This Week in Real Estate: December 18, 2017

Positive news released This Week in Real Estate by Genworth Mortgage Insurance about sales activity from the first-time homebuyer community during the third quarter. Below are a few highlights from the second week of December that influence our business:

* First-Time Homebuyers Suddenly Flood Housing Market. First-time homebuyer demand surged to its highest level in 17 years during the third quarter of 2017, according to the First-Time Homebuyer Market Report from Genworth Mortgage Insurance, an operating segment of Genworth Financial. The report, which is drawn from a data set of 21 million first-time homebuyers over a 24-year span, showed first-time homebuyers purchased 601,000 single-family homes in the third quarter. This is up 6% from 567,000 homes during the third quarter of 2016, and the highest quarterly purchase volume since the third quarter of 2000. First-time homebuyers accounted for 40% of all single-family homes sold in the third quarter and 56% of all purchase mortgages financed, the report showed.
* Downpayments at Record Highs as Home Prices Rise. Homebuyers ponied up the highest downpayments on record to purchase homes in the third quarter of 2017. ATTOM Data Solutions’ Residential Property Loan Origination Report says that the median down payment for a single-family home or condo purchased with financing during the quarter rose to $20,000 from $18,162 in the second quarter of this year. In the third quarter of last year the median was $14,400. The most recent number is the highest in ATTOMs records which date back to 2000. The $20,000 downpayment represents 7.6 percent of the median sales price during the quarter of $263,000. The percentage amount was also a recent high, up from 7.1 percent the previous quarter and 6.1 percent in the third quarter of 2016. It was the highest downpayment percentage since the third quarter of 2013. The median downpayment exceeded $50,000 in 12 of the 99 statistical areas included in the report. The four highest amounts were all paid in California markets, with San Jose on top at $247,00 followed by San Francisco at $170,000, Los Angeles ($118,000) and Oxnard ($105,000). The fifth city on the list was Boulder, Colorado, with a median downpayment just under $100K.Full Story... http://www.mortgagenewsdaily.com/12132017_loan_metrics.asp

* Homeowners Equity Improves. The Financial Accounts of the United States for the third quarter of 2017 were published by the Board of Governors of the Federal Reserve System recently. In nominal terms, households’ owner-occupied real estate increased to $24.2 trillion in the third quarter of 2017, $1.572 billion more than the third quarter of 2016. Total home mortgage debt outstanding was $10.0 trillion on a not seasonally adjusted basis, $279 billion more than the same period of 2016. The market value of households’ real estate grew faster than underlying home mortgage debt. As a result, the value of owners’ equity in real estate, the difference between the value of owner-occupied real estate and home mortgage debt, rose $1.3 trillion in the past four quarters and reached $14.1 trillion over the third quarter of 2017. Since 2012, home price appreciation has largely contributed to the increase in the owners’ equity share of home values. The market value of households’ real estate rose by 48.6% from 2012 to the present, while mortgage debt increased 3.0%. The ratio of owners’ equity in real estate as a percentage of household real estate rose to 58.5% in the third quarter of 2017, approaching its pre-recession level.Full Story... http://eyeonhousing.org/2017/12/homeowners-equity-improves/

Have a productive week.

Jason


This Week in Real Estate: December 11, 2017

CoreLogic released This Week in Real Estate that homeowners realized an 11.8% increase in home equity, totaling 870.6 billion dollars, between Q3 2017 and the same time period the prior year. Below are a few highlights from the first week of December that influence our business:

* Homeowner Equity Increased by Almost $871 Billion in Q3 2017. CoreLogic released its Q3 2017 home equity analysis Thursday which shows that U.S. homeowners with mortgages (roughly 63 percent of all homeowners) have collectively seen their equity increase 11.8 percent year over year, representing a gain of $870.6 billion since Q3 2016. Additionally, homeowners gained an average of $14,888 in home equity between Q3 2016 and Q3 2017. Western states led the increase, while no state experienced a decrease. Washington homeowners gaining an average of approximately $40,000 in home equity and California homeowners gaining an average of approximately $37,000 in home equity. On a quarter-over-quarter basis, from Q2 2017 to Q3 2017, the total number of mortgaged homes in negative equity decreased 9 percent to 2.5 million homes, or 4.9 percent of all mortgaged properties. Year over year, negative equity decreased 22 percent from 3.2 million homes, or 6.3 percent of all mortgaged properties, from Q3 2016 to Q3 2017.

* FHFA Increases Loan Limits in Nearly Every Area of U.S. for 2018. The Federal Housing Administration announced Thursday that nearly every area of the U.S. will see FHA loan limits increase in 2018. The new loan limits will take effect for FHA case numbers assigned on or after Jan. 1, 2018. FHA is required by the National Housing Act, as amended by the Housing and Economic Recovery Act of 2008, to set Single Family forward loan limits at 115% of median house prices, subject to a floor and a ceiling on the limits. FHA calculates forward mortgage limits by Metropolitan Statistical Area and county. Back in 2016, the FHA increased loan limits for just 188 counties. Then, in 2017, this number jumped to 2,948 counties that saw an increase. And now, the number of counties increased even further to 3,011 counties for 2018. In high-cost areas, the FHA’s loan limit ceiling will increase to $679,650, up from $636,150 this year. The floor will also increase from $275,665 to $294,515 in 2018. However, in 223 counties, the FHA loan limits will remain the same.Full Story... https://www.housingwire.com/articles/42038-fha-increases-loan-limits-in-nearly-every-area-of-us-for-2018


*
 Consumers Expect Strong Increases in Housing Costs. After dropping in October from what had been an all-time high the previous month, Fannie Mae’s Home Purchase Sentiment Index (HPSI) resumed its upward trek, increasing by 2.6 points in November to 87.8, Strong responses to questions in the National Housing Survey (NHS) to questions about whether it was a good time to buy a home and expectations for home prices were the primary drivers of the index gains. “In November, the HPSI rebounded to near its all-time high, returning the index to its gradual upward trend and suggesting fairly stable consumer home-buying attitudes,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “These results are consistent with our expectation that the housing market will continue its modest expansion going forward. The net share of respondents who said now is a good time to buy a home increased 7 percentage points to 29, erasing the previous month’s 6-point drop. The net remains down 1 percentage point compared to the same period last year.  The net share who view it as a good time to sell rose 4 points to 34 and is now 21 percentage points higher than last November. The net share who said home prices will go up in the next 12 months increased 6 percentage points in November.Full Story... http://www.mortgagenewsdaily.com/12082017_national_housing_survey.asp

Have a productive week.

Jason


This Week in Real Estate: December 4, 2017

While new home sales experiences the strongest reading in a decade according to HUD and the Census Bureau This Week in Real Estate, home builder confidence in November reached the second highest reading on record since the recession. Below are a few highlights from the final week of November that influence our business:

* New Home Sales Reach Strongest Pace in a DecadeContracts for new, single-family home sales expanded by 6.2% in October to a 685,000 seasonally adjusted annual rate, according to estimates from the joint release of HUD and the Census Bureau. The strongest reading in a decade continues new home sales on a positive growth trend. The expansion is supported by ongoing job growth and improving household formations, as well as tight existing home inventory. Despite some volatility in the month-to-month sales figures, October marks the sixth month in 2017 at an annual sales pace of more than 600,000. New home sales through October are running 8.9% higher than this time in 2016, in line with NAHB’s forecast. Regionally, there was sales growth in all regions. On a year-to-date basis, home sales are up 30% in the Northeast, up 18% in the Midwest, 6% higher in the West, and up 1% in the South compared to September 2017.
* Pending Home Sales Strengthen 3.5% in October. Pending home sales rebounded strongly in October following three straight months of diminishing activity, but still continued their recent slide of falling behind year ago levels, according to the National Association of Realtors. All major regions except for the West saw an increase in contract signings last month. NAR’s 2017 Profile of Home Buyers and Sellers – released last month – revealed that homeowners typically stayed in their home for 10 years before selling (an all-time survey high). Prior to 2009, sellers consistently lived in their home for a median of six years before selling. The PHSI in the Northeast inched forward 0.5 percent to 95.0 in October, but is still 1.9 percent below a year ago. In the Midwest the index increased 2.8 percent to 105.8 in October, but remains 0.9 percent lower than October 2016. Pending home sales in the South jumped 7.4 percent to an index of 123.6 in October and are now 2.0 percent higher than last October. The index in the West decreased 0.7 percent in October to 101.6, and is now 4.4 percent below a year ago.Full Story... https://www.nar.realtor/newsroom/pending-home-sales-strengthen-35-percent-in-october

* Home Builder Confidence Hits 8-Month High in November. A monthly reading of home builder sentiment rose two points in November to 70, according to the National Association of Home Builders. This comes after rising four points in October. Anything above fifty is considered positive sentiment. November’s reading is the highest since March of this year and the second highest on record since before the recession. The index stood at 63 in November 2016. Regionally, on a three-month moving average, builder confidence in the Northeast jumped five points to 54 and rose one point to 69 in the South. Both the West and Midwest remained unchanged at 77 and 63, respectively.

Have a productive week.

Jason


This Week in Real Estate: November 27, 2017

The National Association of Realtors released This Week in Real Estate that the pace of existing-home sales in October was the strongest it has been since June. Below are a few highlights from the third week of November that influence our business:

* Existing Home Sales Grow 2% in October. Existing-home sales increased in October to their strongest pace since earlier this summer, but continual supply shortages led to fewer closings on an annual basis for the second straight month, according to the National Association of Realtors. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 2.0 percent to a seasonally adjusted annual rate of 5.48 million in October from a downwardly revised 5.37 million in September. After last month’s increase, sales are at their strongest pace since June (5.51 million), but still remain 0.9 percent below a year ago. Existing-home sales in the West grew 2.4 percent to an annual rate of 1.27 million in October, and are now 0.8 percent above a year ago. The median price in the West was $375,100, up 7.8 percent from October 2016. The median existing-home price2 for all housing types in October was $247,000, up 5.5 percent from October 2016 ($234,100). October’s price increase marks the 68th straight month of year-over-year gains.
* Freddie Mac November 2017 Outlook. “It’s unlikely the economic environment will be much more favorable for housing and mortgage markets in 2018 and 2019. We forecast that interest rates will remain low by historical standards, but gradually creep higher over the next two years. We also forecast that housing construction will gradually pick up, helping to supply more homes to inventory-starved markets. More housing supply and modestly higher rates will lead to a moderation in house price growth. Refinance activity will drop to very low levels and the mortgage market will be dominated by purchase activity,” said Freddie Mac Chief Economist Sean Becketti. Modest economic growth, robust job gains, and low interest rates make for a favorable economic environment for housing and mortgage markets. But despite the favorable environment, housing markets have stalled a bit through summer and into fall. A lack of available for-sale inventory is helping to contribute to an acceleration in home prices.Full Story... http://freddiemac.mwnewsroom.com/press-releases/freddie-mac-november-2017-outlook-otcqb-fmcc-1325624?feed=429e0be3-9aef-4a3a-9775-43f8e470d510
* Once Hot Apartment Construction Cooling as U.S. Housing Engine. Faster apartment building was instrumental in pulling the U.S. housing market out of its slump a decade ago. Now, that engine is starting to throttle back. The supply of apartments and condominiums has surged in recent years as builders responded to rising demand, fueled in part by young Americans who preferred to rent rather than purchase a home in the aftermath of the recession. A surge in prices for single-family properties, as the real-estate market recovered from its 2006 plunge, also made apartments more attractive for both builders and people unable to buy.  A Commerce Department report on Friday showed completions of multifamily units in October reached the fastest annualized rate in almost three decades. What’s more, the pipeline of apartments under construction is leveling off from a 42-year high reached at the start of 2017. And the number of multifamily units authorized but not yet started also is cooling as builders attempt to calibrate the supply.

Have a productive week.

Jason


This Week in Real Estate: November 20, 2017

Favorable news from the new construction sector This Week in Real Estate with the three month-moving average ending in October for single-family housing starts rising to a post-recession high, while builder confidence in November reached the second highest reading since July 2005. Below are a few highlights from the second week of November that influence our business:

* Housing Starts Rise in OctoberTotal housing starts increased in October, with solid readings from the single-family sector. Total starts increased 13.7% to a 1.29 million seasonally adjusted annual rate, according to the joint data release from the Census Bureau and HUD. A jump in multifamily construction also increased the headline rate. Single-family starts increased for the month, rising to an 877,000 seasonally adjusted rate in October. This monthly annualized rate matches the post-recession high pace set in February of this year. However, the three month-moving average for single-family starts is at a post-recession high (860,000). Single-family starts are up more than 8% year-to-date compared to 2016 as limited existing inventory and solid builder confidence make for positive market conditions. Single-family permits, a reasonable indicator of future construction conditions, are running 10% higher on a year-to-date basis. Part of the gain for single-family construction in October was a rebound in Florida and Texas after project delays in September. Single-family starts in the South were up 17% compared to September.
* CoreLogic: Mortgage Delinquency Rates Lowest in More Than a Decade. CoreLogic released its monthly Loan Performance Insights Report Tuesday which shows that, nationally, 4.6 percent of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in August 2017. This represents a 0.6 percentage point year-over-year decline in the overall delinquency rate compared with August 2016 when it was 5.2 percent. As of August 2017, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.6 percent, down from 0.9 percent in August 2016. This was the lowest foreclosure inventory rate for the month of August in 11 years since August 2006 when it was 0.5 percent. The rate for early-stage delinquencies, defined as 30-59 days past due, was 2 percent in August 2017, down slightly from 2.1 percent in August 2016. The share of mortgages that were 60-89 days past due in August 2017 was 0.7 percent, unchanged from August 2016. The serious delinquency rate (90 days or more past due) declined 0.5 percentage points year over year from 2.4 percent in August 2016 to 1.9 percent in August 2017. The 1.9 percent serious delinquency rate in June, July and August of this year marks the lowest level for any month since October 2007 when it was also 1.9 percent, and is also the lowest for the month of August since 2007 when the serious delinquency rate was 1.7 percent. Alaska was the only state to experience a year-over-year increase in its serious delinquency rate in August 2017.

* Builder Confidence Nears Post Crash High. Builder confidence increased for the second consecutive month after taking a hit in September from the late summer hurricanes.  The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) increased 2 points in November, hitting 70, the highest score since March.  It was also the second highest reading for the index which measures NAHB’s new home builder members confidence in the new home market since July 2005.  “November’s builder confidence reading is close to a post-recession high – a strong indicator that the housing market continues to grow steadily,” said NAHB Chairman Granger MacDonald. Regional HMI scores are presented as three-month moving averages.  The Northeast jumped 5 points to 54 and the South rose 1 point to 69. Both the West and Midwest remained unchanged at 77 and 63, respectively. NAHB Chief Economist Robert Dietz commented, “Demand for housing is increasing at a consistent pace, driven by job and economic growth, rising homeownership rates and limited housing inventory.  With these economic fundamentals in place, we should see continued upward movement of the single-family housing market as we close out 2017.”

 

Have a productive week.

Jason


This Week in Real Estate: November 13, 2017

Favorable news This Week in Real Estate from the U.S. Census Bureau regarding homeownership. For the second time in 2017, homeownership has increased. In other news, as inventory constraints still exist in most markets across the country, the fact that new construction spending is well ahead of last year provides some optimism that supply may start to relieve the pressure of demand. Below are a few highlights from the last week of October that influence our business:

* Homeownership Rate Improves For Second Time in 2017. The homeownership rate improved to 63.9 percent in the third quarter—the second time it has inched up this year, slightly topping 63.7 percent in the second quarter and 63.5 percent this time last year, according to the U.S. Census Bureau’s recent Quarterly Housing Vacancies and Homeownership report. Approximately 87 percent of housing was occupied in the third quarter, with 55.7 percent owner-occupied and 31.4 percent renter-occupied. Owner-occupied and renter-occupied housing accounted for 55.5 percent and 31.6 percent shares, respectively, in the second quarter of this year, and 55.5 percent and 31.8 percent shares, respectively, in the first quarter. The homeownership rate in the third quarter was again highest in the Midwest, at 69.1 percent, and the South, at 65.5 percent. The rate in the Northeast was 60.4 percent, while the rate in the West was 58.9 percent.
Full Story… http://rismedia.com/2017/10/31/homeownership-rate-improves-second-time-2017/?utm_source=newsletter&utm_medium=email&utm_campaign=eNews

* Metro Home Prices Maintain Fast Growth in Third Quarter; Rise 5.3%. Severely lacking inventory levels across the country pinched sales growth and kept home prices rising at a steady clip in nearly all metro areas in the third quarter, according to the latest quarterly report by the National Association of Realtors. The national median existing single–family home price in the third quarter was $254,000, which is up 5.3 percent from the third quarter of 2016 ($241,300). Single–family home prices last quarter increased in 92 percent of measured markets, with 162 out of 177 metropolitan statistical areas (MSAs) showing sales price gains in the third quarter compared with the third quarter of 2016 (the most since the second quarter of 2015, at 93 percent). In the West, existing–home sales increased 2.8 percent in the third quarter and are 1.9 percent above a year ago. The median existing single–family home price in the West increased 7.0 percent to $373,700 in the third quarter from the third quarter of 2016.
Full Story… https://www.nar.realtor/newsroom/metro-home-prices-maintain-fast-growth-in-third-quarter-rise-53-percent

* Single Family and Multifamily Construction Spending Post Gains. NAHB analysis of Census Construction Spending data shows that total private residential construction spending stood at a seasonally adjusted annual rate (SAAR) of $515.4 billion in September, virtually unchanged from downwardly revised August estimates. The total private residential construction spending was 9.6% higher than a year ago. Residential spending was flat for the month but is still running well ahead of the 2016 pace, especially that single-family number. Single-family construction was up 0.2 percent month-over-month to a rate of $265.59 billion, but that contributed to the 11.9 percent annual growth. On an unadjusted basis, residential spending in September, at $46.41 billion, represented more than half of the total $83.57 billion spent on all privately funded construction. Residential spending through August came to $345.71 billion, up 11.7 percent over the same period last year. Single family construction spending for the month was estimated at an unadjusted $24.73 billion and multi-family at $5.261. Year-to-date spending in the two categories was 8.9 percent and 4.3 percent higher than during the same period in 2016.
Full Story… http://eyeonhousing.org/2017/10/cash-sales-retreat-as-a-share-of-new-home-purchases/

Have a productive week.

Jason


This Week in Real Estate: November 6, 2017

Good Morning!

Favorable news This Week in Real Estate from the U.S. Census Bureau regarding homeownership. For the second time in 2017, homeownership has increased. In other news, as inventory constraints still exist in most markets across the country, the fact that new construction spending is well ahead of last year provides some optimism that supply may start to relieve the pressure of demand. Below are a few highlights from the last week of October that influence our business:

* Homeownership Rate Improves For Second Time in 2017. The homeownership rate improved to 63.9 percent in the third quarter—the second time it has inched up this year, slightly topping 63.7 percent in the second quarter and 63.5 percent this time last year, according to the U.S. Census Bureau’s recent Quarterly Housing Vacancies and Homeownership report. Approximately 87 percent of housing was occupied in the third quarter, with 55.7 percent owner-occupied and 31.4 percent renter-occupied. Owner-occupied and renter-occupied housing accounted for 55.5 percent and 31.6 percent shares, respectively, in the second quarter of this year, and 55.5 percent and 31.8 percent shares, respectively, in the first quarter. The homeownership rate in the third quarter was again highest in the Midwest, at 69.1 percent, and the South, at 65.5 percent. The rate in the Northeast was 60.4 percent, while the rate in the West was 58.9 percent.
Full Story… http://rismedia.com/2017/10/31/homeownership-rate-improves-second-time-2017/?utm_source=newsletter&utm_medium=email&utm_campaign=eNews

* Metro Home Prices Maintain Fast Growth in Third Quarter; Rise 5.3%. Severely lacking inventory levels across the country pinched sales growth and kept home prices rising at a steady clip in nearly all metro areas in the third quarter, according to the latest quarterly report by the National Association of Realtors. The national median existing single–family home price in the third quarter was $254,000, which is up 5.3 percent from the third quarter of 2016 ($241,300). Single–family home prices last quarter increased in 92 percent of measured markets, with 162 out of 177 metropolitan statistical areas (MSAs) showing sales price gains in the third quarter compared with the third quarter of 2016 (the most since the second quarter of 2015, at 93 percent). In the West, existing–home sales increased 2.8 percent in the third quarter and are 1.9 percent above a year ago. The median existing single–family home price in the West increased 7.0 percent to $373,700 in the third quarter from the third quarter of 2016.
Full Story… https://www.nar.realtor/newsroom/metro-home-prices-maintain-fast-growth-in-third-quarter-rise-53-percent

* Single Family and Multifamily Construction Spending Post Gains. NAHB analysis of Census Construction Spending data shows that total private residential construction spending stood at a seasonally adjusted annual rate (SAAR) of $515.4 billion in September, virtually unchanged from downwardly revised August estimates. The total private residential construction spending was 9.6% higher than a year ago. Residential spending was flat for the month but is still running well ahead of the 2016 pace, especially that single-family number. Single-family construction was up 0.2 percent month-over-month to a rate of $265.59 billion, but that contributed to the 11.9 percent annual growth. On an unadjusted basis, residential spending in September, at $46.41 billion, represented more than half of the total $83.57 billion spent on all privately funded construction. Residential spending through August came to $345.71 billion, up 11.7 percent over the same period last year. Single family construction spending for the month was estimated at an unadjusted $24.73 billion and multi-family at $5.261. Year-to-date spending in the two categories was 8.9 percent and 4.3 percent higher than during the same period in 2016.
Full Story… http://eyeonhousing.org/2017/10/cash-sales-retreat-as-a-share-of-new-home-purchases/

Have a productive week.

Jason


This Week in Real Estate: October 30, 2017

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While the Pending Home Sales Index is at it’s lowest level since January 2015, data released by HUD and the Census Bureau This Week in Real Estate revealed a significant jump in new home sales in September. Year-to-date through September new home sales is running 8.6% higher than the same time a year ago. Below are a few highlights from the fourth week of October that influence our business:

* Jump for New Home Sales in September. Contracts for new home sales expanded by 18.9% in September to a 667,000 seasonally adjusted annual rate, according to estimates from the joint data release of HUD and the Census Bureau. The solid reading in September returns new home sales to the positive growth trend it has been on for several years. This expansion is supported by ongoing job growth and improving household formations, as well as tight existing home inventory. September marks the fifth month in 2017 at an annual sales pace of more than 600,000. New home sales through September are running 8.6% higher than this time in 2016. Regionally, there was sales growth in all regions. On a year-to-date basis, new home sales are up 28% in the Northeast, up 12% in the West, 6% higher in the South, and up 4% in the Midwest compared to this time in 2016. Full Story… http://eyeonhousing.org/2017/10/jump-for-new-home-sales-in-september/

* Pending Home Sales Flatten in September. The Pending Home Sales Index, unchanged in September, has fallen on an annual basis in five of the past six months, and is at its lowest level since January 2015. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), remained unchanged at 106.0 from a downwardly revised August level. The PHSI is now 3.5% below its level a year ago. The PHSI increased 1.9% in the West, 1.4% in the Midwest and 1.2% in the Northeast, but fell 2.3% in the South. Year-over-year, the PHSI decreased in all four regions, ranging from 2.4% in the Northeast to 5.0% in the South (2.9% in the West). Full Story… https://www.nar.realtor/newsroom/pending-home-sales-flatten-in-september

* Cash Sales Retreat as a Share of New Home Purchases. NAHB analysis of the most recent Quarterly Sales by Price and Financing published by the Census Bureau reveals that cash sales accounted for just 4.8% of the total, down from 6.5% in the second quarter. The share of new home sales financed with conventional mortgages rose to 72.8%, the highest share since the third quarter of 2016.

FHA-loans financed 14.3% of new home sales during the third quarter of 2017. Census data and NAHB calculations show that new home sales backed by VA products fell to 11,000 (-4,000) in the third quarter of 2017, and market share declined from 8.8% to 7.5%. Although cash sales make up a small portion of new home sales, they constitute a larger share of existing home sales. Roughly 20% of existing home transactions were all-cash sales in September, according to estimates from the National Association of Realtors.
Full Story… http://eyeonhousing.org/2017/10/cash-sales-retreat-as-a-share-of-new-home-purchases/

Have a productive week!

Jason


This Week in Real Estate: October 23, 3017

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Builder confidence reaches its highest reading since May and the unemployment rate settles into a 16-year low fueling early fourth quarter optimism This Week in Real Estate. Below are a few highlights from the third week of October that influence our business:
* CoreLogic Releases First HPI Forecast Validation ReportCoreLogic released its first HPI Forecast Validation Report on Thursday that publicly compares its 12-month HPI Forecast to the actual HPI Index. The HPI Forecast is a projection of home prices using the HPI and other economic variables. The first validation report shows: (1) the national forecast prediction of a 5.4 percent increase was within 0.7 percent of the 6.1 percent increase of the HPI for the 12-month period ending in June 2017, (2) the most accurate forecast was for the Phoenix-Mesa-Scottsdale, AZ area, which at 6.6 percent came within 0.4 percent of the actual HPI increase of 6.2, and (3) the widest gap was in Seattle-Bellevue-Everett, WA with an 8.4 percent under-estimation of actual increase.
* Builder Confidence Rises Four Points in October. Builder confidence in the market for newly-built single-family homes rose four points to a level of 68 in October on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This was the highest reading since May. This current reading shows that home builder sentiment is rebounding from the initial reaction of concern due to hurricanes in Florida and Texas, including the anticipated effects of repair and restoration work. However, builders need to be mindful of long-term, regional impacts from the storms, such as intensified material price increases and labor shortages. It nonetheless is encouraging to see builder confidence return to the high 60s levels we saw in the spring and summer. Looking at the three-month moving averages for regional HMI scores, the South rose two points to 68 and the Northeast rose one point to 50. Both the West and Midwest remained unchanged at 77 and 63, respectively.
* Jobless Claims Are The Lowest Since 1973. America’s job market is red hot. Only 222,000 American’s filed jobless claims for the first time last week, the fewest since March 1973. Unemployment is at a 16-year low of 4.2%. When unemployment peaked at 10% in 2009, shortly after the Great Recession, initial jobless claims were over 650,000.

Have a productive week!

Jason


This Week in Real Estate: October 16, 2017

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The Consumer Sentiment Index for early October was released This Week in Real Estate, reaching its highest level since the start of 2004. Below are a few highlights from the second week of October that influence our business:

* Lot Values Stable at Record High. Single-family lot prices remained at record high levels in 2016, with half of the lots priced at or above $45,000. According to NAHB’s analysis of the Census Bureau’s Survey of Construction (SOC) data, the median lot value reached $45,000 for the first time in 2015 exceeding the previous record of $43,000 reached in 2006. The Pacific division where densities are high and developed land is scarce has the smallest lots. However, high regulatory costs push the median lot value to $78,900, the second most expensive value in the nation. The lot values here are fast approaching the housing boom levels, when half of the lots were priced at above $82,000. The Pacific division lots also stand out for being most expensive in the nation in terms of per acre costs.
Full Story… http://eyeonhousing.org/2017/10/lot-values-remain-record-high-in-2016/

* Consumer Confidence Soars to Highest Level Since 2004. Consumer confidence crushed expectations in October, flying by a seven-month high hit in August. The consumer sentiment index, a survey of consumers by The University of Michigan, rose to 101.1 in October, far ahead of the 95 economists polled by Reuters anticipated. “Consumer sentiment surged in early October, reaching its highest level since the start of 2004,” Richard Curtin, chief economist for the Surveys of Consumers, said in a statement. Curtin noted that current trends indicated consumer spending continuing to expand through the middle of next year. He says, if that pace continues, it would mark the second longest expansion period since the mid-1800s. The economist says October’s numbers reflect “an unmistakable sense among consumers that economic prospects are now about as good as could be expected.”
Full Story… https://www.cnbc.com/2017/10/13/october-us-consumer-sentiment.html?__source=mnd%7Cnews%7C&par=mnd

* Serious Delinquency Rate for Home Loans Holds Steady at a Near 10-Year Low. CoreLogic released its month Loan Performance Insights Report on Tuesday which shows that, nationally, 4.6 percent of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in July 2017. This represents a 0.9 percentage point year-over-year decline in the overall delinquency rate compared with July 2016 when it was 5.5 percent. As of July 2017, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.7 percent, down from 0.9 percent in July 2016 and the lowest since the rate was also 0.7 percent in July 2007. “While the U.S. foreclosure rate remains at a 10-year low as of July, the rate across the 100 largest metro areas varies from 0.1 percent in Denver to 2.2 percent in New York,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Likewise, the national serious delinquency rate remains at 1.9 percent, unchanged from June, and when analyzed across the 100 largest metros, rates vary from 0.6 percent in Denver to 4.1 percent in New York.”
Full Story… http://www.corelogic.com/about-us/news/corelogic-reports-serious-delinquency-rate-for-home-loans-holds-steady-at-a-near-10-year-low.aspx

Have a productive week!

Jason


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