The Census Bureau reported that the percentage of vacant homes for sale in The U.S. reached a new record high in the first quarter of the year. The bureau report shows that 2.9 percent of U.S. homes were vacant and for sale, compared with 2.8 percent in the fourth quarter of 2007. It was the highest quarterly figures recorded since 1956.

That actual number of properties is 2.28 million, up from 2.18 million in the same period last year, according to the report.

The West had the biggest gain in vacancy rates among homeowners, rising to 3.2 percent in the January-March period from 2.6 percent in the same period a year earlier. Vacancy rates moved up in the Northeast and remained steady in the Midwest and South. The national vacancy rate, including new and existing homes, has been consistently rising since mid-2005.

The Census Bureau’s report also said that the U.S. homeownership rate remained at 67.8 percent in the first quarter, down from a peak of 69.2 percent at the end of 2004.

The housing market’s five-year boom is quickly eroded by the sharp home price declines over the past two years in once hot sales areas such as California and Nevada.

Last week, a Commerce Department report said sales of new homes plunged in March to the slowest pace in 16 1/2 years matched by the increasing inventories of homes for sale.

Builders implemented price cuts, but it had little effect to improve the marketability of the homes. Buyers are still holding out, uncertain about when the price will reach the bottom.

The National Association of Realtors reported last week that sales of existing homes also fell in March, dropping by 2 percent, with prices declining on a year-over-year basis by 7.7 percent.

Home prices drop for the sixth straight month affecting 19 of 20 metro areas being monitored in the S&P/Case Shiller index. The monthly home-price index tracks 20 major U.S. metro areas dropped 12.7 percent in February this year compared to the same month last year.  

The index was at its lowest since it began in 2000. The index gauges the value of homes over time, based on price pairs for repeat sales of the same homes. Las Vegas got steepest annual decline among the 20 areas in February, plummeting by 22.8 percent from its index level in February 2007.

Miami followed with a 21.7 percent annual decline in February. Contrary to Charlotte, N.C., which had a 1.5 percent annual gain in the price index in February. "There is no sign of a bottom in the numbers," said David M. Blitzer, chairman of the Standard & Poor's Index Committee, in a statement. 

Index values have declined for all of the 20 metro areas in every month since September 2007, and eight of the 20 metro areas and the composite 20-city index had its single largest monthly decline in February, Blitzer also reported. 

More U.S. households are failing to meet their utility bills on time and the number of homes seeking public assistance is growing. This was according to groups that arrange for help. Concern over a record number of families will face housing utility shutoffs in coming months is increasing. This is still an evidence of the fallout from a distressed housing market and inflation.

"The underlying problem is many families are becoming poorer and have to pick which bills to pay," said Mark Wolfe, executive director of the National Energy Assistance Directors' Association, a group that represents state directors of energy-assistance programs. In some states, attempts to buy some time by delaying the date at which utilities are allowed to begin disconnections are done. Cutting off utility is prohibited during the winter because the effects could be life-threatening.

A preliminary survey by the National Energy Assistance Directors' Association found that the number of families receiving federal energy-assistance funds is the largest in 16 years. For the 2008 federal fiscal year, it topped 5.8 million, a 3.8% increase over fiscal-year 2007.

Some states have seen double-digit increases in the number of families receiving public assistance to pay their utility and fuel bills. The increases go as high as 80% in Nevada and 44% in Oklahoma. States control how they dole out their share of the $2.5 billion in federal funds distributed under the Low Income Home Energy Assistance Program.

Many states are asking Congress to give increases in the funds for energy assistance as the troubled homes also increase.

The housing and home construction markets continued and will further feel the beating at least until the end of the year. This was according to economists who spoke Thursday at a forecast conference sponsored by the National Association of Home Builders.

The economists said the worsening housing market facilitated the U.S. economy decline and into a recession that will continue through June. They said high oil prices will continue to slow down consumer spending, and the ongoing credit crisis and stricter policies will make home financing difficult which will stall a housing recovery until at least 2009.

Declines in home prices negatively affect homeowners' wealth, and some mortgage borrowers have found that the value of their homes has fallen below the price of their mortgages, sending more homeowners into foreclosure.

An economist forecasted that Americans will lose $400 billion in lost home value.

"All this downward momentum in home prices is really screwing up the financial markets," said NAHB chief economist David Seiders, adding, "Housing production will continue to drag on the economy until the first quarter of 2009."

Though the tax rebates from the government's economic stimulus package are expected to helpincrease the consumer spending and confidence, any recovery in housing is forecasted to be slow - a bad sign for the overall economy.

"After the stimulus checks take their effect, the economy will need something else to support it in the first quarter of 2009, or else the economy is in trouble," said Seiders.

A real estate market's comeback may come earlier than a homebuilders' recovery, according to the economists.

"The explosion of single-family building permits in 2003 to 2005 produced an unsustainable, unprecedented run-up in the building economy," said Seiders. Together with the collapse of the housing market, a big surplus of unsold, unoccupied new homes flooded the market.

The National Association of Realtors report released Tuesday, there were 4.1 million available for sale, which is about 9.9 month supply. The high inventory directly competes with the builders, as they have to limit their construction of new homes until supply and demand levels are more stable.

But economists continued to be optimistic about a turnaround for builders in 2009.
 

The Mortgage Bankers Association reported in its weekly application survey a decline in the volume of mortgage application by 14.2% during the week ending April 18. The MBA’s application index dropped to 637.6 from 743 the previous week.

The MBA's application index fell to 637.6 from 743.4 the previous week. The index was started in the March 1990 when they MBA where the value of the index was 100. A reading of 637.6 means mortgage application activity is 6.376 times higher than it was when the MBA began tracking the data.

The index was at its highest during the housing boom particularly the week ending May 30, 2003 at 1,856.7.

Refinance volume declined 20.2%, while purchase volume fell 6.4%. Refinance applications covers 49.2% of total applications compared with 53.5% a week earlier.

The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50% of all residential retail mortgage originations each week.

Application volume fell as interest rates for fixed-rate loans moved higher.

The average interest rate for traditional, 30-year fixed-rate mortgages rose to 6.04% from 5.74% the previous week. The average rate for 15-year fixed-rate mortgages, often a popular option for refinancing a loan, increased to 5.6% from 5.27%.

The rate for one-year adjustable-rate mortgages fell to 6.93% from 7.02% the previous week.