Refinancing activity, positive news for housing starts, and builder confidence dominate the headlines in This Week in Real Estate. Below are a few of the highlights from the third week of 2015:
* Mortgage applications rise on refinancing surge. Applications to refinance increased 22 percent from the previous week, and are now up 63 percent from a year ago. “This increase was largely due to mortgage rates dropping to their lowest level since May 2013. However, the recent reduction in FHA mortgage insurance premiums also played a role: FHA refinance applications increased 57 percent last week,” said Mike Fratantoni, MBA chief economist. Full story… http://www.cnbc.com/id/102353506
* Confidence among U.S. home builders held steady in January, giving back very little following a sizeable jump toward the end of 2014. A monthly index of builder sentiment from the National Association of Home Builders fell one point in January to 57 from December. Anything above 50 is considered positive sentiment, and this marks seven straight months above 50. “Steady economic growth, rising consumer confidence and a growing labor market will help the housing market continue to move forward in 2015,” said the association’s Chief Economist David Crowe. On a three-month moving average, builder confidence in the West rose by four points to 66. Full Story… http://www.cnbc.com/id/102350914
* Builders broke ground in December on the most single-family homes in almost seven years, propelling an unexpectedly large gain in U.S. housing starts that signals construction will contribute to economic growth in 2015. For all of 2014, groundbreaking increased 8.8 percent to 1.01 million units, the highest since 2007. Single-family home starts, the largest part of the market, jumped 7.2 percent to a 728,000-unit pace, the highest level since March 2008. Single-family permits rose 4.5 percent to their highest level since January 2008. Full Story… http://www.cnbc.com/id/102352190
* Fannie Mae’s economists expect the economy to strengthen in 2015 and that will “drag” housing into a better cycle this year. The company’s forecast for the year includes a moderate acceleration of economic growth, “driven by strengthening private domestic demand, especially consumer spending, amid continued low gasoline prices, firming labor market conditions, rising household net worth through both financial and housing wealth, improving consumer and business confidence, and reduced fiscal headwinds.” The collapse in oil prices was one of the big surprises of 2014. Along with the strengthening of the dollar to decades-high levels and the softening of other commodity prices, disinflationary pressures seem to have contributed to the bond rally and the resulting drop in interest rates. Full Story… http://www.mortgagenewsdaily.com/01222015_fannie_mae_forecast.asp
* Seattle home receives Remodel of the Year honors in National Design Competition. The Book House in Seattle has been selected as the Remodel of the Year in the 2014 Best in American Living Awards (BALA) by the National Association of Home Builders. In its 31st year, BALA recognizes outstanding achievement by builders and design professionals in all sectors of the residential industry including single-family production, custom, rental, affordable, interiors, remodeling, community and international. Full Story… http://www.nahb.org/news_details.aspx?newsID=17085
Have a productive week!