The most prominent discussion topic This Week in Real Estate centered around the October 3 effective date of TRID or better known as the Know Before You Owe rule. As you move forward please be cognizant of how the rule change impacts your clients and that your settlement service provider partners (mortgage, title and escrow) are prepared to successfully navigate the closing process. Below are a few of the highlights from the final week in September that influence our business:
* After 8 Years Home Values Finally Eclipse 2007 Peak. According to the Home Price Index (HPI), a home-valuation tracker published by the Federal Housing Finance Agency (FHFA), U.S. property values rose in July, marking the 20th straight month of growth nationwide; and forty-first out of 42. In July the HPI climbed to 224.5, a 0.6 percent increase from the month prior which moved the HPI to its highest reading of all-time. The previous peak was 224.0, set in April 2007 at the height of last decade’s housing boom. Full Story… http://themortgagereports.com/18248/fhfa-home-price-index-all-time-high-2007
* Pending Sales Retreat. The Pending Home Sales Index (PHSI) decreased in August, but has increased year-over-year for 12 consecutive months. The PHSI, a forward looking indicator based on signed contracts, decreased 1.4% in August from the prior month, but is up 6.1% from the same month a year ago. While increasing in the West, the PHSI declined in the other three regions month-over-month. Year-over-year, the PHSI was up in all four regions, ranging from 8.9% to 4.1%. Full Story… http://eyeonhousing.org/2015/09/pending-sales-retreat/
* Consumer Confidence Rebounded in September. The Conference Board released its Consumer Confidence Index for September this week. The index is a composite of separate indexes tracking consumers’ assessments of current business, income and employment conditions, as well as their expectations for the future. The Consumer Confidence Index increased to a level of 103.0 in September from 101.3 in August. The Index has rebounded to levels close to the pre-recession peak of 111.9 in July 2007. Full Story… http://eyeonhousing.org/2015/09/consumer-confidence-rebounded-in-september/
The Seattle and Portland/SW Washington markets are on pace to realize the highest number of home sales in 8 years as reported This Week in Real Estate by RealtyTrac. Below are a few of the highlights from the fourth week in September that influence our business:
* 54 Percent of U.S. Metros on Pace to Reach Eight-Year High in Home Sales in 2015 Based on Sales Through August. RealtyTrac released its August 2015 U.S. Home Sales Report Thursday, which shows single family home and condo sales through August were on pace for an eight-year high nationwide and in 110 of 204 metropolitan statistical areas. A total of 1,947,028 single family homes and condos sold through August in 2015, up 5.4 percent from the same time period a year ago to the highest total for the first eight months of the year since 2007, when there were 2,069,963 sales. The 110 metro areas on pace for at least an eight-year high in home sales through August included Los Angeles, Phoenix, Dallas, Denver, Riverside-San Bernardino, Detroit, Seattle, Tampa, Minneapolis and Portland. Full Story… http://www.realtytrac.com/news/home-prices-and-sales/realtytrac-u-s-home-sales-report-august-2015/
* New Home Sales Rise 5.7 Percent in August. Sales of newly built, single-family homes rose 5.7 percent to a seasonally adjusted annual rate of 552,000 units in August. The August sales rate was the highest in more than 7 years and 21.6 percent higher than sales in August 2014 of 454,000. Regionally, the Northeast, South and West posted respective monthly gains of 24.1 percent (24.1 percent year-over-year), 7.4 percent (27.6 percent year-over-year) and 5.4 percent (11.4 percent year-over-year). The Midwest registered a 9.1 percent decline for the month, however remained 15.4 percent higher than August 2014. The inventory of new homes for sale was 216,000 units in August. This is a 4.7 month supply at the current sales pace. Full Story… http://www.nahb.org/en/news-and-publications/Press-Releases/2015/september/new-home-sales-rise-5-point-7-percent-in-august.aspx
This Week in Real Estate has the answer to the long anticipated question: will the Feds raise interest rates during their two-day September meeting? Below are a few of the highlights from the third week in September that influence our business:
* Fed Leaves Interest Rates Unchanged.Thursday, for the 55th consecutive meeting, the Federal Open Market Committee (FOMC) voted to leave the Fed Funds Rate unchanged near 0.000 percent. The vote was 9-1 in favor of leaving the Fed Funds Rate near zero percent. Richmond Fed President Jeffrey Lacker was the lone dissent, preferring a 25 basis point increase in the Fed Funds Rate target range. Janet Yellen, the Fed’s chairwoman, described the decision as a close call and said the central bank still expected to raise interest rates later this year. The Fed has kept its benchmark interest rate close to zero since late 2008. “The recovery from the Great Recession has advanced sufficiently far and domestic spending has been sufficiently robust that an argument can be made for a rise in interest rates at this time. But, heightened uncertainties abroad, including the Chinese economy’s weakness, had persuaded the bank to wait at least a few more weeks for fresh data that might “bolster confidence” in continued growth. Full Story… http://www.nytimes.com/2015/09/18/business/economy/fed-leaves-interest-rates-unchanged.html?partner=rss&emc=rss&_r=0
* Builder Confidence at a Ten-Year High.The NAHB/Wells Fargo Housing Market Index increased one point in September to 62, the highest level in 10 years. Two of the three components increased: the present sales indicator rose one point to 67, and the traffic indicator increased two points to 47. Regional three-month moving averages were up on point in the Midwest (to 59), the South and West (to 64). FDIC data indicate that the volume of residential AD&C (acquisition, development and construction) loans outstanding expanded 4.7% during the second quarter of 2015, marking the ninth consecutive quarter of growth and up 16.4% on a year-over-year basis. Full Story… http://eyeonhousing.org/2015/09/eye-on-the-economy-builder-confidence-at-a-ten-year-high/
* U.S Foreclosure Activity Decreases 6 Percent in August.RealtyTrac released its August 2015 U.S. Foreclosure Market Report Thursday, which shows foreclosure filings – default notices, scheduled auctions and bank repossessions – in August, down 12 percent from the previous month and down 6 percent from a year ago. “Foreclosure starts in August continued to search for a new floor below even pre-recession levels, indicating the housing recovery of the past three years is built on a solid financing foundation,” said Daren Blomquist, vice president of RealtyTrac. A total of 45,072 U.S. properties started the foreclosure process for the first time in August, down 1 percent from previous month and down 19 percent from a year ago to lowest level since November 2005. A total of 41,308 U.S. properties were scheduled for a future foreclosure auction in August, down 14 percent from the previous month and down 19 percent from a year ago to the lowest level since May 2006. Full Story… http://www.realtytrac.com/news/foreclosure-trends/realtytrac-u-s-foreclosure-market-report-august-2015/
In what was a relatively quiet week nationally This Week in Real Estate, Fannie Mae was active introducing their Home Purchase Sentiment Index and announcing that they have lowered the mandatory waiting period for a mortgage following bankruptcy or distressed sale. Below are a few of the highlights from the second week in September that influence our business:
* Gap Between Appraiser and Homeowner Perception of Value Widens.Homeowner estimates of their home’s value exceeded appraiser opinions by a wider margin than in July, making August the seventh consecutive month of an increasingly wider gap between opinions. Quicken Loans reported this week appraiser opinions of home values were 2.65 percent lower than homeowner estimates in August, according to the company’s national Home Price Perception Index (HPPI). Homeowner opinions were 2.33 percent higher than appraiser opinions in July. “While the month-to-month number is interesting to examine, it is not the single most important factor of the HPPI report. Instead, the focus should be on the trend, the direction it’s heading and how fast,” said Quicken Loans Chief Economist Bob Walters. Contrary to the national result, appraiser value vs. homeowner perception of value was +2.26% in Portland and +0.55% in Seattle respectively. A positive value represents appraiser opinions that are higher than homeowner perceptions.
Full Story… http://www.quickenloans.com/press-room/2015/09/08/homeowners-overvalued-properties-7th-consecutive-month/
* Fannie Mae Introduces the Home Purchase Sentiment Index.Fannie Mae has launched the Home Purchase Sentiment Index (HPSI), which distills results from its consumer-focused National Housing Survey into a single, monthly, predictive indicator. The HPSI is designed to provide distinct signals about the direction of the housing market, helping industry participants to make better informed business decisions. The index provides the market a single number to track consumer attitudes focused on the housing market. Highlights of the August HPSI: the percent of respondents who said that it is a good time to buy a house rose to 63%, rising 2 percentage points from last month and those who say it is a good time to sell rose 2 percentage points to 47%. Full Story… http://www.fanniemae.com/portal/about-us/media/corporate-news/2015/6290.html?p=Media&s=News+Releases&from=RSS
* Distressed Sales Share Cracks Into Single Digits.While sales of REO and short sales continue to account for around one-fifth of all home sales in at least five states the share of distressed home sales is steadily returning to normal levels on a national basis. CoreLogic said on Thursday that REO sales accounted for 6 percent of all residential sales in June, the lowest share since September 2007 when it was 5.2 percent. Short sales made up 3.4 percent of the total. The combined distressed sales share, 9.4 percent, is down 2.4 percentage points from June 2014. At the peak in January 2009, 32.3 percent of all home sales nationally were distressed properties. The pre-crisis share of distressed sales was traditionally about 2 percent. Full Story… http://www.mortgagenewsdaily.com/09102015_corelogic_distressed_sales.asp
* Fannie Mae Lowers Mandatory Waiting Period After Bankruptcy, Short Sale and Pre-Foreclosure. It’s getting easier to get approved for a mortgage. Fannie Mae has reduced the mandatory waiting period for a mortgage after bankruptcy, short sale, or pre-foreclosure. Borrowers no longer need to wait 4 years before re-applying to get a mortgage. Borrowers can now re-apply for a loan just 2 years after a bankruptcy, short sale or pre-foreclosure. Full story… http://themortgagereports.com/16750/fannie-mae-waiting-period-bankruptcy-short-sale-foreclosur
This Week in Real Estate ended with increased speculation as to what the Feds will do with rates when they meet in two weeks. Following Friday’s August jobs report, that was hyped as an influencing factor to raise or not raise rates, resulted in just the opposite effect. The data was tame and did little to influence either side of the argument. Below are a few of the highlights from the first week in September that influence our business:
* CoreLogic Reports National Home Prices Rose by 6.9% Year Over Year in July 2015. On Tuesday CoreLogic released its July 2015 Home Price Index (HPI) which shows that home prices nationwide, including distressed sales, increased by 6.9 percent in July 2015 compared with July 2014. Ten states have experienced increased growth in the last year that matched or surpassed the nation as a whole; those states are: Colorado, Florida, Hawaii, Nevada, New York, Oregon, South Carolina, South Dakota, Texas and Washington. Including distressed sales, the five states with the highest home price appreciation were: Colorado (+10.4%), Washington (+9.9%), Nevada (+9.1%), Hawaii (+8.9%) and Oregon (+8.8%). Excluding distressed sales, the five states with the highest home price appreciation were: Colorado (+10.1%), Washington (+9.5%), Nevada (+9.1%), Oregon (+9.1%) and New York (+9.0%). Full Story… http://www.corelogic.com/about-us/news/corelogic-reports-national-home-prices-rose-by-6.9-percent-year-over-year-in-july-2015.aspx
* Mortgage Credit Availability Increases in August. Mortgage credit availability increased in August according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA). The MCAI increased 0.5 percent to 126.1 in August. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. Of the four component indices, the Jumbo MCAI saw the greatest loosening (up to 0.7 percent over the month) followed by Conventional MCAI (up 0.5 percent), the Government MCAI (up 0.4 percent), and the Conforming MCAI (up 0.3 percent). “Mortgage credit availability increased in August and has increased in eight of the last nine months,” said Mike Fratantoni, MBA’s Chief Economist. Full Story… https://www.mba.org/2015-press-releases/sept/mortgage-credit-availability-increases-in-august
* U.S. Construction Spending Hits a New Postrecession High.U.S. construction spending rose to the highest level in more than seven years in July. Total construction spending climbed 0.7% from the prior month to a seasonally adjusted annual rate of $1.083 trillion, the Commerce Department said Tuesday, the highest level since May 2008. Private building led the way, with both residential and nonresidential construction hitting new post recession highs. “The overall impression from the past few months is that the construction sector overall is the strongest part of the economy, with spending up at a remarkable 26% annualized rate in the three months to July,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. Full Story… http://blogs.wsj.com/economics/2015/09/01/u-s-construction-spending-hits-new-postrecession-high-2/
* Mortgage Rates at Recent Lows After Jobs Data. Mortgage rates fell to their lowest levels in more than a week on Friday, following the release of August’s official employment figures. While the headline job creation was weaker than expected, several components of the report offset the weakness. Previous months were revised to show better job creation, the unemployment rate fell to 5.1, and wages grew slightly faster than expected. Full story… http://www.mortgagenewsdaily.com/consumer_rates/509440.aspx
The good news This Week in Real Estate was the U.S. economy was in even better shape that we thought. The U.S. economy grew 3.7% in the second quarter, much higher than the first official estimate on growth of 2.3% and even higher than what economists were projecting, according to the Commerce Department’s measure of gross domestic product, the broadest measure of economic activity. Like the prior week’s closing and start of this week the stock market experienced continued volatility, but unlike the first few days the week ended in historical fashion. The Dow finished Thursday up 369 points and combined with Wednesday’s 619-point rally, it was the best two-day point gain for the Dow in its history, surpassing the previous record set in 2008. Below are a few of the highlights from the third week in August that influence our business:
* Pending Sales Maintain the Ride Up.The Pending Home Sales Index increased in July for the sixth time in seven months. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), increased 0.5% in July from an upwardly revised June report, and is up 7.4% from the same month a year ago. The positive pending sales report follows a strong 5.4% increase in July new home sales reported two days ago, and the 2.0% increase in July existing sales reported last week. Following a week of wrenching equity market volatility, improved home sales, coupled with a strong GDP report today, suggests continued good news for the existing sales market and for builders in 2015. Year-over-year, the PHSI was up 12.1% in the Northeast, 7.5% in the West, 6.5% in the South and 5.7% in the Midwest.
Full Story… http://eyeonhousing.org/2015/08/pending-sales-maintain-the-ride-up/
* RealtyTrac’s July 2015 U.S. Home Sales Report. A total of 1,344,129 single family homes and condos sold in the first six months of 2015, according to public record sales deeds collected by RealtyTrac, the highest number of sales in the first half of any year since 2007. The U.S. median home sales price in July was $189,500, up 2 percent from the previous month and up 2 percent from a year ago to the highest level since September 2008. “While the stock market may be on a roller coaster as of late, the housing market is still on solid ground, with eight-year low in cash sales combined with the eight-year high in overall sales volume in the first half of the year evidence that housing is successfully transitioning from an investor-driven recovery to one that is drawing in traditional buyers as a good foundation for sustainable growth going forward,” said Daren Blomquist, vice president at RealtyTrac. Full story… http://www.realtytrac.com/news/home-prices-and-sales/july-2015-u-s-home-sales-report/
* MBA Forecasts Housing Demand Over Next 10 Years.The Mortgage Bankers Association (MBA) has just released a paper, Demographics and the Numbers Behind the Coming Multi-Million increase in Households, forecasting housing demand over the next ten years. Their study used date from 1975 – 2014 a period encompassing several market and housing cycles and the short version of its conclusion was the “By 2024, demographic and economic changes will bring what could be one of the largest expansions in the history of the U.S. housing market – 15.9 million additional households.” Even if household formation remains at 2014 low rates, demographic changes alone should account for 13.9 million new households by 2024. Full Story… http://www.mortgagenewsdaily.com/08282015_housing_demand.asp
* International Buyers Flow Into U.S. Housing Market, China Tops List.This year, for the first time since the National Association of Realtors has tracked foreign buyers of U.S. real estate, buyers from China have surpassed for the first time Canadiens, Europeans, Mexicans and Middle Eastern home buyers as the top overseas purchasers of homes in the United States. Chinese investment in U.S. residential real estate has grown from a measly $50 million in 2000 to an eye-popping $28.6 billion in the year ending in March 2015, up 72 percent from a year earlier, double the amount spent a year earlier, surpassing all other foreign buyers. All told, overseas home buyers spent a record $104 billion buying U.S. homes in the 12 months ending in March 2015, with Chinese buyers leading the pack. In the 2014 survey, foreigners spent $92 billion on U.S. homes over a 12-month period, up 35 percent from a year earlier. Chinese buyers are now the biggest international buyers of U.S. real estate in terms of dollar volume, total units, and average price paid. Moreover, 76 percent of Chinese buyers pay cash. Full Story… http://www.realtytrac.com/news/company-news/international-buyers-flow-into-u-s-housing-market-china-tops-list/
Despite how the Dow Jones closed on Friday it had no impact on interest rates. This Week in Real Estate ended with the lowest interest rates in 3 months. Below are a few of the highlights from the third week in August that influence our business:
* Existing Sales Grow.Existing home sales steadily increased for the third consecutive month in July, and remained at the highest level since February 2007; but the first-time buyer share fell for the second consecutive month to the lowest level since January. Total existing home sales increased by 2.0% in July to a seasonally adjusted rate of 5.59 million units. July existing sales were up 10.3% from the same period a year ago, and have increased year-over-year for ten consecutive months. Existing sales increased by 4.1% in the South and 3.2% in the West, but were flat in the Midwest and fell 2.8% in the Northeast. Year-over-year, all four regions also increased, ranging from 11.3% in the West to 9.4% in the Northeast. Total housing inventory in July decreased by 0.4% from June, and is 4.7% below its level a year ago. At the current sales rate, the July unsold inventory represents a 4.8-month supply. The Distressed sales share decreased to 7% in July, down from 8% in June and 10% in May, compared favorably to the 9% share during the same month a year ago. The July median sales price of $234,000 was 5.6% above the same month a year ago, and represented the 41st consecutive month of year-over-year price increases.
Full Story… http://eyeonhousing.org/2015/08/existing-sales-grow-except-for-first-time-buyers/
* Builder Confidence, Single-Family Starts Rising.The most recent home construction data offer modest reasons to be optimistic, although risks remain. The August NAHB/Wells Fargo Housing Market Index continued its slow rise to a nine-plus-year high of 61, up one point from July. The index has been at 60 or more since June and above the tipping point of 50 since July 2014. Components measuring current and future home sales also rose to or remained at heights not seen since late 2005. The current sales index rose one point to 66 and the expected sales component remained at 70 after rising to that level in July. However, despite their rising levels of confidence, builders continue to face difficulty obtaining lots to build on and labor to build the homes. In July, Census estimates indicate that the pace of single-family starts was up 13%, as the recovery for home building continues. Single-family permits were down 1.9%, however. Overall, the July starts report indicates a rebalancing of multi-family development, while continuing the modest but steady progress in single-family production. Full story… http://www.realtytrac.com/news/company-news/q2-2015-loan-origination-report/
* Mortgage Rates on Year’s Longest Winning Streak.Mortgage rates moved moderately lower yet again. This extends a winning streak that began on July 14th, making it the longest positive trend in 2015. If this seems paradoxical in light of everything you may have heard about the Fed hiking rates this year, that’s normal. Market participants and pundits have a long history of getting too attached to a certain idea only to be punished by markets for the imbalance. Today’s rates are the lowest in 3 months.
Full Story… http://www.mortgagenewsdaily.com/consumer_rates/502546.aspx
* Serious Delinquency Rates Continue Their Descent.According to a report by the Mortgage Bankers’ Association the delinquency rate for mortgage loans on 1-4 unit residential properties decreased to a seasonally adjusted rate of 5.30% of all loans outstanding at the end of the second quarter 2015, 24 basis points less than its level in the first quarter of 2015 and 74 basis points below its level one year ago. The serious delinquency rate is now 3.2 percentage points below its peak level in the fourth quarter of 2009. As of the second quarter of 2015, the serious delinquency rate stands at 1.9%. Full Story… http://eyeonhousing.org/2015/08/serious-delinquency-rates-continue-their-descent/
This Week in Real Estate was a week of releases with multiple reports of second quarter findings and results including home prices, loan originations and distressed properties.Below are a few of the highlights from the second week in August that influence our business:
* Home Prices Rise in Nearly All Metro Areas in Second Quarter. The National Association of Realtors on Tuesday said that home prices in the second quarter rose in 163 of 176 metro areas. The median existing single-family home price rose $229,400 in the second quarter, up 8.2% from a year earlier. That was a slightly faster rate of increase than the 7.1% price rise seen in the first quarter. In the second quarter, 34 metro areas reported double-digit annual price gains, compared with 51 that reported such gains in the first quarter. The average supply of homes in the second quarter was 5.1 months, down from 5.5 months a year ago. Total existing-home sales, including single family and condo, increased 6.6 percent to a seasonally adjusted annual rate of 5.30 million in the second quarter from 4.97 million in the first quarter, and are 8.5 percent higher than the 4.89 million pace during the second quarter of 2014. In the West, existing-home sales climbed 8.1 percent in the second quarter and are 8.1 percent above a year ago. The median existing single-family home price in the West increased 9.6 percent to $325,200 in the second quarter from the second quarter of 2014.
* Residential Loan Originations Up 23 Percent.RealtyTrac released its Q2 2015 U.S. Residential Loan Origination Report Thursday, which shows 1,950,267 loans were originated on single family homes and condos in the second quarter, up 22 percent from the previous quarter and up 23 percent from a year ago to the highest level since the their quarter 2013. The total dollar volume of loans originated in the second quarter was nearly $540 billion, up 14 percent from the previous quarter and up 29 percent from a year ago. Refinance originations represented nearly $307 billion in the second quarter, 56.7 percent of total loan origination dollar volume, and purchase loan originations represented nearly $234 billion, 43.3 percent of total origination dollar volume. Of the more than 1.9 million loan originations in the second quarter, 737,824 were purchase loan originations, up 9 percent from a year ago. There were 1,212,442 refinance originations in the second quarter, an increase of 9 percent from the previous quarter and up 32 percent from a year ago.
* Mortgage Delinquencies and Foreclosures Continue to Drop in 2Q15. The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 5.30 percent of all loans outstanding at the end of the second quarter of 2015. This was the lowest level since the second quarter of 2007. The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the second quarter was 2.09 percent. This was the lowest foreclosure inventory rate since the fourth quarter of 2007. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 3.95 percent. This was the lowest level since the fourth quarter of 2007.
* Mortgage Credit Availability Rises in July.Mortgage credit availability increased in July according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association. The MCAI increased 2.9 percent to 125.5 in July. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. Of the four component indices, the Conventional MCAI saw the greatest loosening (up 5.2 percent over the month) followed by the Jumbo MCAI (up 4.7 percent), the Government MCAI (up 0.9 percent), and the Conforming MCAI (up 0.4 percent).
Following the release of the Labor Department’s strong July Jobs Report on Friday the most significant chatter This Week in Real Estate was the continued speculation that the Federal Reserve will increase interest rates in September. Below are a few of the highlights from the first week in August that influence our business:
* Home Prices Rose an Amazing 6.5% Annually in June. Home prices nationwide, including distressed sales, increased 6.5% in June 2015 compared with June 2014, according to the June 2015 CoreLogic Home Price Index. This change represents 40 months of consecutive year-over-year increases in home prices nationally. On a month-over-month basis, home prices nationwide, including distressed sales, increased by 1.7% in June 2015 compared to May 2015. Including distressed sales, 35 states and the District of Columbia were at or within 10% of their peak prices in June 2015. Fifteen states and the District of Columbia reached their new price peaks. Excluding distressed sales, home prices increased by 6.4% in June 2015 compared with June 2014 and increased by 1.4% month-over-month compared with May 2015. Highlights as of June 2015: including distressed sales, the five states with the highest home price appreciation were: Colorado (9.8%), Washington (8.9%), New York (8.3%), South Carolina (8%) and Nevada (8%). Excluding distressed sales, the five states with the highest home price appreciation were: Colorado (9.3%), New York (8.5%), Washington (8.3%), Oregon (8.2%) and Nevada (7.9%).
* Solid U.S. Jobs Report in July. U.S. employment rose at a solid clip in July and wages rebounded after a surprise stall in the prior month, signs of an improving economy that opened the door wider to a Federal Reserve interest rate increase in September. 215,000 jobs were added in July according to the Labor Department. The economy has added around 2.9 million jobs over the past 12 months. That’s down slightly from earlier this year, when the 12-month pace surpassed three million, but it is still well ahead of the 2.5 millions jobs added for the year ended July 2014. Job growth over the past three months reached its highest level since February, with an average of 235,000 jobs added per month. The unemployment rate held steady at 5.3%. A string of 16 out of 18 months over 200,000 additional jobs going into the September meeting may give the Fed the confidence it seeks to pull the trigger in September. “We view this report as easily clearing the hurdle needed to keep the Fed on track for a September rate hike. The bar for not moving is much higher,” said Rob Martin, an economist at Barclays in New York. The U.S. central bank said its policy-setting committee anticipated it would be appropriate to raise lending rates when it has seen “some further improvement” in the jobs market. It has not raised rates since 2006. Given the accumulated progress to date and the most likely near term improvements, today’s employment report brings us one step closer on the path to a September liftoff. Full story… http://blogs.wsj.com/economics/2015/08/07/the-july-jobs-report-in-12-charts/?mod=marketbeat&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Feconomics%2Ffeed+%28WSJ.com%3A+Real+Time+Economics+Blog%29
* Smallest Share of Distressed Sales Since 2007.Sales of lender-owned real estate (REO) in May represented the smallest share of home sales in nine years. CoreLogic said that the overall share of distressed properties sold during the month, including short sales as well as REO, fell to 9.9 percent. This was 1.7 percentage points lower than the April share and 2.8 percentage points lower than a year earlier. Short sales have remained fairly stable at less than 4 percent share – 3.5 percent in May – since mid-2014, but REO has fallen steadily – in May it accounted for a 6.4 percent share. At the peak of market distress in January 2009, distressed sales totaled 32.4 percent of all sales. There will always be some level of distress in the housing market, and by comparison, the pre-crisis share of distressed sales was traditionally about 2 percent. If the current year-over-year decrease in the distressed sales share continues, it would reach that “normal” 2-percent mark in mid-2018. Full Story… http://www.mortgagenewsdaily.com/08062015_corelogic_distressed_sales.asp
* Markets Continue to Move Toward Normal. The NAHB/First American Leading Markets Index (LMI) increased one point to .92 in the second quarter of 2015. The index measures proximity to a normal economic and housing market with three components: single-family housing starts, employment and home prices. A value of 1 means the market (or country) is back to the last levels of normality. About one-fifth of the 364 metro areas have a LMI value of 1 or better meaning those markets are back to or beyond the last normal. Of the three measures of normality, house prices has recovered the most with an average score of 1.29 and the national score is 1.35 meaning prices are 35% higher than the last normal. Ninety-five percent of the markets have a house price component value of 1 or above. The employment component is very close to normal with an average across all markets of .96. Single-family housing starts remains the farthest from normal with an average score across all markets of .49 and the national component index of .46, or less than half way back to normal. Only 26 markets are fully recovered in terms of single-family permits. Full Story… http://eyeonhousing.org/2015/08/markets-continue-to-move-toward-normal/
While the most significant headline This Week in Real Estate was the Pending Home Sales Index decrease in June the favorable news is the PHSI has experienced healthy year-over-year appreciation. Below are a few of the highlights from the final week in July that influence our business:
* Pending Sales – Another Bump in the Ride Up.The Pending Home Sales Index declined in June after reaching the highest level in over nine years in May. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by NAR, decreased 1.8% in June, but is up 8.2% from the same month a year ago, and has increased year-over-year, and has increased year-over-year for ten consecutive months. Year-over-year, the PHSI was up 12.0% in the Northeast, 10.4% in the West, 7.8% in the South and 5.0% in the Midwest. The earlier string of positive pending sales releases in 2015 was consistent with a strong report last week as existing sales reached a pre-recession level. The June PHSI is a small bump in the road, and follows last week’s similar decline in new home sales. However, the longer view suggests continued good news for the existing sales market and for builders in 2015. Full story… http://eyeonhousing.org/2015/07/pending-sales-another-bump-in-the-ride-up/
* Fannie Mae: Mortgage Serious Delinquency Rate Declined in June, Lowest Since August 2008. Fannie Mae reported Friday that the single-family serious delinquency rate declined in June to 1.66% from 1.70% in May. The serious delinquency rate is down from 2.05% in June 2014, and this is the lowest level since August 2008. The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%. Mortgage loans that are three monthly payments or more past due or in foreclosure are considered seriously delinquent. Full story… http://www.calculatedriskblog.com/2015/07/fannie-mae-mortgage-serious-delinquency.html
* Freddie Mac: Mortgage Serious Delinquency Rate Declined in June, Lowest Since November 2008. Freddie Mac reported that the single-family serious delinquency rate declined in June to 1.53%, down from 1.58% in May. Freddie’s rate is down from 2.07% in June 2014, and the rate in June was the lowest level since November 2008. Freddie’s serious delinquency rate peaked in February 2010 at 4.20%. Full Story… http://www.calculatedriskblog.com/2015/07/freddie-mac-mortgage-serious.html