Springing up: Sales of new homes rose 2.2% in May from the month before to their highest level in seven years. New single-family homes were sold at a seasonally adjusted rate of 546,000 in the U.S. last month, the Census Bureau announced today. The increase crushed the 525,000 forecast of economists in an Econoday survey. The seven-year high, calculated by research firm Capital Economics, is a sign the housing market is rebounding. Americans bought almost 20% more homes this year than last May. The results were driven a 87.5% surge in new homes sold in the Northeast from the previous month. The results were driven by a 87.5% surge in new homes sold in the Northeast from the previous month. Compared to last year, Realtors racked up 33% more new home sales in the South and 25% more in the West. USA Today has the full story.
Money for nothing: Home efficiency measures such as installing new windows or replacing insulation deliver such a small fraction of their promised energy savings that they may not save any money over the long run, according to the surprising conclusion of a University of Chicago study. The study, which used data from a random sample of 30,000 low-income Michigan households that were eligible for an Energy Department home weatherization program, found that the projected energy savings were 2.5 times greater than actual savings. As a result, energy bills didn’t decline nearly enough to eventually pay for the initial cost of the upgrades. “The problem is that the real world is screwy,” says Michael Greenstone, an energy economist and head of the Energy Policy Institute at the University of Chicago. “The models project much larger savings than are realized by homeowners.” The Associated Press has the full story.
It’s coming back around again: The second-largest provider of U.S. mortgages through brokers is bringing back a debt type that has almost disappeared since the financial crisis: Interest-only loans. United Wholesale Mortgage plans next month to expand access to the mortgages to borrowers beyond the wealthiest Americans who use so-called jumbo loans. Interest-only mortgages carry higher risks because they can leave homeowners facing a jump in their bills down the road. The move by the family-owned lender, which grew more than 40-fold after the crash by working with brokers as banks such as JPMorgan Chase & Co. abandoned them, is the latest sign of how lending standards are expanding in the wake of the crisis. Crain’s Chicago Business has the full story.
