Construction spending held firm in June, inching down fractionally from the May level and increasing a bit compared to June 2019. The U.S. Census Bureau said total spending during the month was at a seasonally adjusted annual rate of $1.355 trillion, down 0.7 percent from the $1.365 trillion spending rate in May. On an annual basis the rate was up 0.1 percent. On an unadjusted basis there was $123.377 billion spent compared to $117.226 billion the prior month. Spending for the first six months of the year was up 5.0 percent from the same period in 2019 at $667.920 billion....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
In the second quarter of 2020, 11 percent of American adults were planning on purchasing a home over the next 12 months, and of those, almost half were actively engaged in doing so. Rose Quint, writing in the National Association of Home Builders' (NAHB's) Eye on Housing blog says that the 49 percent who were actively shopping was significantly higher than a year ago when 41 percent were in the game but was identical to the share in Q1. Quint says this suggests that the COVID-19 crisis and its accompanying record-low mortgage rates have converted some prospective buyers into active buyers. The share of buyers who were actively looking versus thinking about it differs significantly by age group. Of Millennials planning a home purchase in the next year, 57 percent are already actively looking but among Boomers, that share is only 37 percent. Among Gen Z and Gen X buyers the share who were active was 40 percent and 47 percent, respectively. Regionally those in the Northeast are the most likely to be actively engaged in the purchase process (57 percent), compared to 44 percent in the Midwest, 45 percent in the West, and 50 percent in the South. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The last report from Freddie Mac put its 30-year fixed rate mortgage (FRM) at 2.99 percent, up 1 basis point from the all-time low. Black Knight, in its new Mortgage Monitor, says that has made home affordability the best in four years. As of mid-July, it required only 19.8 percent of the nation's median monthly income to make the mortgage payment on an average priced home using that 30-year FRM and a 20 percent down payment. That is more than 5 percent below the average over the 1995-2003 period. The required monthly payment, $1,071, is 6 percent less than last July despite an average $12,000 increase in home prices over that same period. After 97 consecutive months, these record-low mortgage rate have made homeownership the most affordable it has been since 2016, and, while many areas, especially those along the coasts, remain out of reach for many low and middle-income earners, each of the 25 markets are seeing their strongest affordability in more than 2 years. Black Knight says, within the 100 largest markets several, including Virginia Beach, Hartford, and Scranton, have the strongest affordability levels in a decade and a half and six states, Louisiana, Arkansas, Iowa, West Virginia, Kentucky and Maryland, payment-to-income ratios are the lowest in more than 25 years....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The National Home Builders Association (NHBA) has been saying since the COVID-19 virus first began to ravage the economy, that it might be housing that would drive the eventual recovery. Now they have some real evidence. The record setting 32.9 percent second quarter decline in the gross domestic product (GDP) revealed on Thursday had at least one bright spot. NAHB's chief economist Robert Dietz says the share of residential related economic activity reached its highest mark since the third quarter of 2007, increasing to 16.2 percent during the otherwise dismal quarter. Part of the reason for the growing share, of course, was the weakness of other sectors, and the residential fixed investment share held at 3.3 percent of GDP. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
As of Wednesday, there were 4.102 million mortgages in forbearance plans. This is 7.7 percent of the 53 million loans in servicer portfolios. Black Knight said its weekly survey noted a 17,000-loan decrease in total forborne loans over the previous week. What remains represents $879 million in unpaid principal. The number of GSE loans (Fannie Mae and Freddie Mac) loans in forbearance fell by 30,000 to 1.595 million, 5.7 percent of its total portfolio and an unpaid balance of $335 billion. Loans serviced for portfolio and private label securities (PLS) were also down, declining by 5,000 to 1.072 million or 8.2 percent of the total. However, loans serviced for Ginnie Mae, which guarantees FHA, VA, and USDA loans, rose by 18,000 loans to the highest level, 1.435 million, since early July. It was the third straight week of increases in that portfolio and brought the share of forbearances to 11.9 percent of the Ginnie Mae portfolio and a balance of $247 billion....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The performance of mortgage loan servicers is lacking in the eyes of many of their customers, even this early in the pandemic driven recession. J.D. Power's 2020 U.S. Primarily Mortgage Servicer Satisfaction Study found customers reporting long wait times to speak with customer service representatives and little proactive communication on the part of the companies. J.D. Power surveyed customers 7,275 customers who originated or refinanced mortgages more than 12 months earlier on the performance of more than 30 of the nation's largest servicers. The survey, fielded in March and April, looked at performance across six factors, onboarding, billing and payment, administration of escrow accounts, fees, communications, and interaction via websites, live and automated phone. The study also explores customer satisfaction based on behavioral segments, such as risk/loan status, servicing transfers, tenure with servicer and demographics....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Both government supported enterprises (GSE) reported increased profits in the second quarter of 2020 compared to Q1. Fannie Mae said its net comprehensive income was $2.53 billion compared to $476 million and Freddie Mac's quarterly results were 1.94 billion, an increase of $1.32 billion from the previous period. Both companies had reported extraordinarily low net profits in Q1, largely due to a shift from credit-related income to credit-related expenses as allowances for loan losses were increased to reflect expected impacts from the COVID-19 pandemic. Freddie Mac also attributed the Q1 downturn to lower net interest income....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Pending home sales soared again in June, although the liftoff was relatively shallow compared to the 43 percent increase in May. The National Association of Realtors'® (NAR's) Pending Home Sales Index (PHSI). The index, a forward-looking indicator based on contracts to purchase existing homes, rose 16.6 percent compared to May, and increased year-over-year by 6.3 percent. The index is now at 116.1. The two months of improving activity have brought the index back from its April level of 69.0 where it landed after falling by more than 20 percent in both that month and in March as much of the nation was shut down by the COVID-19 pandemic. The gains were above even the best guesses by analysts polled by Econoday. Their predictions ranged from a 10 percent downturn to gains of 15.6 percent. The consensus was an increase of 5.2 percent. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Freddie Mac reported this week that its total mortgage portfolio increased at an annualized rate of 14.2 percent in June compared to a 5.5 percent gain in May. The portfolio balance at the end of the period was $2.46 trillion compared to $2.407 trillion at the end of May and $2.239 trillion a year earlier. The growth rate for the year to date is 9.0 percent. Purchases and Issuances totaled $94.331 billion and Sales were ($1.880) billion. The May numbers were $78.329 billion and ($2.799) billion, respectively. Single-family refinance loan purchase and guarantee volume was $65.500 billion in June compared to $54.500 billion in May and representing a 78 percent share of total single-family mortgage portfolio purchases and issuances compared to 76 percent the previous month....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Mortgage application volume declined for the first time in four weeks during the week ended July 24. The Mortgage Bankers Association (MBA) said is Market Composite Index, a measure of that volume, was down 0.8 percent on a seasonally adjusted basis from the prior week and down 1 percent before adjustment. The Refinance Index dipped 0.4 percent from the previous week although it was still 121 percent higher than the same week in 2019 and made up 65.1 percent of total applications. The share was 64.8 percent the previous week. The seasonally adjusted Purchase Index ticked down 2 percent from one week earlier. The unadjusted index 1 percent lower week-over-week but up 21 percent on an annual basis. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The U.S. homeownership rate moved significantly higher in the second quarter of 2020, reaching the highest level since the third quarter of 2008 at a rate of 67.9 percent. The U.S. Census Bureau reported the rate in the first quarter of the year was 65.3 percent and it was 64.1 percent a year earlier. Homeownership topped 69 percent for most of 2004 and into early 2005 before beginning a steadily decline to a low of 62.9 percent in the second quarter of 2016. The year-over-year increase in the second quarter of 2020, 3.8 percentage points, represents 76 percent of the aggregate gain in the rate since that all-time low....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Home prices increases slowed slightly in May on both a month-over-month and an annual basis according to the S&P CoreLogic Case-Shiller Indices. The U.S. National Home Price Index which covers all nine U.S. census divisions, rose 4.5 percent in May compared to a year earlier. In April, the annual gain was 4.6 percent. There was an increase of 0.7 percent from April to May before seasonal adjustment and 0.1 percent afterward. Case-Shiller again reported that, because of pandemic-related delays in the Wayne County, Michigan deed recording office, sales transactions for Detroit, are unavailable. Therefore, that city is not included in the composite indices. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The National Association of Home Builders' (NAHB') Housing Trends Report for the second quarter of 2020 found slightly less than a quarter of prospective home buyers could afford a median-priced home in their local markets, leaving 77 percent shut out. However, Rose Quint, writing in NAHB's Eye on Housing blog, calls that an improvement from a year ago when only 20 percent could buy. She says that lower interest rates are responsible for the change. There is remarkable similarity across generations. Among Gen Z, Millennials, and Boomers, 76 percent of buyers can afford fewer than half the homes for sale in their markets. Among Gen X buyers the share is even higher, 78 percent. There was also little difference in affordability across regions. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
New Home sales have done it again, rising for the third straight month. The U.S. Census Bureau and Department of Housing and Urban Development estimate that newly constructed single-family homes were sold at a seasonally adjusted annual rate of 776,000 units. This is a 13.8 percent increase over the May rate, which was revised higher, from 676,000 units to 682,000. Sales are now greater than the same month in 2019 for the first time since the pandemic struck, up 6.9 percent compared to June of last year. They also topped the 774,000 units reported in January 2020, said to be a 13-year high. Sales were higher than even the most optimistic projection by analysts polled by Econoday. Their forecasts ranged from a 648,000-unit annualized rate to 720,000. The consensus was 700,000. On an unadjusted basis there were 74,000 new homes sold during the month. Sales in May were estimated at 64,000. For the year-to-date sales have totaled 372,000, up from 360,000 for the first half of 2019, a 3.2 percent gain....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
It had been threatened from the beginning of the Trump administration, but this week the hammer fell. U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson has announced the formal termination of the Obama Administration's Affirmatively Furthering Fair Housing (AFFH) regulation issued in 2015. In a press release Carson called the regulation "complicated, costly, and ineffective." Under the rule, any community receiving HUD money was required to analyze its housing occupancy by race, disability, familial status, economic status, English proficiency, and other categories and analyze any factors that present barriers to housing. It then must then formulate a plan to eliminate those barriers which must be approved or disapproved by HUD. This must be done every five years at both a local and regional level. Federal funds could be withheld from any jurisdiction that didn't make sufficient effort to comply. HUD had been nibbling away at the regulation for several years. In January 2018 it suspended the regulation's 92 question grading tool and announced it was suspending local government's obligation to comply with the rule until late 2020. In January of this year the agency published a substitute regulation called "Preserving Community and Neighborhood Choice" and invited public comment. According to the National Fair Housing Alliance (NFHA), 19,500 comments were submitted....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.