This Week in Real Estate: Dec. 28, 2015


Hoping you all had a great holiday week. Industry news from employment to new construction to distressed inventory continues to be very favorable This Week in Real Estate as we close out the year. Below are a few of the highlights from the fourth week in December that influence our business:

* New Home Sales Nudge Forward. The number of new homes sold in November increased by 4.3% from a downwardly revised October level to 490,000 on a seasonally adjusted annual basis. On a year to date level, sales are up 14.5% from the eleven month total in 2014. Inventories of new homes also increased to 232,000, the highest since January 2010 even as builders continue to seek workers and lots. The increase in sales and inventories signifies continued builder optimism and customer demand growth. Regionally, sales increased the most in the West at 20.5% month-over-month. For the year, the West is ahead of last year’s 11 month sum by 19.5%.
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* Foreclosure Starts Fall to Lowest Level Since April 2006. The number of homes that had foreclosure proceedings started against them hit the lowest level in nine years in the month of November, a new report from Black Knight Financial Services showed. According to Black Knight’s “First Look” at November’s mortgage performance data, there were only 66,000 foreclosure starts in the month of November, the lowest total since April 2006. That’s down 9.02% from October and down 9.76% from November 2014. Additionally, the inventory of loans in foreclosure continued to decline in November, falling 21% year-over-year to 1.38%. The year-over-year decline means that there were 185,000 fewer loans in foreclosure in November 2015 than there were in November 2014. Overall, there are less than 700,000 active foreclosures remaining, Black Knight’s report showed.
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* Freddie Mac’s Five Housing Predictions for 2016. With just a few days left in 2015, Freddie Mac is looking towards 2016 and trying to predict just what’s going to happen in housing over the next 12 months. Freddie Mac’s chief economist, Sean Becketti, said that interest rates should remain at “historically low levels” throughout 2016, in spite of whatever moves the Federal Reserve is expected to make. Here are five more housing predictions for 2016, courtesy of Freddie Mac: (1) Expect the 30-year fixed-mortgage to average below 4.5% for 2016 on an annualized basis, (2) Gradually higher mortgage interest rates will present an affordability challenge, but expect a strengthening labor market and pent-up demand to carry 2015’s home sales momentum into 2016, (3) Expect house price growth to moderate a bit to 4.4% in 2016, (4) Expect total housing starts to increase 16% year-over-year and total home sales to increase 3% and (5) While home purchases will increase next year, higher interest rates will reduce the refinance volume pushing overall mortgage originations lower in 2016 than in 2015.
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* Record-Setting Solar Market Shines Light on New Design Trends. 2015 could very well be a record-setting year for the solar market. The third quarter set another record for growth of residential solar installations, increasing 69% year-over-year and accounting for 41% of the U.S. solar market. Coupled with the likely extension of several energy efficient tax credits, the solar market is poised for an even bigger boom over the next five years. As the United States increasingly embraces solar energy, design trends in home building will continue to evolve. This evolution is changing perspectives of builders, architects and home owners alike, many of whom previously considered solar panels to be eyesores, more than anything. “The key is to integrate them as early as possible into the overall design process,” said James Hannah, director of client energy services at Bright Power.
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* U.S. Jobless Claims Near 42-Year Low as Labor Market Tightens. The number of Americans filing for unemployment benefits fell more than expected last week, nearing a 42-year low as labor market conditions continued to tighten in a boost to the economy. Initial claims for state unemployment benefits dropped 5,000 to a seasonally adjusted 267,000 for the week ended December 19, not far from levels last seen in late 1973, the Labor Department said on Thursday. Claims have been below 300,000, a threshold associated with a buoyant labor market, for 42 consecutive weeks. That is the longest stretch since the early 1970s.
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Have a productive week!


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