The MReport Webcast: Tuesday 8/19/2014

The National Association of Home Builders reported another increase in its measure of builder sentiment, marking the third straight monthly improvement. The group’s Housing Market Index, a gauge of confidence based on current new home sales, expected sales in the next six months, and traffic from potential buyers, registered 55 in August, five points above the benchmark between a market viewed as poor and one viewed as good. All three index components moved upward, with the measure of present home sales climbing to 58, expected sales rising to 65, and buyer traffic increasing to 42.

Despite gains in confidence over the last few months, new construction has remained weak, plunging 9.3 percent month-over-month in the Census Bureau's June data. The NAHB’s chief economist, David Crowe, explained that the last few increases in the association’s index reflect high hopes for new home sales and construction for the rest of 2014 as economic conditions improve and pent-up demand hits the market. The government’s data for July homebuilding, scheduled for release today, will provide an early look at how the year’s second half might play out.

In a quarterly survey released Tuesday, RealtyTrac reported all-cash transactions made up just under 38 percent of all single-family home and condo sales last quarter, down from the first quarter's three-year high of 42 percent but up from nearly 36 percent a year ago. The decline came as the share of sales to institutional investors fell to 4.7 percent, its lowest level since the start of 2012. RealtyTrac vice president Daren Bloomquist said the drop in all-cash and investor activity should create more room in the market for first-time homebuyers. Unfortunately, those same buyers may already be out of the market thanks to the run-up in prices over the last two years.