This Week in Real Estate: November 20, 2017

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

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

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

 

Have a productive week.

Jason


This Week in Real Estate: November 13, 2017

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

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

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

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

Have a productive week.

Jason


This Week in Real Estate: November 6, 2017

Good Morning!

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

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

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

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

Have a productive week.

Jason


This Week in Real Estate: October 30, 2017

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

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

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

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

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

Have a productive week!

Jason


This Week in Real Estate: October 23, 3017

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

Have a productive week!

Jason


This Week in Real Estate: October 16, 2017

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

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

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

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

Have a productive week!

Jason


This Week in Real Estate: October 9, 2017

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ATTOM Data Solutions released it’s Q3 Home Affordability Index This Week in Real Estate concluding that the index reached it’s lowest point since Q3 2008. Below are a few highlights from the first week of October that influence our business:

* Home Affordability Improves in 60% of U.S. Markets in Q3 2017 Compared to Previous Quarter. ATTOM Data Solutions released its Q3 2017 U.S. Home Affordability Index Thursday, which shows that home affordability in the third quarter improved compared to the previous quarter in 60 percent of 406 U.S. counties analyzed in the report — although affordability was still worse off than a year ago in 79 percent of those counties. The national home affordability index was 100 in the third quarter of 2017, the lowest national affordability index since Q3 2008, when the index was 86. An index of 100 means the share of average wages needed to buy a median-priced home nationwide in Q3 2017 is on par with historic averages (see full methodology below). “Falling interest rates in the third quarter provided enough of a cushion to counteract rising home prices in most U.S. markets and provide at least some temporary relief for the home affordability crunch,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “More sustainable relief for the affordability crunch, however, will need to be some combination of slowing home price appreciation and accelerating wage growth. Wage growth is outpacing home price growth in about half of all local markets so far this year, an indication that a more sustainable affordability pattern is taking shape in more local markets.”
Full Story… https://www.attomdata.com/news/affordability/q3-2017-u-s-home-affordability-index/

* Fastest Growing Cities in America. Frisco is the fastest-growing city in America. No, not THAT Frisco with the incessant fog and Golden Gate Bridge. The Dallas suburb scored No. 1 on WalletHub’s list of fastest-growing cities in America due to its rapid job and population growth. To compile the ranking, WalletHub analysts compared 515 cities of varying population sizes based on 15 key measures of both growth and decline, such as population, unemployment rate and regional GDP per capita over a period of seven years. WalletHub’s10 fastest-growing cities in America: (1) Frisco, TX, (2) Kent, WA, (3) Lehigh Acres, FL, (4) Meridian, ID, (5) Midland, TX, (6) McKinney, TX, (7) Fort Meyers, FL, (8) Bend, OR, (9) Austin, TX and (10) Pleasanton, CA.
Full Story… http://www.marketwatch.com/story/these-are-the-fastest-growing-cities-in-america-2017-10-03?dist=realestate

* Lot Size is at a New Record Low. The median lot size of a new single-family detached home sold in 2016 stands at 8,562 square feet, or just under one-fifth of an acre. This is a new record low and a small decline since 2015, when the median lot size fell under 8,600 square feet for the first time since Census Bureau’s Survey of Construction (SOC) started tracking the series for single-family detached homes. While nation’s lots are getting smaller on average, the regional differences in lot sizes persist. Looking at single-family detached speculatively built (or spec) homes started in 2016, the median lot size in New England is almost twice as large as the national median and exceeds a third of an acre. The East South Central Division is second on the list with the median lot occupying just slightly less than a third of an acre (0.3 acres). The Pacific division where densities are high and developed land is scarce has the smallest lots, with half of the lots being under 0.15 acres.
Full Story… http://eyeonhousing.org/2017/10/lot-size-is-at-a-new-record-low/

 

Have a productive week!

Jason


This Week in Real Estate: September 25, 2017

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While America’s largest living generation, Millennials, are delaying their home-buying plans by a median seven years as a result of their student loan debt, according to a report released by the National Association of Realtors, single-family starts and single-family permits are up 9% and nearly 11% respectively year-over-year and owners of mortgaged U.S. properties realized an aggregate gain of $766 billion in additional equity between second quarter 2016 and the same quarter this year. Below are a few highlights from the third week of September that influence our business:

* Home Equity Increases, Average Gains Vary Wildly. Rising home prices continue to fuel fast growth in household equity. CoreLogic said on Thursday that owners of mortgaged properties in the U.S. (roughly 63 percent of all homes) gained an aggregate of $766 billion in additional equity between the second quarter of 2016 and the same quarter this year. This is an increase of 10.6 percent in nationwide equity over that period. The average increase for each homeowner was just under $13,000, but the distribution is far from even across the states. A few states in the west, notably Washington, Hawaii, and California, with equity gains of $40,000, $33,000 and $30,000 respectively, have offset much poorer performances elsewhere. Homeowners in Alaska saw their equity decline by an average of $1,200 and Delaware homeowners also posted a tiny loss. On the other side of the ledger, the number of underwater homes declined by 10 percent from the first quarter of 2017, to 2.8 million properties, or 5.4 percent of mortgaged homes. A year earlier 7.1 percent of mortgaged homes had been underwater, a total of 3.6 million properties. This is an annual decrease of 22 percent. Negative equity had peaked at 26 percent of mortgaged properties in the fourth quarter of 2009. “Over the last 12 months, approximately 750,000 borrowers achieved positive equity,” said Dr. Frank Nothaft, chief economist for CoreLogic. “This means that mortgage risk continues to decline and, given the continued strength in home prices, CoreLogic expects home equity to rise steadily over the next year.” “Homeowner equity reached $8 trillion in the second quarter of 2017, which is more than double the level just five years ago,” said Frank Martell, president and CEO of CoreLogic. “The rapid rise in homeowner equity not only reduces mortgage risk, but also supports consumer spending and economic growth.”
Full Story… http://www.mortgagenewsdaily.com/09212017_corelogic_negative_equity.asp

* Single Family Starts Post Slight Gain in August. The pace of single-family starts posted a slight gain in August, albeit over downwardly revised estimates of the rate of July construction. Nonetheless, the three-month moving average for single-family starts is at a post-recession high of 849,000 as the gradual recovery in home building continues. Total starts declined almost 1% in August to a 1.180 million seasonally adjusted annual rate, according to the joint data release from the Census Bureau and HUD. The headline decline was due to multifamily production decreases. Single-family starts increased, rising slightly to an 851,000 seasonally adjusted rate in August. Single-family starts are up almost 9% year-to-date compared to 2016 as limited existing inventory and solid builder confidence make for positive market conditions. Single-family permits declined slightly in August, falling 1.5%. However, on a year-to-date basis, single-family permits are nearly 11% higher compared to this time in 2016, representing an additional 54,400 permits for a total of 564,000 thus far this year. These data are consistent with recent trends in the NAHB/Wells Fargo measure of single-family builder confidence and NAHB’s forecast of modest single-family construction growth in 2017. However, we can expect volatility ahead, as the counties affected by Hurricanes Harvey and Irma represent about 14% of national single-family production. With respect to housing’s economic impact, 56% of homes under construction in August were multifamily (610,000). As noted in the graph above, with recent production declines for apartments, the current count of multifamily units is effectively unchanged from a year ago. There were 472,000 single-family units under construction, a gain of 11% from this time in 2016.
Full Story… http://eyeonhousing.org/2017/09/single-family-starts-post-slight-gain/

* Student Debt Delaying Millennial Homeownership by 7 Years. College debt is having a compounding effect on how millennials perceive and plan for homeownership. Eighty-three percent of millennials in a recently released report by the National Association of REALTORS® (NAR) say they are delaying their home-buying plans by a median seven years as a result of their student loan debt. Twenty percent of the millennials surveyed in the study are homeowners; 80 percent are not. The typical millennial homeowner is burdened by $41,200 in student debt, and earning $38,800 annually. Homeownership is not the only casualty of student debt—millennials are also postponing career changes, children, marriage and retirement savings, the study shows. Forty-one percent of millennials have put off marriage; 61 percent have skipped a retirement savings payment; and 86 percent have stayed in an unsatisfying job, or taken on a second job or one outside of their field, as a result of student debt.
Full Story… https://www.nar.realtor/news-releases/2017/09/student-debt-delaying-millennial-homeownership-by-7-years


This Week in Real Estate: September 18, 2017

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As the summer selling season comes to a close, Fannie Mae released it’s Home Purchase Sentiment Index This Week in Real Estate. The findings show August was just below the all-time high set earlier this year, largely fueled by consumers attitude towards now being a good time to sell. Below are a few highlights from the second week of September that influence our business:

* Overall Housing Confidence Up. The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased 1.2 points in August to 88.0, just below the all-time high set in June. The rise can be attributed primarily to increases in two of the six HPSI components: the good time to sell component and the mortgage rates expectations component. The net share who reported that now is a good time to sell a home rose 8 percentage points in August and is now up 21 percentage points compared to the same period last year. Meanwhile, the net share who said it’s a good time to buy fell 5 percentage points in July and is down 16 percentage points year-over-year. Respondents continue to cite high home prices as the most important reason behind the bad time to buy and good time to sell indicators. “In the early stages of the economic expansion, home selling sentiment trailed home buying sentiment by a significant margin. The reverse is true today,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The net good time to sell share is now double the net good time to buy share, with record high percentages of consumers citing home prices as the primary reason for both perceptions. Such a sizable gap between selling and buying sentiment, if it persists, could weigh on the housing market through the rest of the year.”
Full Story… http://www.fanniemae.com/portal/research-insights/surveys/national-housing-survey.html

* Home Value Index Growth Slows in August. Appraisals continued to lag homeowner expectations in August, although the difference between appraiser and owner opinions narrowed, according to Quicken Loans’ National Home Price Perception Index (HPPI), out Tuesday. The HPPI showed that appraised values were 1.35% lower than home owners’ expectations in August. This is compared to July when there was a 1.55% difference. Regionally, value perceptions vary widely across the country, from home values being 3% higher than home owners estimated in the West, to 3% lower than expected in the Midwest and Northeast.
Full Story… http://www.builderonline.com/money/home-value-index-growth-slows-in-august_o

* Custom and Spec Home Market Shares in 2016. NAHB’s analysis of the most recent Census Bureau’s Survey of Construction (SOC) shows that custom home building registered declining market shares across most US regions in 2016. The sharpest drop in the custom home share of new single-family starts took place in the East South Central division, from 35% to 27%. In the Mountain division, the custom home share of new single-family starts was lowest in the nation but remained stable (14%). The Pacific division was the only US division registering an increase in the custom home share (from 14% to 18%). While nationally about one in five homes started in 2016 was a custom home, the shares varied widely across the US divisions. The New England and East North Central divisions stand out for registering the highest shares of starts supervised by contractors or owners – close to 39%, the Middle Atlantic division is next at close to 32%, followed by the East South Central division at more than a quarter (27%). At the opposite end of the spectrum are the Western divisions – Mountain and Pacific – and the South Atlantic. Home building here is dominated by spec starts. These divisions registered the highest three spec home shares – 83% in the Mountain and South Atlantic, and 79% in the Pacific.
Full Story… http://eyeonhousing.org/2017/09/custom-and-spec-home-market-shares-in-2016/

 

Have a productive week!

Jason


This Week in Real Estate: September 11, 2017

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The National Association of Home Builders (NAHB) released their 2016 Survey of Construction results This Week in Real Estate, concluding that all nine divisions of the country are off their recession-era lows, but no division has recovered. Below are a few highlights from the first week of September that influence our business:

* New Single-Family Housing Starts By Divisions in 2016 – Long Road Back to Normal. NAHB analysis of the Survey of Construction (SOC) shows that, nationally, there were 779,082 new single-family units started in 2016, 10% higher than 2015. According to NAHB analysis of the SOC data, national new single-family housing starts reached 58% of the pre-recession normal (the average of housing starts between 2000 and 2003) in 2016. Relative to the average annual number of housing starts between 2000 and 2003, the nine divisions ranged between 43% and 86% of that level in 2016. The West South Central Division, at 86%, is closest to recovering and the West North Central Division is furthest away, at 43%. All nine divisions are off their recession-era lows relative to the average activity between 2000 and 2003, but no division has recovered.

* Ellie Mae: Closing Times Jump Significantly From West to East Coast. The average time to close varies significantly from the East to West Coast, according to the Ellie Mae Millennial Tracker. The average time for Millennials, those born from the 1980s to the mid-1950s, to close a loan sits at 60 days in New York, up significantly from the 37 days in California. Across the country, the average time to close was 44 days in July. The average time to close conventional loans remained steady at 43 days as the average time to close an FHA loan increased one day to 44 days in July. The time it took Millennials to close a VA loan dropped from 46 days to 42 days, and the time it took to close an FHA loan saw the most change as it jumped from 45 days to 50 days in July. The average time Millennials took to close a purchase loan held steady at 42 days from June to July while the average time to close a refinance decreased two days to 46 days in that same period. The Millennial Tracker also showed FICO scores increased slightly to 724 in July, up from 723 in June but down one point from July last year. The average FICO score for purchases came in at 748 for conventional loans, 688 for FHA and 742 for a VA loan.


 
* More People Paying Mortgages on Time. Fewer borrowers are late making their house payments, according to a real-estate data firm, which credits strong employment numbers and tougher lending standards for the decline in delinquencies. Nationally, 3.2% of jumbo mortgages were 30 days or more past due in May, a 1.1 percentage-point decline from May 2016, California-based data firm CoreLogic found. The serious delinquency rate, defined as 90 days or more past due, was just 2.1%—the lowest rate in nearly a decade.

https://www.housingwire.com/articles/40988-charts-ten-x-we-are-definitely-not-in-a-housing-bubble?eid=322520585&bid=1837374

Have a productive week!

Jason