California pending home sales gain steam to post six straight months of
annual gains, C.A.R. reports
Source: C.A.R.
With the California housing market continuing its upward trend, pending home sales registered their sixth
straight annual gain, with the last four months being in the double-digits, according to the CALIFORNIA
ASSOCIATION OF REALTORS® (C.A.R.). In a separate report, California REALTORS® responding
to C.A.R.’s May Market Pulse Survey saw more floor calls, listing appointments, and open house traffic,
compared to April.
Making sense of the story

California pending home sales were up 12.1 percent on an annual basis from the revised 110.3
index recorded in May 2014, marking the sixth straight month of year-to-year gains and the
fourth straight month of double-digit advances.

Statewide pending home sales fell in May on a month-to-month basis, with the Pending Home
Sales Index decreasing 4.6 percent from a revised 129.6 in April to 123.6, based on signed
contracts. The month-to-month decrease was below the average April-May loss of 3.6 percent
observed in the last seven years.

Pending home sales in Southern California reversed last month’s decline to rise 1.6 percent in
May to reach an index of 105.4, up 12.5 percent from the May 2014 index of 93.7.

The share of equity sales – or non-distressed property sales – edged up further in May to make up
92.6 percent of all home sales, the highest level since late 2007. Equity sales made up 91.8
percent of all home sales in April and 88.8 percent in May 2014. The share of equity sales has
been at or near 90 percent since mid-2014.

In a sign of stabilizing home prices, the share of sales closing below asking price has been on a
downward trend for four straight months. One in four (40 percent) transactions closed below
asking price in May, down from the highest point of 55 percent in January 2015. More than a
third of homes (34 percent) closed over asking price, and 26 percent closed at asking price.

The premium paid over asking price declined in May, suggesting diminished market competition
among home buyers. In May, homes that sold above asking price sold for an average of 8 percent
above asking price, down from 10 percent in April but up from 6.5 percent in May 2014.

The share of properties receiving multiple offers fell for the first time in four months. Sixty-five
percent of properties received multiple offers in May, down from 72 percent in April and up from
62 percent a year ago.
Read the full story
http://www.car.org/newsstand/newsreleases/2015releases/may2015pending
In other news …
MBA's Stevens: We are in the middle of a housing crisis
Source: HousingWire
The word “crisis” can sound alarmist, but Mortgage Bankers Association President and CEO David
Stevens has used that term to describe the current state of housing, or better put, the lack of focus on
housing as an opportunity by Washington policy makers. He places the blame at the top of the ladder,
opining that President Barack Obama has not built enough confidence in consumers' views about
homeownership. Due to the lack of focus, Stevens notes that “Today's environment is not encouraging
credit expansion. It's forcing lenders to be overly conservative - ultimately failing entry-level
homeowners on every front.”
Read the full story
http://www.housingwire.com/articles/34254-mba-stevens-we-are-in-the-middle-of-a-housing-crisis
Real estate experts weigh in on SoCal housing market
Source: KPCC
Want to hear from two top academic experts on the housing market? KPCC interviewed Raphael Bostic,
Judith and John Bedrosian Chair in Governance and the Public Enterprise at USC’s Price School of
Public Policy, and Stuart Gabriel, professor of finance and director of the UCLA Ziman Center for Real
Estate. The experts discussed state of housing, including a report from the CALIFORNIA
ASSOCIATION OF REALTORS® noting that low supply has a lot to do with homeowners choosing to
stay up rather than start over as buyers.
Read the full story
http://www.scpr.org/programs/airtalk/2015/06/23/43390/real-estate-experts-weigh-in-on-socal-housingmark/
The subprime mortgage crisis wasn't about subprime mortgages?
Source: Fortune
The media, in explaining the causes of the financial crisis, has frequently painted the narrative that once
subprime borrowers began to default, falling dominoes sent the entire mortgage market, U.S. financial
system, and global economy into crisis. Consequently, subprime borrowers and lenders have received a
great deal of attention and blame in analysis of the crisis, but new research suggests this is misguided. The
study notes that the vast majority of mortgages in the U.S. were still given to prime borrowers, which
means that the real estate bubble was a phenomenon fueled mostly by creditworthy borrowers buying and
selling homes they simply thought wouldn’t ever decrease in value. Simply put, the foreclosure crisis
would have happened even in the absence of such risky lending.
Read the full story
http://fortune.com/2015/06/17/subprime-mortgage-recession/
Rising Mortgage Rates to Test Housing Market’s Strength
Source: Wall St. Journal
Mortgage rates have hovered around 50-year lows for the past five years, leaving many home buyers and
sellers wondering how long the good times can last. While the housing market continues to recover,
momentum may not last if interest rates increase. For instance, higher mortgage rates could put more
homes in pricey West Coast markets out of buyers’ reach. Some economists note that the economy
overall is in better shape to handle increases. But that may not be true everywhere, and homeowners in
California may need to brace for a gradual end to the boom times.
Read the full story
http://finance.yahoo.com/news/rising-mortgage-rates-test-housing-190700848.html
Homeownership rate at 10-year low
Source: HousingWire
For the 10th consecutive year, the national homeownership rate decreased, with its downward spiral
continuing in 2014. The rate is off 0.6 percentage point to 64.5 percent, according to the 2015 State of the
Nation’s Housing report from the Joint Center for Housing Studies of Harvard University. During 2015,
the decline continued with a first-quarter reading of just 63.7 percent — the lowest quarterly rate since
early 1993. Harvard’s report notes that “While recent estimates suggest that homeownership rates may be
firming in some areas, there is no evidence so far of a significant rebound.”
Read the full story
http://www.housingwire.com/articles/34294-homeownership-rate-at-10-year-low
The housing market's new pain: Rising inequality
Source: CBS
Rich and middle-class areas have seen sizable gains with the recovery of the housing market, while many
poor – and often minority – neighborhoods continue to suffer from depressed prices. As a result, about 15
percent of homes under $200,000 were worth less than their mortgages as of March. It appears the
housing market has actually become a tale of two types of cities. Many low-income neighborhoods and
towns that have failed to see wage growth or lower unemployment are also suffering.
Read the full story
http://www.cbsnews.com/news/the-housing-markets-new-pain-rising-inequality/
Talking Points …

Freddie Mac released its updated Multi-Indicator Market Index (MiMi) showing the U.S. housing
market continuing to stabilize with the strongest markets realizing the greatest benefits from a
spring home-buying season in full swing.

The national MiMi value stands at 78.7, indicating a weak housing market overall but showing an
improvement of 14 percent from March and April and a three-month improvement of 2.10
percent.

Since its all-time low in October 2010, the national MiMi has rebounded 33 percent, but it’s still
significantly off from its high of 121.7.