All posts in "Real Estate"

Schedule for Week of Sept 24, 2017

{pixabay|100|campaign}Schedule for Week of Sept 24, 2017

by Bill McBride on 9/23/2017 08:09:00 AM

The key economic report this week is New Home sales for August on Tuesday.

Other key indicators include the third estimate of Q2 GDP, and July Case-Shiller house prices.

—– Monday, Sept 25th —–

8:30 AM ET: Chicago Fed National Activity Index for August. This is a composite index of other data.

10:30 AM: Dallas Fed Survey of Manufacturing Activity for September.

—– Tuesday, Sept 26th —–

Case-Shiller House Prices Indices9:00 AM ET: S&P/Case-Shiller House Price Index for July.

This graph shows the nominal seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the June 2017 report (the Composite 20 was started in January 2000).

The consensus is for a 5.9% year-over-year increase in the Comp 20 index for July.

Early: Reis Q3 2017 Apartment Survey of rents and vacancy rates.

New Home Sales10:00 AM ET: New Home Sales for August from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the July sales rate.

The consensus is for 583 thousand SAAR, unchanged from 571 thousand in July.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for September.

12:45 PM: Speech by Fed Chair Janet Yellen, Inflation, Uncertainty, and Monetary Policy, 59th NABE Annual Meeting, Cleveland, Ohio

—– Wednesday, Sept 27th —–

7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: Durable Goods Orders for August from the Census Bureau. The consensus is for a 1.5% increase in durable goods orders.

10:00 AM: Pending Home Sales Index for August. The consensus is for a 0.1% decrease in the index.

—– Thursday, Sept 28th —–

8:30 AM ET: The initial weekly unemployment claims report will be released. The consensus is for 270 thousand initial claims, up from 259 thousand the previous week.

8:30 AM: Gross Domestic Product, 2nd quarter 2017 (Third estimate). The consensus is that real GDP increased 3.1% annualized in Q2, up from second estimate of 3.0%.

11:00 AM: the Kansas City Fed manufacturing survey for September.

—– Friday, Sept 29th —–

Early: Reis Q3 2017 Office Survey of rents and vacancy rates.

8:30 AM: Personal Income and Outlays for August. The consensus is for a 0.3% increase in personal income, and for a 0.1% increase in personal spending. And for the Core PCE price index to increase 0.2%.

9:45 AM: Chicago Purchasing Managers Index for September. The consensus is for a reading of 58.6, down from 58.9 in August.

10:00 AM: University of Michigan’s Consumer sentiment index (final for September). The consensus is for a reading of 97.2, unchanged from the preliminary reading 97.6.

Published at Sat, 23 Sep 2017 12:09:00 +0000

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Vehicle Forecast: Sales Expected to Exceed 17 million SAAR in September

{pixabay|100|campaign}Vehicle Forecast: Sales Expected to Exceed 17 million SAAR in September

by Bill McBride on 9/22/2017 02:56:00 PM

The automakers will report September vehicle sales on Tuesday, October 3rd.

Note: There were 26 selling days in September 2017, there were 25 in September 2016.

From WardsAuto: Forecast: SAAR Expected to Surpass 17 Million in September

A WardsAuto forecast calls for U.S. light-vehicle sales to reach a 17.5 million-unit seasonally adjusted annual rate in September, following August’s 16.0 million SAAR and ending a 6-month streak of sub-17 million figures. In same-month 2016, the SAAR reached 17.6 million.

Preliminary assumptions pointed to October, rather than September, as the turning point for the market, as consumers replace vehicles lost due to natural disasters and automakers push sales to clear out excess model-year ’17 stock. However, the winds have already begun to turn, and September sales will be significantly higher than originally expected.
emphasis added

Sales have been below 17 million SAAR for six consecutive months.

Published at Fri, 22 Sep 2017 18:56:00 +0000

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Black Knight: Hurricane Harvey Could Result in 300,000 New Mortgage Delinquencies

by WikiImages from Pixabay

Black Knight: Hurricane Harvey Could Result in 300,000 New Mortgage Delinquencies

by Bill McBride on 9/08/2017 09:28:00 AM

From Black Knight: Black Knight: Hurricane Harvey Could Result in 300,000 New Mortgage Delinquencies, with 160,000 Borrowers Becoming Seriously Past Due

• FEMA-designated disaster areas related to Hurricane Harvey are home to 1.18 million mortgaged properties

• Harvey-related disaster areas contain over twice as many mortgaged properties as those connected to Hurricane Katrina in 2005, carrying nearly four times the unpaid principal balance

• Post-Katrina mortgage delinquencies in Louisiana and Mississippi FEMA-designated disaster areas soared 25 percentage points, peaking at over 34 percent

• A similar impact to Harvey-related disaster areas would equate to 300,000 borrowers missing at least one mortgage payment, and 160,000 becoming 90 or more days past due

Today, the Data & Analytics division of Black Knight Financial Services, Inc. released an updated assessment of the potential mortgage-related impact from Hurricane Harvey. As Black Knight Data & Analytics Executive Vice President Ben Graboske explained, using post-Katrina Louisiana and Mississippi as benchmarks presents the possibility for significant rises in both early and long-term delinquencies.

“Although the situation around Hurricane Harvey continues to evolve, millions of American lives have already been impacted by the storm and immense flooding,” said Graboske. “For many, their struggles are just beginning. Using post-Hurricane Katrina as a model, Black Knight has found that as many as 300,000 homeowners with mortgages in FEMA-designated Harvey disaster areas could become past due over the next few months. Post-Katrina, delinquencies spiked in Louisiana and Mississippi disaster areas, jumping 25 percent to peak at 34 percent of all mortgaged properties being past due. The serious delinquency rate – tracking mortgages 90 or more days past due, but not yet in foreclosure – rose to more than 16 percent. New Orleans was hardest hit, with its delinquency jumping by 46 percentage points to nearly 55 percent, and the serious delinquency rate increasing by 24 percent

Published at Fri, 08 Sep 2017 13:28:00 +0000

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Update: Framing Lumber Prices Up Year-over-year

 

Update: Framing Lumber Prices Up Year-over-year

by Bill McBride on 9/07/2017 11:36:00 AM

Here is another update on framing lumber prices. Early in 2013 lumber prices came close to the housing bubble highs – and prices are once again near the bubble highs.

The price increases in early 2013 were due to a surge in demand (more housing starts) and supply constraints (framing lumber suppliers were working to bring more capacity online).

Prices didn’t increase as much early in 2014 (more supply, smaller “surge” in demand).

In 2015, even with the pickup in U.S. housing starts, prices were down year-over-year.  Note: Multifamily starts do not use as much lumber as single family starts, and there was a surge in multi-family starts.  This decline in 2015 was also probably related to weakness in China.

Lumcber PricesClick on graph for larger image in graph gallery.

This graph shows two measures of lumber prices: 1) Framing Lumber from Random Lengths through early Sept 2017 (via NAHB), and 2) CME framing futures.

Prices in 2017 are up solidly year-over-year and might approach or exceed the housing bubble highs in the Spring of 2018.

Right now Random Lengths prices are up 15% from a year ago, and CME futures are up about 25% year-over-year.

There is a seasonal pattern for lumber prices. Prices frequently peak around May, and bottom around October or November – although there is quite a bit of seasonal variability.

 

Published at Thu, 07 Sep 2017 15:36:00 +0000

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Mortgage Rates at 2017 Lows

 

Mortgage Rates at 2017 Lows

by Bill McBride on 9/07/2017 07:06:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Little-Changed at 2017 Lows

Mortgage rates didn’t move much today, despite plenty of strength in underlying bond markets.  This would normally coincide with lower rates, so what’s the deal?

The main issue is timing.  Bond markets weakened yesterday afternoon.  This would imply higher rates, but most lenders never went to the trouble of adjusting rate sheets intraday.  As I said yesterday, those lenders would begin today at a disadvantage.  Indeed they did, and that disadvantage was generally erased by the improvement in bond markets.  Thus, lenders who didn’t move rates higher yesterday were able to keep today’s rates relatively unchanged, thanks to bond market gains.  Lenders who DID raise rates yesterday were able to offer slightly lower rates today.

All in all, the average lender is quoting the lowest rates of 2017, with more than a few lenders at 3.75% on a top tier conventional 30yr fixed scenario.  Most lenders are able to quote 3.875% now, though a few remain at 4.0%.
emphasis added

Published at Thu, 07 Sep 2017 23:06:00 +0000

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Fannie Mae: Mortgage Serious Delinquency rate declined in July, Lowest since December 2007

File photo: A stands outside Fannie Mae headquarters in Washington February 21, 2014. REUTERS/Kevin Lamarque

 

Fannie Mae: Mortgage Serious Delinquency rate declined in July, Lowest since December 2007

by Bill McBride on 8/31/2017 05:09:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency rate declined to 1.00% in July, from 1.01% in June. The serious delinquency rate is down from 1.30% in July 2016.

This is the lowest serious delinquency rate since December 2007.

These are mortgage loans that are “three monthly payments or more past due or in foreclosure”.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.

Fannie Freddie Seriously Delinquent RateClick on graph for larger image

Although the rate is declining, the “normal” serious delinquency rate is somewhat under 1%.

The Fannie Mae serious delinquency rate has fallen 0.30 percentage points over the last year, and at that rate of improvement, the serious delinquency rate should be below 1% next month.

By vintage, for loans made in 2004 or earlier (4% of portfolio), 2.63% are seriously delinquent. For loans made in 2005 through 2008 (7% of portfolio), 5.71% are seriously delinquent, For recent loans, originated in 2009 through 2017 (89% of portfolio), only 0.32% are seriously delinquent. So Fannie is still working through poor performing loans from the bubble years.

Note: Freddie Mac reported earlier.

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These REITs Look Techinically Strong

 

These REITs Look Techinically Strong

By Cory Mitchell | August 23, 2017 — 1:00 PM EDT

Real estate investment trusts, or REITs, are a way to add some dividend income to a portfolio, but that doesn’t mean giving up capital gains. The following REITs have been in strong uptrends throughout the year, and recent pullbacks (which look to have ended) may provide an opportunity to get in for another rally.

The most recent rally in AGNC Investment Corp. (AGNC) has been in play since December. The price has pulled back from the June high of $22.34, yet the overall uptrend remains intact. In late July and early August, the price tested the rising trendline near $21. After staying in that region for three weeks, the price pushed higher in mid-August, indicating that the $21 area is still acting as support and that the next moves higher may be under way. Since this is an uptrend, the expectation is that the price will rally above the prior higher of $22.34. Traders could consider a price target near $23 for a swing trade. Longer-term traders may wish to hold the shares longer to take advantage of the dividend, but they should be wary of a decline below $20.75. Based on the $21.55 close on Aug. 22, the dividend yield for AGNC is 10%. (See also: AGNC Investment’s Earnings Surpass Estimates in Q2.)

Technical chart showing AGNC Investment Corp. (AGNC) near a trendline during an uptrend

UDR, Inc. (UDR) has been riding a rising trendline higher since November. July and August have seen the price repeatedly touch the trendline as it edges higher. While the price of a REIT can move quickly, it will often oscillate as UDR done throughout August. Those oscillations, if they continue, could provide an opportunity to get an entry point closer to the trendline between $39 and $38.50. Based on the uptrend, the price is expected to make a new high above $40.71. For swing trading, a target could be near $41.50. Once gain, longer-term traders may wish to hold UDR for longer but should be wary of a decline back below $37.35. UDR’s dividend yield is 3%. (For more, see: UDR Q2 FFO In Line With Expectations, Revenues Increase.)

Technical chart showing United Dominion Realty Trust (UDR) near a trendline in an uptrend

Two Harbors Investment Corp. (TWO) had a rather steep decline in late June and early July, but the price stabilized near support at $9.60. It has since rallied back above $10. A good entry point would be $9.80 to $9.90 if the price pulls back slightly from the $10.17 Aug. 22 close. Traders should be wary of declines below $9.55. Stop-loss orders can be placed just below that level. The swing trade target is $10.75. With a 10% dividend yield, some investors may wish to hold for longer, keeping in mind that the uptrend is drawn into question on a decline below $9.55. (See also: REIT Q2 Earnings: ETFs in Focus.)

Technical chart showing Two Harbors Investment Corp. (TWO) near a trendline in an uptrend

The Bottom Line

These REITs are in strong uptrends and have not shown signs of letting up just yet. All three recently tested a support level or trendline and responded by rallying. This indicates that the pullbacks could be over and that another move up is under way. REITs typically are not huge movers, but the dividend combined with capital gains can produce some solid trades, both for short-term and longer-term traders. Trends change, so if the price drops back below support, traders should consider exiting. Also, it is recommended that traders risk only a small percentage of account capital on any single trade. (For additional reading, check out: 5 Types of REITs and How to Invest in Them.)

Charts courtesy of StockCharts.com. Disclosure: The author does not have positions in the REITs mentioned.

 

Published at Wed, 23 Aug 2017 17:00:00 +0000

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Housing Starts increased to 1.215 Million Annual Rate in June

Housing Starts increased to 1.215 Million Annual Rate in June

by Bill McBride on 7/19/2017 08:39:00 AM

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,215,000. This is 8.3 percent above the revised May estimate of 1,122,000 and is 2.1 percent above the June 2016 rate of 1,190,000. Single-family housing starts in June were at a rate of 849,000; this is 6.3 percent above the revised May figure of 799,000. The June rate for units in buildings with five units or more was 359,000.

Building Permits:
Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,254,000. This is 7.4 percent above the revised May rate of 1,168,000 and is 5.1 percent above the June 2016 rate of 1,193,000. Single-family authorizations in June were at a rate of 811,000; this is 4.1 percent above the revised May figure of 779,000. Authorizations of units in buildings with five units or more were at a rate of 409,000 in June.
emphasis added

Total Housing Starts and Single Family Housing StartsClick on graph for larger image.

The first graph shows single and multi-family housing starts for the last several years.

Multi-family starts (red, 2+ units) increased in June compared to May.  Multi-family starts are down 13% year-over-year.

Multi-family is volatile month-to-month, but has been mostly moving sideways over the last couple of years.

Single-family starts (blue) increased in May, and are up 10.3% year-over-year.

Total Housing Starts and Single Family Housing Starts
The second graph shows total and single unit starts since 1968.

The second graph shows the huge collapse following the housing bubble, and then – after moving sideways for a couple of years – housing is now recovering (but still historically low),

Total housing starts in June were above expectations, and starts for May were revised up.    This was a solid report.  I’ll have more later …

Published at Wed, 19 Jul 2017 12:39:00 +0000

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MBA: Mortgage Applications Increase in Latest Weekly Survey

MBA: Mortgage Applications Increase in Latest Weekly Survey

by Bill McBride on 7/19/2017 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 6.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 14, 2017. Last week’s results included an adjustment for the Fourth of July holiday.

… The Refinance Index increased 13 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 27 percent compared with the previous week and was 7 percent higher than the same week one year ago. …

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged at 4.22 percent, with points decreasing to 0.31 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Mortgage Refinance IndexClick on graph for larger image.

The first graph shows the refinance index since 1990.

Refinance activity will not pick up significantly unless mortgage rates fall well below 4%.

Mortgage Purchase Index
The second graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 7% year-over-year.

Published at Wed, 19 Jul 2017 11:00:00 +0000

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Fannie Mae: Mortgage Serious Delinquency rate declined in May, Lowest since December 2007

 

Fannie Mae: Mortgage Serious Delinquency rate declined in May, Lowest since December 2007

by Bill McBride on 6/29/2017 04:17:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency rate declined to 1.04% in May, from 1.07% in April. The serious delinquency rate is down from 1.38% in May 2016.

This is the lowest serious delinquency rate since December 2007.

These are mortgage loans that are “three monthly payments or more past due or in foreclosure”.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.

Fannie Freddie Seriously Delinquent RateClick on graph for larger image

Although the rate is declining, the “normal” serious delinquency rate is under 1%.

The Fannie Mae serious delinquency rate has fallen 0.34 percentage points over the last year, and at that rate of improvement, the serious delinquency rate will below 1% this Summer.

Note: Freddie Mac reported earlier.

Published at Thu, 29 Jun 2017 20:17:00 +0000

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MBA: Mortgage Applications Increase in Latest Weekly Survey

by paulbr75 from Pixabay

MBA: Mortgage Applications Increase in Latest Weekly Survey

by Bill McBride on 6/07/2017 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 7.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 2, 2017. This week’s results included an adjustment for the Memorial Day holiday.

… The Refinance Index increased 3 percent from the previous week. The seasonally adjusted Purchase Index increased 10 percent from one week earlier to its highest level since May 2010. The unadjusted Purchase Index decreased 14 percent compared with the previous week and was 6 percent higher than the same week one year ago. …

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged at 4.17 percent, with points decreasing to 0.32 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Mortgage Refinance IndexClick on graph for larger image.

The first graph shows the refinance index since 1990.

Refinance activity will not increase significantly unless rates fall sharply.

Mortgage Purchase Index
The second graph shows the MBA mortgage purchase index.

Even with the increase in mortgage rates late last year, purchase activity is still up 6% year-over-year.

Published at Wed, 07 Jun 2017 11:00:00 +0000

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MBA: Mortgage Applications Decrease in Latest Weekly Survey

MBA: Mortgage Applications Decrease in Latest Weekly Survey

by Bill McBride on 5/31/2017 07:00:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 3.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 26, 2017.

… The Refinance Index decreased 6 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 7 percent higher than the same week one year ago. …

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged at 4.17 percent, with points decreasing to 0.32 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Mortgage Refinance IndexClick on graph for larger image.

The first graph shows the refinance index since 1990.

Refinance activity will not increase significantly unless rates fall sharply.

Mortgage Purchase Index
The second graph shows the MBA mortgage purchase index.

Even with the increase in mortgage rates late last year, purchase activity is still up 7% year-over-year.

Published at Wed, 31 May 2017 11:00:00 +0000

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Case-Shiller: National House Price Index increased 5.8% year-over-year in March

by image4you from Pixabay

Case-Shiller: National House Price Index increased 5.8% year-over-year in March

by Bill McBride on 5/30/2017 09:12:00 AM

S&P/Case-Shiller released the monthly Home Price Indices for March (“March” is a 3 month average of January, February and March prices).

This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.

Note: Case-Shiller reports Not Seasonally Adjusted (NSA), I use the SA data for the graphs.

From S&P: Seattle, Portland, Dallas and Denver Lead Gains in S&P Corelogic Case-Shiller Home Price Indices

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.8% annual gain in March, up from 5.7% last month and setting a 33-month high. The 10-City Composite and the 20-City Composite indices came in at 5.2% and 5.9% annual increases, respectively, unchanged from last month.

Seattle, Portland, and Dallas reported the highest year-over-year gains among the 20 cities. In March, Seattle led the way with a 12.3% year-over-year price increase, followed by Portland with 9.2%, and Dallas with an 8.6% increase. Ten cities reported higher price increases in the year ending March 2017 than in the year ending February 2017.

Before seasonal adjustment, the National Index posted a month-over-month gain of 0.8% in March. The 10-City Composite posted a 0.9% increase and the 20-City Composite reported a 1.0% increase. After seasonal adjustment, the National Index recorded a 0.3% month-over-month increase. Both the 10-City Composite and the 20-City Composite indices posted a 0.9% month-over-month increase after seasonal adjustment. Eighteen of the 20 cities reported increases in March before seasonal adjustment; after seasonal adjustment, 17 cities saw prices rise.
emphasis added

Case-Shiller House Prices IndicesClick on graph for larger image.

The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

The Composite 10 index is off 6.4% from the peak, and up 0.8% in March (SA).

The Composite 20 index is off 3.9% from the peak, and up 0.9% (SA) in March.

The National index is 2.4% above the bubble peak (SA), and up 0.3% (SA) in March.  The National index is up 38.4% from the post-bubble low set in December 2011 (SA).

Case-Shiller House Prices Indices The second graph shows the Year over year change in all three indices.

The Composite 10 SA is up 5.2% compared to March 2016.  The Composite 20 SA is up 5.9% year-over-year.

The National index SA is up 5.8% year-over-year.

Note: According to the data, prices increased in 18 of 20 cities month-over-month seasonally adjusted.

I’ll have more later.

(Why?)
Published at Tue, 30 May 2017 13:12:00 +0000

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Freddie Mac: Mortgage Serious Delinquency rate unchanged in April

{pixabay|100|campaign}Freddie Mac: Mortgage Serious Delinquency rate unchanged in April

by Bill McBride on 5/26/2017 02:44:00 PM

Freddie Mac reported that the Single-Family serious delinquency rate in April was at 0.92%, unchanged from 0.92% in March.  Freddie’s rate is down from 1.15% in April 2016.

Freddie’s serious delinquency rate peaked in February 2010 at 4.20%.

This matches last month as the lowest serious delinquency rate since May 2008.

These are mortgage loans that are “three monthly payments or more past due or in foreclosure”. 

Fannie Freddie Seriously Delinquent RateClick on graph for larger image

Although the rate is still declining, the rate of decline has slowed.

Maybe the rate will decline another 0.2 to 0.4 percentage points or so to a cycle bottom, but this is pretty close to normal.

Note: Fannie Mae will report for April soon.

(Why?)

Published at Fri, 26 May 2017 18:44:00 +0000

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AIA: Architecture Billings Index increased in March

by paulbr75 from Pixabay

AIA: Architecture Billings Index increased in March

by Bill McBride on 4/19/2017 09:55:00 AM

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.

From the AIA: Architecture Billings Index continues to strengthen

The first quarter of the year ended on a positive note for the Architecture Billings Index (ABI).  As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the March ABI score was 54.3, up from a score of 50.7 in the previous month. This score reflects a sizable increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.8, down from a reading of 61.5 the previous month, while the new design contracts index dipped from 54.7 to 52.3.

“The first quarter started out on uneasy footing, but fortunately ended on an upswing  entering the traditionally busy spring season,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD.  “All sectors showed growth except for the commercial/industrial market, which, for the first time in over a year displayed a decrease in design services.”

• Regional averages: Midwest (54.6), South (52.6), Northeast (52.4), West (50.2)

• Sector index breakdown: multi-family residential (54.6), mixed practice (53.7), institutional (52.9), commercial / industrial (49.8)
emphasis added

AIA Architecture Billing IndexClick on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 54.3 in January, up from 50.7 in February. Anything above 50 indicates expansion in demand for architects’ services.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

According to the AIA, there is an “approximate nine to twelve month lag time between architecture billings and construction spending” on non-residential construction.  This index was positive in 9 of the last 12 months, suggesting a further increase in CRE investment in 2017 and early 2018.

Published at Wed, 19 Apr 2017 13:55:00 +0000

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“Mortgage Rates Hit New 2017 Lows”

by paulbr75 from Pixabay

“Mortgage Rates Hit New 2017 Lows”

by Bill McBride on 4/11/2017 10:19:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Hit New 2017 Lows

Mortgage rates moved lower today–significantly in some cases–with the average lender making it back to 2017’s lows for the first time since January.  Rates came close to 2017’s lows in late February and again last week before officially crossing the line today.

Lenders are now fairly evenly split between 4.0% and 4.125% in terms of the most prevalent conventional 30yr fixed quote on top tier scenarios.  A few of the most aggressive lenders are now quoting rates in the high 3’s (emphasis on “few”), and there are still more than a few lenders up at 4.25%.
emphasis added

Here is a table from Mortgage News Daily:

Published at Wed, 12 Apr 2017 02:19:00 +0000

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Fannie Mae: Mortgage Serious Delinquency rate declined in February, Lowest since March 2008

 

Fannie Mae: Mortgage Serious Delinquency rate declined in February, Lowest since March 2008

by Bill McBride on 3/31/2017 02:02:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency rate declined to 1.19% in February, from 1.20% in January. The serious delinquency rate is down from 1.52% in February 2016.

This is the lowest serious delinquency rate since March 2008.

These are mortgage loans that are “three monthly payments or more past due or in foreclosure”.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.

Fannie Freddie Seriously Delinquent RateClick on graph for larger image

Although the rate is declining, the “normal” serious delinquency rate is under 1%.

The Fannie Mae serious delinquency rate has fallen 0.33 percentage points over the last year, and at that rate of improvement, the serious delinquency rate will not be below 1% until later this year.

Note: Freddie Mac reported earlier.

Published at Fri, 31 Mar 2017 18:02:00 +0000

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Fannie, Freddie may write down $21 billion due to U.S. tax cut: BMO

Photo

Fannie, Freddie may write down $21 billion due to U.S. tax cut: BMO

U.S. mortgage finance giants Fannie Mae (FNMA.PK) and Freddie Mac (FMCC.PK) may write down $21 billion of tax-related assets if there is a deep cut in the federal corporate tax rate as promised by President Donald Trump, according to an analyst at BMO Capital Markets on Friday.

These assets, known as deferred tax assets, are items such as tax credits that may be used to reduce a company’s taxes.

If the rate cut is lowered to 20 percent from 35 percent, the value of Fannie and Freddie’s deferred tax assets is worth less and it would be recognized against their capital.

The two agencies, which guarantee home loans and mortgage-backed securities, are holding little capital since they are not allowed to retain their earnings after they have been under conservatorship or government guardianship due to heavy losses from the housing market collapse more than eight years ago.

Fannie drew $116.1 billion and Freddie $71.3 billion from the U.S. Treasury Department to cover those losses. They have remitted all their profits, which are more than their draw, to the Treasury under the conservatorship arrangement.

In absence of much capital cushion, the government-sponsored enterprises (GSEs) would need borrow nearly a total of $17 billion from Treasury, BMO’s head of fixed-income strategy, Margaret Kerins, wrote in a research note.

Such a move, however, would not hurt the value of their bonds or disrupt mortgage market, she said.

“However, the potential for renewed draws is likely to be politically unpopular and may spark preemptive Treasury action

and Congress to prioritize GSE reform in addition to headline risk,” Kerins wrote.

(Reporting by Richard Leong; Editing by Jonathan Oatis and Marguerita Choy
Published at Fri, 31 Mar 2017 19:44:34 +0000

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Freddie Mac: Mortgage Serious Delinquency rate declines in February, Lowest since June 2008

 

Freddie Mac: Mortgage Serious Delinquency rate declines in February, Lowest since June 2008

by Bill McBride on 3/27/2017 12:42:00 PM

Freddie Mac reported that the Single-Family serious delinquency rate in February was at 0.98%, down from 0.99% in January.  Freddie’s rate is down from 1.26% in February 2016.

Freddie’s serious delinquency rate peaked in February 2010 at 4.20%.

This is the lowest serious delinquency rate since June 2008.

These are mortgage loans that are “three monthly payments or more past due or in foreclosure”.

Fannie Freddie Seriously Delinquent RateClick on graph for larger image

Although the rate is still declining, the rate of decline has slowed.

Maybe the rate will decline another 0.25 percentage points or so to a cycle bottom, but this is pretty close to normal.

Note: Fannie Mae will report soon.

Published at Mon, 27 Mar 2017 16:42:00 +0000

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Fannie Mae: Mortgage Serious Delinquency rate unchanged in January

 

Fannie Mae: Mortgage Serious Delinquency rate unchanged in January

by Bill McBride on 3/02/2017 06:31:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency rate was unchanged at 1.20% in January, from 1.20% in December. The serious delinquency rate is down from 1.55% in January 2016.

This ties last month as the lowest serious delinquency rate since March 2008.

These are mortgage loans that are “three monthly payments or more past due or in foreclosure”.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.

Fannie Freddie Seriously Delinquent RateClick on graph for larger image

Although the rate is declining, the “normal” serious delinquency rate is under 1%.

The Fannie Mae serious delinquency rate has fallen 0.35 percentage points over the last year, and at that rate of improvement, the serious delinquency rate will not be below 1% until later this year.

Note: Freddie Mac reported earlier.

Published at Thu, 02 Mar 2017 23:31:00 +0000

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