While inventory levels hover around an all-time low, builder confidence remains strong according to the National Association of Home Builders/Wells Fargo Housing Market Index released This Week in Real Estate. Consequently, the pace of single-family starts to begin the new year has the three-month moving average near a post-recession high. Below are a few highlights from the second week of February that influence our business:
*Total Housing Starts Near Post Recession High.Total housing starts increased in January, led by strong gains for multifamily development. Starts jumped 9.7% to a 1.33 million seasonally adjusted annual rate, according to the joint data release from the Census Bureau and HUD. The pace of single-family starts expanded in January, rising 3.7% to an 877,000 seasonally adjusted annual rate. The three-month moving average for single-family starts remained near a post-recession high rate of construction (890,000). The gains for single-family starts match ongoing healthy levels of the NAHB/Wells Fargo Housing Market Index, now registering a score of 72. Single-family permits posted a slight decline of 1.7% in January, but that decline was off a strong December permitting rate. Multifamily starts were up almost 24% to a noticeably strong seasonally adjusted annual rate of 449,000 in January. Multifamily permits also posted a gain in January, with permitting rising 27%. Multifamily data tends to be volatile in the month-to-month data. In January, there were 499,000 single-family units under construction, a gain of almost 12% from this time in 2017.
* Nearly Two-Thirds of U.S. Housing Markets See Home Prices Hit All-Time High.As housing inventory sank to its all-time low during the fourth quarter, home prices increased, creating all-new highs in many U.S. markets, according to the latest quarterly report from the National Association of Realtors. The national median existing single-family home price in the fourth quarter came in at $247,800, up 5.3% from $235,400 in the fourth quarter of 2016. Single-family home prices increased in 92% of measured markets, or 162 out of 177 metropolitan statistical areas. In fact, 15% of metro areas saw double digit increases, and now 64% of markets reached a new all-time high in home prices. This is up by 18 metros from last quarter. “A majority of the country saw an upswing in buyer interest at the end of last year, which ultimately ended up putting even more strain on inventory levels and prices,” NAR Chief Economist Lawrence Yun said. “Remarkably, home prices have risen a cumulative 48% since 2011.”
*Builder Confidence Stays at Strong Level in February. Builder confidence in the market for newly-built single-family homes remained unchanged at a healthy level of 72 in February on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Demand conditions are positive, but supply-side construction hurdles need to be managed, as scarce labor and building material price increases remain top concerns. In particular, the HMI gauge of future sales expectations has reached a post-recession high, an indicator that consumer demand for housing should grow in the months ahead. With ongoing job creation, increasing owner-occupied household formation, and a tight supply of existing home inventory, the single-family housing sector should continue to strengthen at a gradual but consistent pace. Looking at the three-month moving averages for regional HMI scores, the Midwest rose two points to 72, the South increased one point to 74, the West remained unchanged at 81, and Northeast fell two points to 56.
This Week in Real Estate,Fannie Mae released the results of it’s January Home Purchase Sentiment Index, which recorded an all-time survey high. Below are a few highlights from the first week of February that influence our business:
* LMI Indicates Continued Improvement Across the Country.According to the NAHB/First American Leading Markets Index (LMI), 82%, 277 metropolitan statistical areas, recorded growth in their LMI Score over the fourth quarter of 2017 compared to a year ago. The index uses single-family housing permits, employment, and home prices to measure proximity to a normal economic and housing market. The index is calculated for 337 local markets, metropolitan statistical areas (MSAs), as well as the entire country. A value of 1.0 means the three components have achieved a level of recovery that combined averages 1.0. Of the 337 metro areas tracked by the LMI, 195 of them have an LMI Score that exceeds 1.0. House prices continue to be a key driver of the LMI results. Of the 337 markets tracked by the LMI, house prices in 333 areas have normalized or are above 1.0. The LMI Score for the country as a whole reached 1.04. However, at 1.58, only the house price component is above 1.0. Meanwhile, the employment component sits at 0.98 and single-family permits are currently at 0.56. One interpretation of these metrics is that the slower recovery in housing supply coupled with strong demand is contributing to house price appreciation.
* Americans Gain Confidence in Housing as Home Prices Rise. Americans continue to gain confidence in the housing market, not just despite, but even because of rising home prices, according to the latest Home Purchase Sentiment Index from Fannie Mae. Over the past year, home prices have continued to rise, threatening affordability, and housing inventory is falling dangerously low. However, despite these setbacks, Americans continue to hold a positive view of the housing economy. Fannie Mae’s HPSI rose 3.7 points in January to 89.5, reversing the decrease seen the month before and an all-time survey high. This rise is due to increases in five of the six HPSI components. “HPSI rebounded from last month’s dip to a new survey high in January, in large part due to the spike in consumers’ net expectations that home prices will increase over the next year,” said Doug Duncan, Fannie Mae senior vice president and chief economist.
* Housing Affordability Remains Flat in 2017.Data for all four quarters of 2017 show housing affordability remaining essentially flat throughout the year, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI). In all, 59.6 percent of new and existing homes sold between the beginning of October and end of December were affordable to families earning the U.S. median income of $68,000. This is just slightly up from the 58.3 percent of homes sold that were affordable to median-income earners in the third quarter, and effectively the same rate as in the fourth quarter of 2016, when the HOI stood at 59.9 percent. The national median home price fell to $255,000 in the fourth quarter of 2017 from $260,000 in the previous quarter. Meanwhile, average mortgage rates inched down four basis points in the fourth quarter to 4.06 from 4.1 in the third quarter. Youngstown-Warren-Boardman, Ohio-Pa. and Syracuse, NY tied as the nation’s most affordable major housing market. In both metros, 88.3 percent of all new and existing homes sold in the fourth quarter were affordable to families earning the area’s median income of $54,600 and $68,000, respectively. San Francisco, which had been the nation’s least affordable housing market for 19 straight quarters before being displaced by Los Angeles in the third quarter of 2017, once again assumed the mantle as the least affordable market. There, just 6.3 percent of the homes sold in the last quarter of 2017 were affordable to families earning the area’s median income of $113,100.
Despite inventory pressure, which in turn has driven continued price appreciation as a result of buyer demand, the National Association of Realtors announced This Week in Real Estate that 2017 existing home sales recorded the best year in 11 years. Below are a few highlights from the fourth week of January that influence our business:
* Cash Sales Tie Post-Recession High.NAHB analysis of the most recent Quarterly Sales by Price and Financing published by the Census Bureau reveals that cash sales accounted for 11,000 new home sales in the fourth quarter of 2017. Cash purchases made up 7.9% of purchases in the fourth quarter, a mark not seen since 2014. 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 December 2017, according to estimates from the National Association of Realtors. Conventional financing contracted sharply following the Great Recession, but has expanded as the recovery has continued. In 2006, conventional financing accounted for 90% of new home purchases, falling to 59% in 2010. Conventional loans accounted for 72% of new home sales in 2017, on average, the highest annual average since 2008.
* Best Year For Home Sales Since 2006, Despite Headwinds.Existing home sales in 2017 increased 1.1 percent for the best year in 11 years. According to the National Association of Realtors® (NAR), the 5.51 million sales of existing single-family homes, townhomes, condos, and cooperative apartments surpassed the 5.45 million sales in 2016 to have the highest number of transactions since 6.48 million were sold in 2006. Lawrence Yun, NAR chief economist, says the housing market performed remarkably wellfor the U.S. economy in 2017, but wasn’t as good as it might have been. The year brought substantial wealth gains for homeowners and historically low distressed property sales. “Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” he said. “At the same time, market conditions were far from perfect. New listings struggled to keep up with what was sold very quickly, andbuying became less affordable in a large swath of the country. These two factors ultimately muted what should have been a strongersales pace.” The medianexisting-home pricefor all housing types in December was $246,800, a 5.8 percent rate of appreciation for the year and was the 70th straight month of year-over-year gains. The inventory of available homes fell another 11.4 percent in December to 1.48 million and is now 10.3 percent lower than a year ago (1.65 million). The inventory has declined year-over-year for 31 consecutive months and is currently estimated at a 3.2-month supply, the lowest level since NAR began tracking in 1999. Existing-home sales in the West declined 0.8 percent below a year ago.
* Purchase Mortgage Applications Hit 8-Year High.Mortgage applications continue on the tear they started during the first week of 2018. The Mortgage Bankers Association’s (MBA’s) Market Composite Index, a measure of loan application volume, increased 4.5 percent on a seasonally adjusted basis during the week ended January 19. The gain came on the heels of 8.3 percent and 4.1 percent increases in the first two weeks of the year. Both the Refinancing and Purchase Indexes saw gains. The seasonally adjustedPurchase Index was up 6 percent from the week ended January 12, its fourth straight increase, and was the highest since April 2010.
Prior to investing in a home improvement project, would it be beneficial to know which remodeling projects net the highest return on investment (ROI)? Remodeling Magazine released This Week in Real Estate it’s Cost vs. Value Report for 2018. Below are a few highlights from the third week of January that influence our business:
* Cost vs. Value: The Home Improvement Projects With The Highest ROI in 2018.Remodeling Magazine’s newly released Cost vs. Value Report for 2018, which measures the average cost of 21 popular remodeling projects and their average resale value one year later, found that average return on investment (ROI) for home improvement projects dipped across the board, with “upscale” projects taking the biggest hit. Garage door replacement has the highest ROI at 98.3 percent (up from 85 percent year-over-year). Backyard patio jobs garner the lowest ROI, at 47.6 percent (down from 54.9 percent year-over-year). The reason for the sweeping decrease in ROI isn’t immediately obvious, but Remodeling magazine’s editor-in-chief (and manager of the report) Craig Webb notes that it’s likely related to the strength of the housing market currently. However, a silver lining from the report relates to when the data was compiled. Remodeling magazine put all the cost information together before the country was struck with several natural disasters, including massive forest fires and several hurricanes. Since then, building supplies and the price of skilled labor has increased, but that’s expected to change over the course of 2018. As a result, expect to see the ROI of most of these projects level out by the end of the year. Despite these events, some longtime trends continued through the new year. Remodeling is still far more cost-effective than replacement, but, according to real estate pros, replacing is still the way to go. This year, there’s a 20-point difference in ROI: 76.1 percent for replacement jobs, versus 56 percent for remodeling. Nationally, when it comes to renovation ROI, curb appeal still wins out.
* Builder Confidence Remains Strong as New Year Starts.Builder confidence in the market for newly-built single-family homes dropped two points to a level of 72 in January on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) after reaching an 18-year high in December 2017.Builders confidence remained strong given changes to the tax code will promote the small business sector and boost broader economic growth. Nonetheless, home builders continue to face building material price increases and shortages of labor and lots. In a recent NAHB survey, 84% of builders cited concerns regarding cost and availability of workers as a key challenge for 2018, matching the 84% who cited rising building material prices.The HMI gauge of future sales expectations has remained in the 70s, a sign that housing demand should continue to grow in 2018. As the overall economy strengthens, owner-occupied household formation increases, and the supply of existing home inventory tightens, we can expect the single-family housing market to make further gains this year. The three HMI components registered relatively minor losses in January. The index gauging current sales conditions dropped one point to 79, the component charting sales expectations in the next six months fell a single point to 78, and the index measuring buyer traffic fell four points to 54. Looking at the three-month moving averages for regional HMI scores, the West rose two points to 81, the South increased one point to 73, the Midwest inched up a single point to 70 and Northeast climbed five points to 59.
* U.S. Foreclosure Activity Drops to 12-Year Low in 2017. Attom Data Solutions released its Year-End 2017 U.S. Foreclosure Market Report on Thursday, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 676,535 U.S. properties in 2017, down 27 percent from 2016 and down 76 percent from a peak of nearly 2.9 million in 2010 to the lowest level since 2005. Those 676,535 properties with foreclosure filings in 2017 represented 0.51 percent of all U.S. housing units, down from 0.70 percent in 2016 and down from a peak of 2.23 percent in 2010 to the lowest level since 2005. “Thanks to a housing boom driven primarily by a scarcity of supply, which has helped to limit home purchases to the most highly qualified — and low-risk — borrowers, the U.S. housing market has the luxury of playing a version of foreclosure limbo in which it searches for how low foreclosures can go,” said Daren Blomquist, senior vice president at ATTOM Data Solutions.
No end of year slow down in 2017 for newly constructed homes, according to the Mortgage Bankers Association’s Builder Applications Survey results, that were released This Week in Real Estate. Below are a few highlights from the second week of January that influence our business:
* New Home Sales Defy Holiday Lull, Rising in December.Despite the usual holiday lull in overall mortgage applications, the demand for newly constructed homes increased in December. The Mortgage Bankers Association (MBA) said its Builder Applications Survey (BAS) found those applications were up 18 percent from November. The applications were 7.8 percent higherthan in December 2016. “Looking at all of 2017, applications increased by 7.1 percent compared to 2016. Based on December applications, we forecast that new home sales fell in December but remained nearly 16 percent higher than a year ago, and we are anticipating only modest year over year growth for new home sales in 2018. Despite robust demand, a lack of labor and land will continue to constrain homebuilders,” said Lynn Fisher, MBA Vice President of Research and Economics.
* Home Equity Hits Record High, and Here’s How Homeowners are Spending It.Homeowners are racking up record amounts of home equity, thanks to fast-rising values in today’s competitive housing market. No surprise, more people are now starting to tap that cash. What are they spending it on? Mostly making their homes even more valuable.Renovation spending is soaring, and 80 percent of borrowers taking out home equity lines of credit say they would consider using that money to renovate, according to a survey released in December by TD Bank.“We’re not only seeing more requests for proposals, but more committed projects from home owners,” said Steve Cunningham, a remodeler from Williamsburg, Virginia, in a report from the National Association of Home Builders. “In addition to regular updates and repairs, there’s been an uptick in more ambitious large remodel requests.”Remodeling spending topped $152 billion in 2017, and renovations for owner-occupied single-family homes will increase 4.9 percent in 2018 over 2017, according to the NAHB. That does not include remodeling done by investors looking to flip or rent properties, both of which are increasing as well.
* Property Tax Revenue Increases for 22nd Consecutive Quarter.NAHB analysis of the Census Bureau’s quarterly tax data shows that $556 billion in taxes were paid by property owners over the four quarters ending in Q3 2017. It has now been five and a half years since four-quarter property tax revenues last declined. Property taxes accounted for 40.1% of state and local tax receipts and the share has remained above 40.0% for the consecutive quarters for the first time since 2012-2013. In terms of the share of total receipts, property taxes are followed by individual income taxes (28.3%), sales taxes (27.7%), and corporate taxes (3.8%). After increasing as a share of state and local tax receipts for six consecutive quarters, property taxes have since held steady at 40.1%.
Per Bloomberg’s Consumer Comfort Index, released This Week in Real Estate, American consumers were more upbeat in 2017 than at any other time since 2001. Below are a few highlights from the first week of 2018 that influence our business:
* Experts: 2018 Set To Be Best Economic Year Since Housing Crisis.Although December’s job report numbers disappointed experts’ expectations, many explained that the end-of-year increase in construction jobs is just what the housing market needed. “Overall, the job market performed well in 2017 and is a key reason why the economy is poised for its best year since the crisis in 2018,” said Curt Long, National Association of Federally Insured Credit Unions chief economist. “One bright spot we saw in the report is the biggest monthly rise in residential construction employment in 2017, raising hopes for some supply relief for housing this year,” Fannie Mae Chief Economist Doug Duncan said. “Residential construction jobs rose to the highest since 2008 as builders work to add supply given the tight inventory and rising home prices,” LendingTree Chief Economist Tendayi Kapfidze said. “Construction employment increased by 210,000 in 2017, compared with a gain of 155,000 in 2016.”
* Consumer Comfort in U.S. Advanced in 2017 to a 16-Year High.American consumers last year were more upbeat on average than at any time since 2001, reflecting more favorable views of the economy, personal finances and the buying climate, according to the Bloomberg Consumer Comfort Index released Thursday. Sentiment in 2017 got a boost from the combination of a solid labor market that’s pushed unemployment to an almost 17-year low, limited inflation and record stock prices. Such optimism should help keep consumers spending after a bright holiday-shopping season. Retail sales during the year-end holidays may have been the strongest in more than a decade, according to calculations from research firm Customer Growth Partners. Optimism about the economy increased as the jobless rate declined and economic growth exceeded 3 percent annualized rates in the second and third quarters of 2017.
* Private Residential Spending Is On The Rise.NAHB analysis of Census Construction Spending data shows that total private residential construction spending rose 1% in November to a seasonally adjusted annual rate of $530.8 billion. It was the highest level since February 2007. Total private residential construction spending was 7.9% higher than a year ago. The monthly gains are largely attributed to the strong growth of spending on single-family. Single-family construction spending rose to a $270.1 billion annual pace in November, up by 1.9%. It was the highest monthly annual rate since November 2007. This is in line with the strong readings of single-family housing starts and solid builder confidence.
2017 closed with momentum, as evidenced by NAR’s release that the November Pending Home Sales Index (PHSI) remains at its highest level since June, and the Case-Shiller Home Price Index (HPI) set an all-time high in October. Below are a few highlights from the final week of 2017 that influence our business:
* Home Price Increases Outpace Inflation by 3X. The S&P CoreLogic Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, rose 6.2 percent on a year-over-year basis in October. Seattle continues to soar. The city had another annual increase that was nearly double that of the nation as a whole, at 12.7 percent. Las Vegasalso saw a gain in the double digits at 10.2 percent.San Diego had the third highest rate of appreciation at 8.1 percent. Nationally, home prices are up 6.2 percent in the 12 months to October, three times the rate of inflation. Sales of existing homes dropped 6.1 percent from March through September; they have since rebounded 8.4 percent in November. Inventories measured by months-supply of homes for sale dropped from the tight level of 4.2 months last summer to only 3.4 months in November. In what has become a monthly occurrence, the National Index set another new all-time high; 195.63.
* Pending Home Sales Inch Up 0.2% in November.Pending home sales were mostly unmoved in November, but did squeak out a minor gain both on a monthly and annualized basis, according to the National Association of Realtors. The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 0.2 percent to 109.5 in November from 109.3 in October. With last month’s modest increase, the index remains at its highest reading since June (110.0), and is now 0.8 percent above a year ago. Lawrence Yun, NAR chief economist, says contract signings mustered a small gain in November and were up annually for the first time since June. “The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear,” he said. The PHSI in the Northeast jumped 4.1 percent to 98.9 in November, and is now 1.1 percent above a year ago. In the Midwest the index rose 0.4 percent to 105.8 in November, and is now 0.8 percent higher than November 2016. In the South the index decreased 0.4 percent to 123.1 in November but are still 2.5 percent higher than last November. The index in the West declined 1.8 percent in November to 100.4, and is now 2.3 percent below a year ago.
* The Tax Cuts and Jobs Act – What it Means for Homeowners and Real Estate Professionals.The final bill includes some big successes. NAR efforts helped save the exclusion for capital gains on the sale of a home and preserved the like-kind exchange for real property. Many agents and brokers who earn income as independent contractors or from pass-through businesses will see a significant deduction on that business income.
The passing of the converged Tax Cuts and Jobs Act bill This Week in Real Estate, the first major tax reform since President Reagan, overshadowed the fact that existing-home sales in November reached its strongest pace in almost 11 years.Below are a few highlights from the third week of December that influence our business:
* Existing-Home Sales Soar 5.6% in November to Strongest Pace in Over a Decade. Existing-home sales surged for the third straight month in November and reached their strongest pace in almost 11 years, according to the National Association of Realtors. All major regions except for the West saw a significant hike in sales activity last month. Total existing-home sales jumped 5.6 percent to a seasonally adjusted annual rate of 5.81 million in November from an upwardly revised 5.50 million in October. After last month’s increase, sales are 3.8 percent higher than a year ago and are at their strongest pace since December 2006 (6.42 million). November existing-home sales in the Northeast leaped 6.7 percent to an annual rate of 800,000, (unchanged from a year ago). Existing-home sales in the South expanded 8.3 percent to an annual rate of 2.34 million in November, and are now 4.0 percent higher than a year ago. In the Midwest, existing-home sales jumped 8.4 percent to an annual rate of 1.42 million in November, and are now 6.8 percent above a year ago. Existing-home sales in the West declined 2.3 percent to an annual rate of 1.25 million in November, but are still 2.5 percent above a year ago.
* CoreLogic: Mortgage Credit Risk Increased From Q3 2016 to Q3 2017.CoreLogic released its Q3 2017 Housing Credit Index (HCI) Tuesday which measures trends in six home mortgage credit risk attributes. The HCI indicates the relative increase or decrease in credit risk for new home loan originations compared to prior periods. The six attributes include borrower credit score, debt-to-income ratio (DTI), loan-to-value ratio (LTV), investor-owned status, condo/co-op share and documentation level. In Q3 2017, the HCI increased to 111.1, up 18 points from 93.1 in Q3 2016. Even with this increase, credit risk in Q3 2017 is still within the benchmark range of the HCI. The benchmark range of 90 to 121 is measured as within one standard deviation of the average HCI value for 2001-2003, considered to be the normal baseline for credit risk. The increase in the credit risk, as measured by the HCI during the past year, was partly due to a shift in the purchase-loan mix to more investor loans and to a shift in the refinance-loan mix to borrowers with lower credit scores and higher DTI. This trend for refinance loans may reflect the rise in the FHA-to-conventional share of refinance activity. “The CoreLogic Housing Credit Index is up compared to a year ago, in part reflecting a shift in the mix of loans to the purchase market, which typically exhibit higher risk,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Further, the Index shows higher risk attributes for both purchase and refinance loans, although the risk levels still remain similar to the early 2000s. When looking at the two most recent quarters in which the mix of purchase and refinance loans were similar, the CoreLogic Housing Credit Index for each segment remained stable. Looking forward to 2018, with continuing economic and home price growth, we expect credit-risk metrics to rise modestly.”Full Story...http://www.corelogic.com/about-us/news/corelogic-analysis-shows-mortgage-credit-risk-increased-from-q3-2016-to-q3-2017.aspx
* 34 Things You Need to Know About The Incoming Tax Law. It’s official. Congress has ushered through the first major tax overhaul since Ronald Reagan was president. Among the many changes the most significant to homeowners is: (1) those who sell their house for a gain will still be able to exclude up to $500,000 (or $250,000 for single filers) from capital gains, so long as they’re selling their primary home and have lived there for two of the past five years and (2) mortgage interest deduction has been lowered; anyone buying a new home will only be able to deduct the first $750,000 of their mortgage debt, down from $1,000,000.
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 recordto 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/
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 upin the next 12 months increased 6 percentage points in November.Full Story...http://www.mortgagenewsdaily.com/12082017_national_housing_survey.asp