A much stronger than expected June job growth report coupled with continued strong price appreciation results in a record high for Fannie Mae’s National Housing Survey as released This Week in Real Estate. Below are a few highlights from the first week of July that influence our business:
*Housing Sentiment at Record High as Consumers’ Confidence in Home-Selling Environment Strengthens. It may be good news for those skinny housing inventories, homebuyers are allegedly confronting that increasing numbers of homeowners think now is a good time to sell. Fannie Mae says net positive responses to that question on its June National Housing Survey (NHS) increased by 7 points, reaching a new survey high of 39 percent. Those responses helped drive Fannie Mae’s Home Purchase Sentiment Index (HPSI) up by 2.1 percentage points to 88.3, tying last February’s all-time high for the index. The HPSI is up 5.1 percentage points compared with the same time last year. Full Story…http://www.fanniemae.com/portal/media/corporate-news/2017/june-home-purchase-sentiment-index-6577.html?p=Media&s=News+Releases&from=RSS
* CoreLogic: U.S. Home Price Report Shows Prices Up 6.6 Percent in May 2017. CoreLogic released its Home Price Index (HPI) and HPI Forecast for May 2017 on Wednesday which showed home prices are up strongly both year over year and month over month. Home prices nationally increased year over year by 6.6 percent from May 2016 to May 2017, and on a month-over-month basis, home prices increased by 1.2 percent in May 2017 compared with April 2017, according to the CoreLogic HPI. Looking ahead, the CoreLogic HPI Forecast indicates that home prices will increase by 5.3 percent on a year over year basis from May 2017 to May 2018, and on a month over month basis home prices are expected to increase by 0.9 percent from May 2017 to June 2017. Full Story… http://www.corelogic.com/about-us/news/corelogic-us-home-price-report-shows-prices-up-6.6-percent-in-may-2017.aspx
* Job Growth Surged in June. The U.S. labor market rebounded in June, new government data showed Friday, as employers surpassed the expectations of most economists by adding 222,000 jobs. The unemployment rate ticked up to 4.4 percent, from 4.3 percent in May, but it did so for a good reason – more people joined the labor force to look for work. The Labor Department also revised its estimates for job gains in April and May, raising the combined figure by 47,000 jobs. “We’ve been creating close to 200,000 jobs a month now for more than seven years. That’s just an incredible achievement. And that machine is still humming,” Mark Zandi, chief economist at Moody’s Analytics, said Friday. Eight years into the current economic expansion, the pace of hiring remains strong. Full Story… https://www.washingtonpost.com/news/wonk/wp/2017/07/06/what-to-watch-for-in-the-june-jobs-report/?utm_term=.6cb80322526e
With the summer selling season in full swing This Week in Real Estate, The Conference Board released its Consumer Confidence Index finding the present situation index rose to a nearly 16-year high. Below are a few highlights from the last week of June that influence our business:
* Consumer Confidence Gets Stronger in June. The Conference Board said its consumer confidence index rose to 118.9 last month from 117.6. The increase in June exceeded the 116 forecast of economists polled by MarketWatch. The “present” situation index, which tracks how consumers view the current health of the economy, rose to a nearly 16-year high of 146.3 from 140.6. Just three months earlier the full index hit the highest level since 2001. “Overall, consumers anticipate the economy will continue expanding in the months ahead, but they do not foresee the pace of growth accelerating,” said Lynn Franco, director of economic indicators at the board.
Full Story… http://www.marketwatch.com/story/consumer-confidence-stays-strong-in-june-2017-06-27
* Fannie Mae: As Mortgage Demand Cools and Competition Heats Up, More Lenders Are Planning to Ease Credit Standards.More mortgage lenders say they have eased credit standards recently and expect further easing in the coming months, according to Fannie Mae’s second quarter 2017 Mortgage Lender Sentiment Survey. On net, the share of lenders reporting they have eased mortgage credit standards over the prior three months has ticked up gradually since the fourth quarter of 2016. Additionally, when anticipating the next three months, the net share of lenders saying they plan to ease credit standards for GSE eligible, non-GSE eligible, and government loans reached or surpassed survey highs this quarter. “Expectations to ease credit standards climbed to survey high points in the second quarter as more lenders reported slowing mortgage demand and increasing concerns about competition from other lenders,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Lenders cited additional contributing factors such as diminishing compliance concerns and more support from the GSEs.”
Full Story… http://www.fanniemae.com/portal/research-insights/surveys/mortgage-lender-sentiment-survey.html
* Black Knight: Home Price Index Hits All-Time High. Home prices hit their all-time high in April, according to Black Knight Financial Services’ latest Home Price Index report. Home prices increased a total of 3.6% in April since the start of 2017 to the HPI’s all-time high of $275,000. This is an increase of 1.2% from the previous month and 6% from last year. One city stood out above the rest as it led its state to the highest monthly appreciation for the third consecutive month. Seattle home prices increased a full 8.4% since the start of the year. All the largest 20 states and the 40 largest metros saw an increase in home prices in April, and the top 10 best-performing metros all increased by 2% or more. Of the top six best performing metros, five are located in Washington. In fact, nine of the top 10 metros are in the Western U.S. The one exception is Detroit, which came in as the 10th best performing metro with its increase of 2% from the month before.
Full Story… https://www.housingwire.com/articles/40525-black-knight-home-price-index-hits-all-time-high?eid=322520585&bid=1796925
The National Association of Realtors released This Week in Real Estate that the median sales price reached a new high in May while the median days on the market decreased to a new low. Below are a few highlights from the third week of June that influence our business:
* As Existing Home Sales Rise, Median Home Price Hits New High. Existing-home sales rebounded in May and low inventory levels helped propel the median sales price to a new high while pushing down the median days a home is on the market to a new low, according to the National Association of Realtors. All major regions except for the Midwest saw an increase in sales last month. Total existing-home sales climbed 1.1 percent to a seasonally adjusted annual rate of 5.62 million in May from a downwardly revised 5.56 million in April. Last month’s sales pace is 2.7 percent above a year ago and is the third highest over the past year. The median existing-home price for all housing types in May was $252,800. This surpasses last June ($247,600) as the new peak median sales price, and is up 5.8 percent from May 2016 ($238,900) and marks the 63rd straight month of year-over-year gains. Total housing inventory at the end of May rose 2.1 percent to 1.96 million existing homes available for sale, but is still 8.4 percent lower than a year ago (2.14 million) and has fallen year-over-year for 24 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.7 months a year ago. Properties typically stayed on the market for 27 days in May, which is down from 29 days in April and 32 days a year ago; this is the shortest timeframe since NAR began tracking in May 2011. Inventory data from realtor.com reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in May were Seattle-Tacoma-Bellevue, WA (20 days); San Francisco-Oakland-Hayward, CA (24 days); San Jose-Sunnyvale-Santa Clara, CA (25 days) and Salt Lake City, UT (26 days).
* Housing Remains a Bright Spot for the Economy. Freddie Mac released its monthly outlook for June on Friday, which shows that despite some recent bumps, the U.S. housing market remains on track to exceed last year’s best-in-a-decade levels for housing starts and home sales. May marked the 80th consecutive month of job gains. In the first quarter of 2017, the homeownership rate was 63.6 percent – six percentage points lower than its peak in 2004 when it reached its all time-high of 69.2 percent. Strong demand and a short supply of housing in many markets continues to push house prices higher. Expect house price appreciation to be over 5 percent in 2017.
* Mortgage Default Rate Falls to Near Record Low in May. Borrowers are going into default on their first mortgages less often than at nearly point in the last 13 years, a new report from the S&P Dow Jones Indices and Experian showed. The newest S&P/Experian Consumer Credit Default Indices, which is a comprehensive measure of changes in consumer credit defaults, showed that the default rate for first mortgages fell to 0.64% in May. That’s down five basis points from April’s level of 0.69%. The default rate in May was also just one basis point above May 2016’s level of 0.63%, which was the lowest that figure had been since July 2004. That means that May 2017’s default rate of 0.64% is the second lowest for any month in nearly 13 years. “The default rate on first mortgage remains at 1%, lower than the pre-crisis period,” said David Blitzer, the managing director and chairman of the Index Committee at S&P Dow Jones Indices.
Happy Father’s Day to all you Berkshire Hathaway HomeServices dads, as well as to the dads of our entire team, including my hero, mentor, friend, and dad Bert Waugh.
As home equity grows and builder confidence remains strong, HUD released This Week in Real Estate a drop in both construction permits and starts for the second straight month, which could put additional downward pressure on future inventory. Nonetheless, single-family starts are up 7% compared to the same time period the year before. Below are a few highlights from the second week of June that influence our business:
* Home Equity Grows As The Composition of (Fewer) Refinancing Shifts. According to the Federal Reserve Board’s first quarter of 2017 release of its Financial Accounts of the United States report, household holdings of real estate, measured on a not seasonally adjusted basis, totaled $23.526 trillion in the first quarter of 2017, $1.597 trillion higher than its level in the first quarter of 2016. Home mortgage debt outstanding, $9.813 trillion in the first quarter of 2017, rose by $252 billion over the same four-quarter period. As the change in the total value of household-held real estate exceeded growth in mortgage debt outstanding, total home equity held by households grew. Over the year, total home equity held by households rose by $1.346 trillion, 10.9 percent, to $13.714 trillion. Households’ home equity is now 58.3 percent of household real estate.
Full Story… http://eyeonhousing.org/2017/06/home-equity-grows-as-the-composition-of-fewer-refinancings-shifts/
* Housing Starts Decline in May. Total housing starts declined in May after a few, strong early months to begin 2017. Total starts were down 5.5%, falling to a 1.092 million seasonally adjusted annual rate, according to the joint data release from the Census Bureau and HUD. Declines were recorded for both single-family and multifamily development. Single-family starts fell back, declining to a 794,000 annual rate. The February annualized rate, 877,000, was the fastest monthly pace since the Great Recession. Nonetheless, single family starts are up 7% year-to-date compared to 2016 as limited existing inventory and solid builder confidence make for positive demand conditions. Single-family permits were down 4.9% in May. There has also been a noticeable increase in the number of single-family homes permitted but not started, consistently with survey data indicating supply-side bottlenecks. For example, in May there were 78,000 single-family homes permitted but not started construction. This is almost 15% higher than a year ago. With respect to housing’s economic impact, 57% of homes under construction in May were multifamily (612,000), that is 6% higher than a year ago. There were 455,000 single-family units under construction, a gain of 6% from this time in 2016. This is slightly lower than the April total (457,000), which was a post-recession high. Regionally, single-family starts declined in the South (-8.9%) and the West (-4.9%), the two largest market areas. Single-family starts were up in the Northeast (12.5%) and the Midwest (9.5%).
Full Story… http://eyeonhousing.org/2017/06/housing-starts-decline-in-may/
* Builder Confidence Remains Solid in June. Builder confidence in the market for newly-built single-family homes weakened slightly in June, down two points to a level of 67 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). “Builder confidence levels have remained consistently sound this year, reflecting the ongoing gradual recovery of the housing market,” said NAHB Chairman Granger MacDonald. “As the housing market strengthens and more buyers enter the market, builders continue to express their frustration over an ongoing shortage of skilled labor and buildable lots that is impeding stronger growth in the single-family sector,” said NAHB Chief Economist Robert Dietz. All three HMI components posted losses in June but remain at healthy levels. The components gauging current sales conditions fell two points to 73 while the index charting sales expectations in the next six months dropped two points to 76. Looking at the three-month moving averages for regional HMI scores, the Midwest and South each edged one point lower to 67 and 70, respectively. The Northeast and West both dropped two points to 46 and 76, respectively.
Full Story… http://www.nahb.org/en/news-and-publications/press-releases/2017/06/builder-confidence-remains-solid-in-june.aspx
Homeowners realized the largest increase in equity growth in the first quarter since mid-2014, as reported by CoreLogic This Week in Real Estate, with Washington state homeowners experiencing the largest year-over-year increase. Below are a few highlights from the first week of June that influence our business:
* Homeowner Equity Soars in First Quarter. Homeowner equity increased significantly in the first quarter of 2017, according to the Q1 2017 home equity analysis from CoreLogic. Homeowners with a mortgage, about 63% of all homeowners, saw their equity increase by 11.2% a total of $766.4 billion since the first quarter last year. The average homeowner gained about $13,400 in equity over the last year. The total number of mortgaged residential properties with negative equity decreased 3% from the fourth quarter to 3.1 million homes, or 6.1% of all mortgaged properties. This is a drop of 24% from 4.1 million homes in the first quarter of last year. “Homeowner equity increased by over $750 billion during the last year, the largest increase since mid-2014,” CoreLogic President and CEO Frank Martell said. “The rising cushion of home equity is one of the main drivers of improved mortgage performance. It also supports consumer balance sheets, spending and the broader economy.” Texas had the highest percentage of homes with positive equity at 98.4 percent, followed by Utah (98.2%), Washington (98.2%), Hawaii (98.1%) and Colorado (98%). Washington had the highest year-over-year homeowner equity increase at $37,900.
Full Story… http://www.corelogic.com/about-us/news/corelogic-reports-nearly-9-million-borrowers-have-regained-equity-since-the-height-of-the-crisis-in-2011.aspx https://www.housingwire.com/ext/resources/images/editorial/Kelsey-Ramirez/Folder-1/Screen-Shot-2017-06-08-at-101302-AM.pn
* U.S. Job Creation Index Returns to Record High. Gallup’s Job Creation Index was +37 in May, tied with the record high found in March. This marks 15 straight months of the index reaching +30 or higher. The index has generally been moving upward since bottoming out at -5 in April 2009 during the Great Recession. It has been in positive territory since February 2010. The Job Creation Index is a nearly real-time indicator of the nation’s employment picture across all industries and business sectors. This is the first time index scores in all regions have been above +30 since January. The West has rebounded the most from the Great Recession in terms of the Job Creation Index, rising to +37 after falling to -11 three times in 2009. Gallup’s Job Creation Index is at an all-time high, reflecting an improving job market. These findings generally match the U.S. government’s data on the job market, as evidenced by the Bureau of Labor Statistics’ unemployment rate reaching 4.3% in May and the underemployment rate falling from 8.6% in April to 8.4% in May.
Full Story… http://www.gallup.com/poll/211820/job-creation-index-returns-record-high.aspx?utm_source=tagrss&utm_medium=rss&utm_campaign=syndication
* “Good Time to Sell” Hits Highest Levels in Fannie Mae Survey. The Fannie Mae Home Purchase Sentiment Index (HPSI) decreased fractionally in May, however the change in each of its internal components was decidedly more pronounced. The HPSI, based on six of the questions from Fannie Mae’s monthly National Housing Survey, was 86.2, down 0.5 percent compared to April. Three of its components moved higher and three lost ground. The index is 0.9 percent higher than its May 2016 version. The most striking changes come from answers to the questions regarding whether respondents thought it was a good time to buy and/or a good time to sell. The net share of Americans who said that now is a good time to buy a home reached a record low (27 percent) after falling 8 percentage points, while the net share who stated that it is a good time to sell a home reached a record high of 32 percent, a gain of 6 percentage points. Fannie Mae said it was only the second time in the survey’s history that the net share of those saying it’s a good time to sell surpassed the net share of those saying it’s a good time to buy. The “sell” component is 19 points higher than at the same time in 2016.
Full Story… http://www.mortgagenewsdaily.com/06082017_national_housing_survey.asp
The S&P CoreLogic Case-Shiller National Index reported This Week in Real Estate that housing prices in March rose at the strongest pace in nearly three years, and the top 2 cities in the country were Seattle and Portland, respectively. Below are a few highlights from the last week of May that influence our business:
* Single Family Sector is Rare Winner in Construction Spending Report.The total amount of construction put in place nationally fell in April, but continues at a pace higher than at the same point in 2016. The U.S. Census Bureau puts the seasonally adjusted annual rate of spending on all types of construction during the month at $1.22 trillion, a decrease of 1.4 percent from the March total, but up 6.7 percent from April of last year. Total spending on residential construction was down 0.9 percent from March, but was 15.6 percent higher than a year earlier. Residential spending in the private sector was at a seasonally adjusted annual rate of $516.65 billion in April, an 0.7 percent dip from $520.36 billion in March, but 16.0 percent higher than the April 2016 pace. Spending on new single family construction managed to be one of the few gainers for the month, eking out an 0.8 percent month-over-month gain to a rate of $262.14 billion. This made the spending rate 7.7 percent higher than a year earlier.
Full Story… http://www.mortgagenewsdaily.com/06012017_construction_spending.asp
* May Employment Numbers Show “Rip-Roaring” Job Growth.ADP and Moody’s Analytics released the National Employment Report showing a huge surge in employment numbers for May. Private-sector employment increased by a seasonally adjusted 253,000 from April to May. “May proved to be a very strong month for job growth,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Professional and business services had the strongest monthly increase since 2014.” “The current pace of job growth is nearly three times the rate necessary to absorb growth in the labor force. Increasingly, businesses’ No.1 challenge will be a shortage of labor,” Moody’s Analytics Chief Economist Mark Zandi said.
Full Story… https://www.housingwire.com/articles/40306-may-employment-numbers-show-rip-roaring-job-growth
* Case-Shiller: No Telling When Prices, Rates Will Force Housing Slowdown. Home prices across the nine U.S. census divisions hit a 33-month high in March. The S&P CoreLogic Case-Shiller U.S. National Home Price Index rose 5.8 percent from its level in March 2016, a 0.1 percentage point more than the annual increase it posted in February. Seattle, Portland and Dallas reported the highest year-over-year gains among the 20-City Composite. “Home prices continue rising with the S&P CoreLogic Case-Shiller National Index up 5.8 percent in the year ended March, the fastest pace in almost three years,” David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices said. As of March, the National Index is 1.3 percent higher than the pre-crash peak it reached in July 2006, having bounced back by 39.5 percent from its low point in February 2012.
Full Story… http://www.mortgagenewsdaily.com/05302017_case_shiller_indices.asp
As you celebrate the remainder of this holiday weekend I encourage you to pause at some point over the next two days to honor and remember all the men and women that made the ultimate sacrifice in service to our country.
Favorable news This Week in Real Estate in two of the most influential lead indicators of a real estate market: employment and interest rates. Interest rates hit the lowest level of 2017 this week and the jobless rate is at a 10-year low. Below are a few highlights from the fourth week of May that influence our business:
* Existing-Home Sales Slip 2.3 Percent in April; Days on Market Falls to Under a Month. Stubbornly low supply levels held down existing-home sales in April and also pushed the median number of days a home was on the market to a new low of 29 days, according to the National Association of Realtors. Total existing-home sales dipped 2.3 percent to a seasonally adjusted annual rate of 5.57 million in April from a downwardly revised 5.70 million in March. Despite last month’s decline, sales are still 1.6 percent above a year ago and at the fourth highest pace over the past year. “Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2 percent, and new and existing inventory is not keeping up with the fast pace homes are coming off the market,” said Lawrence Yun, NAR chief economist. Total housing inventory at the end of April climbed 7.2 percent to 1.93 million existing homes available for sale, but is still 9.0 percent lower than a year ago (2.12 million) and has fallen year-over-year for 23 consecutive months. Properties typically stayed on the market for 29 days in April, which is down from 34 days in March and 39 days a year ago and surpasses last May (32 days) as the shortest timeframe since NAR began tracking in May 2011. Inventory data from realtor.com reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in April were San Jose, CA (23 days), San Francisco, CA (25 days), Denver (27 days) and Seattle-Tacoma-Bellevue, WA (28 days). Matching the highest percentage since last September, first-time buyers were 34 percent of sales in April.
Full Story… https://www.nar.realtor/news-releases/2017/05/existing-home-sales-slip-23-percent-in-april-days-on-market-falls-to-under-a-month
* Mortgage Rates Drop to Lowest of 2017. Freddie Mac released the results of its Primary Mortgage Market Survey on Thursday showing average mortgage rates hitting their lowest mark of the year. “As we predicted, the 30-year mortgage rate fell 7 basis points this week in a delayed reaction to last week’s sharp drop in Treasury yields,” says Sean Becketti, Freddie Mac’s chief economist. The 30-year fixed-rate mortgage averaged 3.95 percent, with an average 0.5 point, falling from last week’s 4.02 percent average. Last year at this time, 30-year rates averaged 3.64 percent. The 15-year fixed-rate mortgage averaged 3.19 percent, with an average 0.5 point, falling from last week’s 3.27 percent average. A year ago, 15-year rates averaged 2.89 percent. A 5-year hybrid adjustable-rate mortgage averaged 3.07 percent, with an average 0.4 point, dropping from last week’s 3.13 percent average. A year ago, 5-year ARMs averaged 2.87 percent.
Full Story… http://freddiemac.mwnewsroom.com/press-releases/mortgage-rates-drop-to-lowest-of-2017-otcqb-fmcc-1310392
* Jobless Claims Rose Slightly, but Four-Week Average is at a 44-Year Low. The number of Americans filing for unemployment benefits rose less than expected last week and the four-week moving average of claims fell to a 44-year low, suggesting further tightening in the labor market. It was the 116th straight week that claims were below 300,000, a threshold associated with a healthy labor market. That is the longest stretch since 1970, when the labor market was smaller. The labor market is near full employment, with the jobless rate at a 10-year low of 4.4 percent. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 5,750 to 235,250 last week, the lowest level since April 1973. The four-week moving average of continuing claims dropped 16,000 to 1.93 million, the lowest level since January 1974.
Full Story… http://www.cnbc.com/2017/05/25/initial-jobless-claims-hit-234k-vs-estimate-of-238k.html
As we move closer towards the summer selling season, we have favorable news This Week in Real Estate relative to home builder confidence and average closing time of home loans. Below are a few highlights from the third week of May that influence our business:
* Homebuilder Confidence Soars in May. The housing market is showing signs of strength as homebuilder confidence grew in May to the second-highest point since the recession, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Home builders increased their confidence in the market for newly built single-family homes by two points in May to 70. “This report shows that builders’ optimism in the housing market is solidifying, even as they deal with higher building material costs and shortages of lots and labor,” said NAHB Chairman Granger MacDonald. The index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as good, fair or poor. “The HMI measure of future sales conditions reached its highest level since June 2005, a sign of growing consumer confidence in the new home market,” said NAHB Chief Economist Robert Dietz. “Especially as existing home inventory remains tight, we can expect increased demand for new construction moving forward.”
Full Story… http://www.housingwire.com/articles/40120-homebuilder-confidence-soars-in-may?eid=322520585&bid=1755028
* New Single-Family Home Size Continues to Trend Down. After increasing and leveling off in recent years, new single-family home size continued along a general trend of decreasing size during the start of 2017. This change marks a reversal of the trend that had been in place as builders focused on the higher end of the market during the recovery. As the entry-level market expands, including growth for townhouses, typical new home size is expected to decline. According to first quarter 2017 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area was slightly lower at 2,389 square feet. This is down from 2,440 square feet last quarter and 2,465 square feet last year. Similarly, the average square footage also decreased slightly from 2,652 square feet in the fourth quarter and 2,658 square feet last year to 2,628 square feet. The post-recession increase in single-family home size is consistent with the historical pattern coming out of recessions. Typical new home size falls prior to and during a recession as home buyers tighten budgets and then sizes rise as high-end homebuyers, who face fewer credit constraints, return to the housing market in relatively greater proportions. This pattern was exacerbated during the current business cycle due to market weakness among first-time homebuyers. But the recent declines in size indicate that this part of the cycle has ended and size will trend lower as builders add more entry-level homes into inventory.
Full Story… http://eyeonhousing.org/2017/05/new-single-family-size-continues-to-trend-down/
* Closing Time on a Mortgage Keeps Getting Faster. The time to close a loan fell once again, marking the third consecutive month of declines. Time to close all loans fell to 42 days in April, down from 43 in March and a substantial drop from the beginning of 2017’s 51 days in January. The time it takes to close a refinance dropped to 41 days in April, down from 43 days in March. The time to close a purchase also decreased from 43 days the previous month to 42 days in April. And while the time it takes to close a refinance came in lower than purchase loans, it is purchase originations that continue to rule the market. In April, refis represented 35% of the market, while purchases made up the other 65%.
Full Story… https://cdn.elliemae.com/origination-insight-reports/Ellie_Mae_OIR_APRIL2017.pdf
Happy Mother’s Day to all you moms. Thank you for the positive impact you make every single day.
Continued acceleration of home price growth leads to foreclosure activity dropping to its lowest level in nearly 12 years as reported by ATTOM Data Solutions This Week in Real Estate. Below are a few highlights from the second week of May that influence our business:
* U.S. Foreclosure Activity Drops to Lowest Level Since November 2005. ATTOM Data Solutions released its April 2017 U.S. Foreclosure Market data on Thursday, which shows foreclosure filings – default notices, scheduled auctions and bank repossessions – were reported on 77,049 U.S. properties in April, down 7 percent from the previous month and down 23 percent from a year ago to the lowest level since November 2005. A total of 34,085 U.S. properties started the foreclosure process in April, down 6 percent from the previous month and down 22 percent from a year ago and continuing well below the pre-recession average of more than 77,000 foreclosure starts per month between April 2005 and November 2007. Lenders completed foreclosure (REO) on 25,990 U.S. properties in April, down 9 percent from the previous month and down 22 percent from a year ago to the lowest level since February 2015 – a 26-month low and running just above the pre-recession average of 25,796 per month between April 2005 and November 2007.
Full Story… http://www.realtytrac.com/news/foreclosure-trends/april-2017-foreclosure-market-report/
* Homeowners Continue to Overestimate Their Home Value. Homeowners and appraisers continue to hold conflicting views on the value of their home, a gap that widened once again in April, according to the Home Price Perception Index from Quicken Loans. Appraised home values came in 1.9% lower than what homeowners expected as many Americans continued to overvalue their home. This marks the fifth consecutive month where the gap between appraiser and homeowner opinions widened. Although the gap continued to widen, appraised value increased in April. And while homeowners are overestimating the value of their homes, home price growth is accelerating. The HVI increased 5.08% annually in April, up from March’s annual increase of 3.3%.
Full Story… http://www.housingwire.com/articles/40081-homeowners-continue-to-overestimate-their-home-value
* 3 Reasons The Housing Market is Not in a Bubble. With housing prices appreciating at levels that far exceed historical norms, some are fearful that the market is heading for another bubble. To alleviate that fear, we just need to look back at the reasons that caused the bubble ten years ago. Last decade, demand for housing was artificially propped up because mortgage lending standards were way too lenient. People that were not qualified to purchase were able to attain a mortgage anyway. Prices began to skyrocket. This increase in demand caused homebuilders in many markets to overbuild. Eventually, the excess in new construction and the flooding of the market with distressed properties, caused by the lack of appropriate lending standards, led to the housing crash. If we look at lending standards based on the Mortgage Credit Availability Index we can see that though standards have become more reasonable over the last few years, they are nowhere near where they were in the early 2000s. If we look at new construction, we can see that builders are not “over building.” Average annual housing starts in the first quarter of this year were not just below numbers recorded in 2002 – 2006, they are below starts going all the way back to 1980. If we look at home prices, most homes haven’t even returned to prices seen a decade ago. Bottom line is mortgage lending standards are appropriate, new construction is below what is necessary and home prices haven’t recovered. It appears fears of a housing bubble are over-exaggerated.
Full Story… http://www.keepingcurrentmatters.com/2017/05/11/3-reasons-the-housing-market-is-not-in-a-bubble/
While a million plus more homes became “equity rich” compared to the same time period last year, as reported by ATTOM Data Solutions This Week in Real Estate, the unemployment rate for April dropped to the lowest level in a decade. Below are a few highlights from the first week of May that influence our business:
* Equity Rich Properties Increase 1.4 Million. ATTOM Data Solutions released is Q1 2017 U.S. Home Equity & Underwater Report on Thursday finding that at the end of Q1 2017, there were more than 13.7 million (13,718,473) equity rich U.S. properties – where the combined loan amount secured by the property is 50 percent or less than the estimated market value of the property – representing 24.3 percent of all U.S. properties with a mortgage. That is up nearly 1.4 million from a year ago, when there was 12.4 million equity rich properties representing 22.0 percent of all properties with a mortgage as of the end of Q1 2016. States with the highest share of equity rich properties were Hawaii (38.4 percent), California (35.8 percent), New York (34.6 percent), Vermont (32.8 percent) and Oregon (31.3 percent). The top 10 Metro areas for highest share of equity rich properties were San Jose, CA (51.3 percent), San Francisco, CA (46.6 percent), Honolulu, HI (39.9 percent), Los Angeles, CA (39.1 percent), Pittsburgh, PA (34.2 percent), San Diego, CA (33.6 percent), Portland, OR (33.6 percent), Austin, TX (32.1 percent), Seattle, WA (32.1 percent) and New York, NY (32.0 percent).
Full Story… http://www.realtytrac.com/news/home-prices-and-sales/q1-2017-home-equity-underwater-report/
* Nationwide Recovery Continues. The NAHB/First American Leadings Markets Index (LMI), released Thursday, rose .01 point over the quarter to 1.0. Over the past year, the LMI grew by .05 point. 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 both the entire country and for 337 local markets, metropolitan statistical areas (MSAs). A value of 1.0 means the three components have individually, whether for the country as a whole or an individual metro area, achieved a level of recovery that combined averages 1.0. The current LMI Score combined with the upward trajectory of the Index was last observed in 2003, a period of normal. Over the housing boom years of 2004 – 2007, the LMI rose, peaking at 1.22 in 2006. The ensuing decline in the Index reflected the distress observed in the housing market and in the economy more generally. After falling to a low 0.78 in 2012, the LMI has been steadily climbing, in line with the overall economic recovery. Relative to 2003, a period when the Score of each of the LMI’s subcomponents reached 1.0, house prices are currently at 1.50, their peak level in 2007, while employment is currently at 0.98, .02 point below its peak level of 1.0. At 0.53 single-family permits are furthest away from normality. An alternative, but more speculative, interpretation of the trends in the components of the overall LMI is that the permits trend indicates that too few homes are in the pipeline to be built, contributing to the low housing inventory, while the prospects for housing demand, as suggested by the employment component, is closer to normalizing. Economic theory posits that, all else equal, in the presence of low housing inventory, healthy housing demand will be reflected in higher house prices.
Full Story… http://eyeonhousing.org/2017/05/nationwide-recovery-continues/
* Unemployment Rate Drops to Lowest Level in a Decade in April as Economy Adds 211,000 Jobs.The U.S. job market rebounded strongly last month and the unemployment rate fell to the lowest level seen in a decade, government data released Friday morning showed. Employers added 211,000 jobs in April as the unemployment rate ticked down to 4.4 percent, the lowest level since May 2007. The report offered a snapshot of an increasingly solid economy. The U.S. labor market is still expanding at a steady clip even after 79 straight months of job gains, helping to heal much of the damage still lingering from the recession. “The re-acceleration in jobs should assuage fears that economic growth is slowing in any meaningful way,” said James Marple, senior economist at TD Economics. Job gains were seen in mining and manufacturing, but the bulk of job growth in April came from the much larger sectors of leisure and hospitality, education and health, and business services. At 4.4 percent, the headline unemployment rate is now below the longer-term level targeted by the Federal Reserve. Broader measures of unemployment and underemployment also continue to improve. The U-6 rate, a measure that includes people who have given up looking for work, as well as those who are employed part time but would like to be full time, fell to 8.6 percent in the month, the lowest level seen since 2007.
Full Story… https://www.washingtonpost.com/news/wonk/wp/2017/05/05/the-u-s-job-market-is-expected-to-rebound-in-april-if-it-doesnt-that-could-be-cause-for-concern/?utm_term=.779d79f8b680