The attention grabbing headline This Week in Real Estate was from the Federal Housing Administration and their decision to reduce the annual insurance premiums on most FHA mortgages. Below are a few highlights from the second week of January that influence our business:
* Supply Watch: Gradual Single-Family Construction Expected in 2017. More single-family homes will be constructed in 2017, but at a gradual rate, reported economists at the recent National Association of Home Builders (NAHB) International Builders’ Show. The NAHB expects single-family construction to rise 10 percent to 855,000 units, and to 12 percent to 961,000 in 2018. Sixty-four percent of home builders, according to NAHB Chief Economist Robert Dietz, are seeing “low” to “very low” lot supplies. “While positive developments on the demand side will support solid growth in the single-family housing sector in 2017, builders in many markets continue to face supply-side constraints led by the three Ls – lots, labor and lending,” said Dietz. Confidence and growth in the economy could give home-building a boost, with home builders optimistic that the new administration will lower construction costs. Said Dietz, “Regulatory requirements make up nearly 25% of the cost of a new home.
Full Story… http://www.nahb.org/en/news-and-publications/press-releases/2017/01/housing-will-continue-gradual-climb-to-higher-ground-in-2017.aspx
* FHA To Reduce Annual Insurance Premiums on Most Mortgages. As the nation’s housing market continues to improve, U.S. Housing and Urban Development Secretary Julian Castro announced this week the Federal Housing Administration (FHA) will reduce the annual premiums most borrowers will pay by a quarter of a percent. FHA’s new premium rates are projected to save new FHA-insured homeowners an average of $500 this year. FHA is reducing its annual mortgage insurance premium by 25 basis points for most new mortgages with a closing date on or after January 27, 2017. “After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families,” said Secretary Castro. “This is a fiscally responsible measure to price our mortgage insurance in a way that protects our insurance fund while preserving the dream of homeownership for credit-qualified borrowers.”
Full Story… https://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2017/HUDNo_17-003
* Foreclosure Inventory Declines Another 30%. Once again, foreclosure inventory declined 30% annually in November, and completed foreclosures decreased 25.9% from November 2015, according to the November 2016 National Foreclosure Report from CoreLogic. Since November of 2015, foreclosures dropped from 35,000 to 26,000. This represents a decrease of 78.2% from September 2010’s peak of 118,339 foreclosures. “The 7% appreciation in home prices through November 2016 has added an average of $12,500 in home-equity wealth per homeowner across the U.S. during the last year,” CoreLogic President and CEO Anand Nallathambi said. “Sustained growth in home prices is clearly bolstering homeowners’ spending power and balance sheets and, as a result, spurring a continued drop in defaults.”
Full Story… http://www.corelogic.com/about-us/news/corelogic-reports-26,000-completed-foreclosures-in-november-2016.aspx
Have a productive week.