price in the Northeast was $239,300, up 2.2 percent from a year ago.

In the Midwest, existing-home sales dropped 11.5 percent in the first quarter and are 10.5 percent below a year ago. The median existing single-family home price in the Midwest increased 6.7 percent to $144,000 in the first quarter from the same quarter a year ago.

Existing-home sales in the South declined 3.6 percent in the first quarter and are 0.7 percent below the first quarter of 2013. The median existing single-family home price in the South was $168,900 in the first quarter, up 7.7 percent from a year earlier.

In the West, existing-home sales fell 6.0 percent in the first quarter and are 12.4 percent below a year ago. The median existing single-family home price in the West jumped 14.0 percent to $282,100 in the first quarter from the first quarter of 2013.

"Undecided" Democrats Decide "No" on Johnson-Crapo

In yesterday's update on housing finance reform it was noted that Senator Tim Johnson (D-SD) was hoping to have 16 favorable votes lined up before bringing S 1217, the Johnson-Crapo housing reform bill, to a vote in the Senate Finance Committee.  Twelve committee members - six Republicans and six Democrats, had committed to the bill, two Democrats were opposed, and four others were undecided.  There are 22 committee members.

Bloomberg reported this morning that the four undecided Democrats, Charles Schumer (NY), Jeff Merkley (OR), Robert Menendez (NJ) and Jack Reed (RI) had joined Elizabeth Warren (MA) and Sherrod Brown (OH) in deciding they would not support the legislation.

While Johnson, Chairman of the Committee, still has the votes necessary to recommend the bill to the full Senate, the opposition of so many Democrats lessen the probability that Majority Leader Harry Reid (D-NV) will bring the bill to the floor.

Cheyenne Hopkins says in her Bloomberg piece that the Democrats agreed in a private meeting yesterday that they would not support the bill without significant revisions.  They are said to have agreed that the structure of the proposed Federal Mortgage Insurance Corporation (FMIC) which is supposed to replace the government sponsored enterprises (GSEs) in operating the secondary market and in providing a catastrophic backstop against mortgage default losses seemed unworkable.  The Democrats also want stronger support for affordable housing goals.

In late April Brown introduced multiple amendments to the Johnson-Crapo bill addressing some of the structural weaknesses he saw in the bill.  One amendment would create a fiduciary responsibility for investors in mortgage backed securities.  Brown, on his website, said this would address the concerns over legal liability for the securities among trustees, servicers, and investors while creating protections essential to attracting private capital back into the market.  Provisions of the amendment would apply to trustees of private label securities (PLS) issued both through the new Common Securitization Platform (CSP) and outside of its.  The CSP is currently under joint development and ownership of the GSEs and would be administered and regulated by FMIC if Johnson-Crapo becomes law.   

Nine other amendments were co-sponsored by David Vitter (R-LA).  These would close various loopholes in S 1217 that allowed the participation of depository institutions in the secondary market in such a way as might potentially open the Federal Reserve to another bank bailout. 

Warren and Brown have both been outspoken in their opposition to eliminating the affordable housing goals which were long part of the mandate given to the GSEs.  Johnson-Crapo has opted for providing incentives to private investors for lending to low-income and minority populations.  Civil rights and consumer advocates have also been lobbying for mandates rather than incentives.

Warren has said that "either collectively or individually, issuers of mortgage-backed securities that are government-guaranteed should have a clear and enforceable duty to serve the entire primary market." She has also defended the affordable housing mandates of the GSE's saying that while Freddie Mac and Fannie Mae made major mistakes that cost taxpayers, (their) "affordable housing goals were not to blame for (the) crisis' underlying cause."

Warren has also advocated for protecting the role of smaller financial institutions in housing finance.  On her website she says, "A housing market dominated by a handful of Too Big to Fail institutions would reduce access to mortgages in rural and poorer urban areas. It would also increase systemic risk and reduce innovation and customization in the primary market.  Any future housing finance system must ensure not only that smaller lenders can sell their loans into the secondary market, but also that they can do so at competitive rates and remain viable players in the primary market."

Bloomberg quotes Sean Oblack, a spokesman for Johnson as saying yesterday that the senator expects the bill to be approved by the committee and would continue to seek more support.   "We have made significant progress bridging the divide among those previously undecided, and the committee vote is just a first step," he said.  "Those involved in the negotiations have indicated they are interested in continuing to work together to try and find common ground, so the Banking Committee will keep working after favorably reporting out the bill next week."

Even as Distressed Sales Fall; All-Cash Buying Increases

Even though sales to investors and sales of distressed homes have declined the National Association of Realtors® (NAR) reports that all-cash sales continue to climb.  According to Lawrence Yun, NAR's chief economist, these findings are counterintuitive and may indicate other changes are underway in the market.

NAR's Realtors® Confidence Index survey conducted each month among about 3,000 of its members, indicates all-cash home purchases rose from 29 percent in 2012 to 31 percent last year and accounted for 33 percent in the first quarter of 2014.  That same survey showed investors, who are typically the source of many of the all-cash transactions edged down from 20 percent of buyers in 2012 to 19 percent in both 2013 and the first quarter of this year.  

A second NAR study conducted among consumers, the 2014 Investment and Vacation Home Buyers Survey, shows investors at a somewhat higher market share, but declining more sharply from 24 percent in 2012 to 20 percent in 2013.

The Realtor survey also showed distressed home sales declining from 26 percent of the national market in 2012 to 17 percent in 2013 and 15 percent in the first quarter of 2014.  NAR projects that those sales will be in single digits by the fourth quarter of this year.

The Realtor group said the survey provided sufficient data to break information out on a state level for 29 states and to break out all census regions with information for every state. 

In Florida more than half of all homes were purchased with cash with very little change in the level of those sales from 2012 to the present.  Yet distressed home sales declined from nearly four in 10 purchases in 2012 to three in 10 during 2013, and investor transactions edged down.

All cash sales exceeded 40 percent in several other states including Nevada, Arizona and West Virginia.  Among the 29 states for which complete data was available the lowest levels of cash sales in the first quarter were reported in Maryland (17 percent) Colorado (19 percent) and Oregon (21 percent).  Those states had posted all cash shares that were 4, 2, and 6 percentage points higher respectively in 2013.

 "These findings beg the question as to why we're seeing higher shares of cash purchases," Yun said. "The restrictive mortgage lending standards are a factor, but the higher levels of cash sales may also come from the aging of the baby boom

More Americans Think it's Time to Sell -Survey

Fannie Mae is taking an upbeat view of the housing market over upcoming months because of the general improvement in Americans' outlook revealed in its most recent National Housing Survey.  Respondents to the April survey were less concerned than they have been in the past about losing their jobs, more upbeat about the direction of both home prices and interest rates, and the numbers who view it as a good time to sell a home hit a survey high of 42 percent.

It was the third month that the 'good time to sell' outlook increased which is good news as many potential move-up buyers must sell before they can buy.  The number of respondents who think it is a good time to buy remained steady at 69 percent. 

"Our April survey results suggest that consumer confidence is moving in a positive direction," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Consumer attitudes about the current home selling environment have improved and now are at the most favorable level we've seen in the survey's four-year history. Consistent with Friday's upbeat jobs report, concern about job loss among employed consumers also has hit a record survey low. These results are in line with our expectations for increased housing activity and gradual strengthening of the housing market going into the spring and summer selling season."

The number of respondents who expect home prices to increase over the next 12 months increased from 48 to 50 percent, reversing the March change.  The average expectation for a price increase rose from 2.7 to 2.9 percent

The survey found that some respondents think the rapid rise in mortgage rates over the last months may at least slow down.  Fifty-two percent expect further increases while 7 percent say rates will go down compared to 54 percent and 3 percent last month.  Thirty-eight expect no further rate changes.

Higher rents were anticipated by 52 percent of respondents, unchanged from March, but only 2 percent, a survey low, expect rental prices to fall.  The average 12 month rental price increase was 4 percent, down from 4.2 percent.

One big change was in the number of survey participants who thought it would be easy for them to obtain a mortgage.  It fell 7 percentage points to 45 percent.  At the same time the share of those who said they would buy if they were going to move was down 3 percentage points to 65 percent.

The share of respondents who said their household income was lower than 12 months ago went down to 12 percent tying the all-time survey low while those who expect their personal financial situation to get better or stay the same was virtually unchanged

On the right track/wrong track question the number of right track responses increased by two percentage points but that view is still only held by 35 percent of survey respondents. .

The Fannie Mae National Housing Survey polled 1,000 Americans via live telephone interview, asking more than 100 questions about attitudes toward owning and renting a home, home and homeownership distress, the economy, household finances, and overall consumer confidence.  Respondents include both renters and homeowners and the current survey conducted between April 1, 2014 and April 21, 2014.

Homebuilders' Leading Market Index Paints Recovery as Slow, Steady

The country has now reached about 88 percent of what is considered its normal level of economic and housing activity the National Association of Home Builders (NAHB) said on Tuesday.  The NAHB/First American Title Insurance Leading Markets Index (LMI) rose to .88 in April from .87 in March.  In April 2013 the LMI was at .82.

49 of the 351 metro markets tracked by the index have reached or exceeded 100 on the index indicating that they have returned to at least their last normal levels of economic and housing activity. Three hundred of the metro areas have improved their index numbers since last April.  

"We have always said this recovery would be a slow but steady one, and I think this index continues to prove this," said NAHB Chief Economist David Crowe. "The year started a bit slower than anyone could have anticipated but we still expect housing to play a greater role in aiding the overall economic recovery this year. The job market continues to mend and that should spur a steady release of pent up demand among home buyers."

The LMI identifies where markets are relative to their previous normal levels of activity.  NAHB takes each area's average employment, housing permits, and home price levels for the past 12 months and divides each by its annual average during the last period of normal growth.  For single-family permits and home prices that would be 2000-2003 and for employment the year 2007 is used.  The three components are then averaged to provide an overall score for each market.  U.S. Census Bureau provides the information on housing permits, employment data comes from the Bureau of Labor Statistics, and Freddie Mac is the source of home price information. 

Cities at the forefront of the energy boom continue to lead the LMI.  Baton Rouge remained the top performer among major metros with a LMI of 1.41 - or 41 percent better than its last normal market level and the best performing small cities were Odessa and Midland, Texas with scores of 2.0 or better, double their strength prior to the recession.  Other major metros with scores above 100 include Honolulu, Oklahoma City, Austin and Houston, Los Angeles, San Jose, Calif. and Harrisburg while other top small metros are Bismarck, North Dakota; Casper, Wyoming, and Grand Forks, North Dakota, all three beneficiaries of the energy boom.

"Our builder members tell us they are starting to see more optimism in the field," said NAHB Chairman Kevin Kelly. "Mortgage rates are low, home prices are affordable and with the harsh winter behind us our latest surveys show builders are feeling more bullish about future sales conditions."

About that jobs report...maybe it wasn't so great

While the numbers may change, the story of the U.S. labor market ultimately is the same. Job growth continues, but significant weakness remains.

Friday's nonfarm payroll report was the best in months, with 288,000 new jobs and an unemployment rate dropping all the way down to 6.3 percent.

The internals were somewhat less impressive.

The headline rate fell due to a stunning decline in the labor force, the quality of new jobs remained iffy and long-term unemployment is still immune to ultra-easy monetary policy as the average length of joblessness holds at more than 35 weeks.

"The unemployment rate, which fell to 6.3 percent in April from 6.7 percent the prior month, wholly masks the extent of the problem," University of Maryland economist Peter Morici said in an analysis. "The percentage of adults seeking employment dropped precipitously. One out of 6 men between the ages of 25 and 54 are without jobs, and many have given up looking for work and are not counted in the jobless rate."

Among his peers, though, Morici largely stood alone.

Virtually every other economist weighing in on the report from the Bureau of Labor Statistics focused on the positives, seeing the report as indicative of continued healing in the U.S. economy as it travels the long road back from the 2008-09 financial crisis.

PNC economists Stuart Hoffman and Gus Faucher called the report "solid" and predicted revisions probably would take the April numbers past the 300,000 barrier, and there were few voices to dispute the jobs momentum.

"The nature of the crisis was such that the economy was bound to have a restrained expansion. Too much wealth was destroyed," Princeton economist Alan Krueger told CNBC.com. The jobs report "suggests that the economy is going to continue to heal and gather a little momentum despite the weak first-quarter GDP numbers."

Indeed, gross domestic product for the first three months tracked at a tepid 0.1 percent and some economists think the final number actually will be negative.

As for the labor market, job growth has proceeded apace at 190,000 per month over the past 12 months, and nearly 238,000 for the past three months. In fact, the recent reports pretty well refute the notion that the brutal winter weather was slowing down the economy. Job creation, the numbers show, actually has been well ahead of the former pace.

Yet many are being left behind.

The fall in the labor force participation rate was especially pronounced among minorities and teenagers. The total civilian labor force fell by 806,000. Those working part time for economic reasons remained little changed at 7.5 million. There were 783,000 discouraged workers, a number that has moved very little over the past year.

The household survey actually showed a decline of 73,000 positions.

Quality of jobs was another problem.

Professional and business services led the way with 75,000 new positions. But generally low-paying retail was next at 35,000, while bars and restaurants added 33,000. There were another 15,000 health-care jobs but in personal and laundry services.

It all added up to no change in hourly earnings and the average workweek and is part of a larger trend that the National Employment Law Project called "a pattern that has persisted deep into the nation's rebound."

"It's looking more and more like the low-wage economy is the new normal," NELP policy analyst Mike Evangelist said in a report that highlighted the extent of the problem.

According to the group, low-wage jobs accounted for 22 percent of the jobs lost during the crisis but twice that many gains during the recovery. High-wage positions represented 41 percent of the job losses but just 30 percent of the growth. The NELP contrasted that with the recovery after the 2001 recession, where all groups grew uniformly.

For the Federal Reserve , then, the report likely does nothing to move policy. The central bank will continue on its road of decreasing monthly bond purchases but holding its key policy rate near zero. The Fed already has given up on its old yardstick of 6.5 percent unemployment to begin raising rates, and the uneven internals of the report probably will only fortify that position.

"All of this leaves the Fed on its super-slow exit path," Michelle Meyer, U.S. economist at Bank of America Merrill Lynch, said in a note to clients. "They want a full healing and that means getting the unemployment rate below 6 percent and getting wage growth back to normal. Today's data helped us move toward the first goal, but we actually took a small step back on the second goal."

Construction Spending Rising Slower Than Expected

Overall construction spending increased slightly in March the Census Bureau said today.  Combined public and private construction was at a seasonally adjusted annual rate of $942.5 billion, 0.2 percent above the revised February estimate of $940.8 billion and 8.4 percent above the March 2013 estimate of $869.2 billion.  Economists surveyed by Reuters were expecting a gain of 0.5 percent.  Construction spending in the first quarter totaled $196.6 billion an 8.3 percent increase over the same period in 2013 when spending was estimated at $181.6 billion.

All of the small improvement in spending was accounted for by the private sector where spending rose 0.5 percent from February to a seasonally adjusted annual rate of $679.6 billion from $676.3 billion in February.  The March number was a 12.5 percent increase from a year earlier when private sector spending was estimated at $604.02 billion. Year-to-date (first quarter) spending was also 12.5 percent higher than in March 2013, $145.19 billion to $129.07 billion.

On a non-seasonally adjusted basis private residential construction spending totaled $27.11 billion in March compared to $23.31 billion in February and $23.40 billion in March 2013.  Single family construction accounted for $14.38 billion of the total and multi-family expenditures for $3.18 billion

Private residential construction spending was at a seasonally adjusted annual rate of $369.8 billion in March, 0.8 percent above the revised February estimate of $367.0 billion and was 16.0 percent higher than one year ago when residential spending was at a rate of 318.73 billion.  Year-to-date residential spending was up 16.7 percent from a year earlier to a non-seasonally adjusted $74.67 billion compared to $63.98 billion.

Single-family residential construction was $185.66 billion, 13.2 percent higher than a year earlier and 0.2 percent higher than in February. Construction in residential buildings of five or more units was at a seasonally adjusted annual rate of $39.15 billion and was 4.4 percent higher than in February and 32.5 percent above expenditures at the same time in 2013.

Public Sector construction was at a seasonally adjusted annual rate of $262.92 billion, down 0.6 percent from February and 0.8 percent from March 2013.  Residential construction totaled $4.7 billion and was down 6.6 percent month-over-month and 26.7 percent from one year ago.