New Home Sales At Highest Level In Over Two Years
MELISSA BLOCK, HOST:
While federal prosecutors sue Bank of America for its alleged role in the housing crisis, things are looking up for the housing industry. Government numbers out today show that new home sales rose almost 6 percent in September, and that comes on the heels of other promising data out last week on construction activity.
Joining me now to discuss what appears to be a housing recovery is NPR's Yuki Noguchi.
And, Yuki, those new home sales numbers are apparently the highest they've been in two-and-a-half years. Does that mean that housing is back, the market has recovered?
YUKI NOGUCHI, BYLINE: Well, in part. There is indeed evidence to suggest that it is certainly improving. Prices are increasing, and not just in a couple of markets, but across the country. In fact, there's only one market, Atlanta, where prices are still going down year to year substantially, and even there, things are improving month to month.
But there's some context, here. You need to remember that the last few years were abysmal by just about every measure, right - sales, prices, foreclosures and construction. So even a big improvement from last year doesn't mean things are good or even normal, but they certainly are improving.
BLOCK: So going in the right direction, but nowhere near where they used to be.
BLOCK: I gather that inventory, the number of houses that are up for sale is a big issue in some markets. What's going on there?
NOGUCHI: Well, last week we saw evidence that both housing starts and applications for permit shot up, and part of what's driving that is low inventory - in some places, even abnormally low. In places like Southern California and Phoenix, it's actually hard for first-time homebuyers to find something they want because what little is for sale gets snatched up. So housing construction is up, but it's still at about half of normal levels - not boom levels, just normal levels. And the companies that are doing most of the building are the large companies: Pulte, Centex, Lennar. But most homebuilders are small businesses, and they report still having trouble getting construction loans. So they're still largely on the sidelines.
BLOCK: Yuki, during the economic crisis and the housing crisis, foreclosures shaped so much of what was going on in the housing industry. Where do things stand now with foreclosures?
NOGUCHI: So, overall, the foreclosure and delinquency rates are down across the country. Delinquency rates, the number of people who are falling behind on their mortgage, is going down, so fewer future foreclosures are anticipated. But that's only, really, part of the story.
The foreclosure rates really vary depending on what kind of state you live in. So there are two kinds of states. One kind of state requires a judge to sign off on the foreclosure process. And in those states, it's taking much, much longer, like three years in some cases, like in New Jersey and New York. You know, they're facing a huge backlog of foreclosures still. The other kinds of states don't require this to sign off, and so it's taking much faster, like three months in Texas. And so, in those areas, the conventional wisdom is that the foreclosure crisis has largely passed.
BLOCK: Yuki, housing is such a big issue for so many people in this country. It's a huge economic issue. We have hardly heard anything about it in the presidential campaign. Why not?
NOGUCHI: Two reasons: A, it's complicated, doesn't fit very well in a soundbite, and B, the candidates agree, at least in principle, on many of the major policy questions, things like mortgage modifications and refinancings. Both candidates endorse those ideas, at least in some form. The only big difference between the two is that Mitt Romney talks about rolling back some of the new Dodd-Frank financial laws while President Obama endorses strong regulation of the mortgage market. The Romney campaign hasn't released more specifics on what they would roll back. So that's about all I can tell you about that.
BLOCK: OK. NPR's Yuki Noguchi. Yuki, thanks.
NOGUCHI: Thank you. Transcript provided by NPR, Copyright NPR.