All posts in "Real Estate"

Pending Home Sales Index Dives to 0.1%: What’s Coming Up?

new-home-1703725_1280

by paulbr from Pixabay

Pending Home Sales Index Dives to 0.1%: What’s Coming Up?


The reset of the year for housing looks suspect at best. The pending home sales index is a barely positive 0.1 percent.

Bloomberg Econoday sees things this way.

Highlights

Pending sales of existing homes rose only 0.1 percent in October, pointing to flat results for the rest of the year in final sales. Pending sales in October were held down by weakness in the South that offset gains elsewhere. The resale market has been soft in contrast to new homes which are having a good year.

Recent History

Resales had been flat this year but rose sharply in September as indicated in advance by the pending home sales index which tracks contract signings. Forecasters see this index rising 0.8 percent in October.

Definition

The National Association of Realtors developed the pending home sales index as a leading indicator of housing activity. Specifically, it is a leading indicator of existing home sales, not new home sales. A pending sale is one in which a contract was signed, but not yet closed. It usually takes four to six weeks to close a contracted sale.

Pending Home Sales

Pending Home Sales Index

Was the pending homes sales slowdown in 2013 related to the taper tantrum and rising interest rates?

If so, there’s a steep decline in store.

Mortgage Tantrum

Average 30-Year Fixed Mortgage Rates

Chart courtesy of Mortgage News Daily, anecdotes mine.

Despite treasury rates being substantially lower than the peak in 2013, mortgage rates are well into tantrum territory.

For more details of the Taper Tantrum, please see Bond Tantrum II: Mortgage Rates Up 80 Basis Points Since July.


Please enable JavaScript to view the comments powered by Disqus.

Mike Shedlock

Mike Shedlock / Mish
Mish Talk

Michael “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com/ to learn more about wealth management for investors seeking strong performance with low volatility.

Copyright © 2005-2016 Mike Shedlock

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com

My Trading Journal: 30 Day Trading Journal

My Trading Journal: 30 Day Trading Journal

Published at Wed, 30 Nov 2016 23:04:55 +0000

Continue reading >
Share

Fed’s Beige Book: Modest to moderate expansion, Tightening labor market

 

Fed’s Beige Book: Modest to moderate expansion, Tightening labor market

by Bill McBride on 11/30/2016 02:33:00 PM

 Fed’s Beige Book “Prepared at the Federal Reserve Bank of Cleveland based on information collected on or before November 18, 2016.”

Reports from the twelve Federal Reserve Districts indicate that the economy continued to expand across most regions from early October through mid-November. Activity in the Boston, Minneapolis, and San Francisco Districts grew at a moderate pace, while Atlanta, Chicago, St. Louis, and Dallas cited modest growth. Philadelphia, Cleveland, and Kansas City cited a slight pace of growth. Richmond characterized economic activity as mixed, and New York said activity has remained flat since the last report. Outlooks were mainly positive, with six Districts expecting moderate growth.

A tightening in labor market conditions was reported by seven Districts, with modest employment growth on balance. Districts noted slight upward pressure on overall prices..
emphasis added

And on real estate:

Residential real estate activity improved across Districts. Reports about existing- and new-home sales were mixed, but most Districts noted a slight to modest increase during the period. Residential construction was up in the Cleveland, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, and Dallas Districts. Home prices grew in many Districts, including Boston, Philadelphia, Cleveland, Atlanta, St. Louis, Kansas City, and San Francisco. Philadelphia reported that the strength of the single-family market is in high-end housing. In contrast, Kansas City reported that sales of low- and medium-priced homes continued to outpace sales of higher-priced homes. Dallas reported that the sales of lower-priced homes remained solid. Home inventories were generally reported to be low or declining and restraining sales growth. Boston, Philadelphia, Cleveland, Richmond, and Minneapolis reported low or decreasing inventories. Reports on inventory levels varied in Atlanta, while inventories held steady in Kansas City.

Commercial construction activity moved higher in the New York, Cleveland, Richmond, Atlanta, St. Louis, Kansas City, and San Francisco Districts. In contrast, Minneapolis noted a slowing in commercial construction. The Boston, Richmond, Minneapolis, and San Francisco Districts reported increases in leasing activity, while Philadelphia noted a lull in nonresidential leasing growth compared with the prior period. Dallas reported leasing activity as mostly unchanged. Commercial sales activity continued to be robust in Minneapolis and grew modestly in Kansas City. Ongoing multifamily construction has been steady at a fairly high level in New York. Multifamily construction varied in the Atlanta District and slowed somewhat in Richmond, Minneapolis, and San Francisco.

Real estate is decent.

Read more at http://www.calculatedriskblog.com/2016/11/feds-beige-book-modest-to-moderate.html#4M6dZgxDm5vq7ehl.99

My Trading Journal: 30 Day Trading Journal

My Trading Journal: 30 Day Trading Journal

Published at Wed, 30 Nov 2016 19:33:00 +0000

Continue reading >
Share

First Look: 2017 Housing Forecasts

 

First Look: 2017 Housing Forecasts

by Bill McBride on 11/25/2016 08:11:00 AM

 Towards the end of each year I collect some housing forecasts for the following year.  It looks like analysts are optimistic on New Home sales for 2017, although that might change with higher mortgage rates and policy changes.  I’ll post updates as the forecasts change (and add more forecasts soon).
First a review of the previous four years …

Here is a summary of forecasts for 2016. In 2016, new home sales will probably be around 565 thousand, and total housing starts will be around 1.175 million.  Fannie Mae and Merrill Lynch were very close on New Home sales, and MetroStudy was close on starts.

Here is a summary of forecasts for 2015. In 2015, new home sales were 501 thousand, and total housing starts were 1.112 million.  Zillow, CoreLogic, and the MBA were right on with New Home sales, and CoreLogic, MetroStudy, MBA and Zillow were all correct on starts.

Here is a summary of forecasts for 2014. In 2014, new home sales were 437 thousand, and total housing starts were 1.003 million. No one was close on New Home sales (all way too optimistic), and Michelle Meyer (Merrill Lynch) and Fannie Mae were the closest on housing starts (about 10% too high). In 2014, many analysts underestimated the impact of higher mortgage rates and higher new home prices on new home sales and starts.

Here is a summary of forecasts for 2013. In 2013, new home sales were 429 thousand, and total housing starts were 925 thousand.  Barclays was the closest on New Home sales followed by David Crowe (NAHB).  Fannie Mae and the NAHB were the closest on housing starts.

The table below shows a few forecasts for 2017:

From Fannie Mae: Housing Forecast: November 2016

From NAHB: NAHB’s housing and economic forecast

From Wells Fargo: Monthly Economic Outlook

From NAR: U.S. Economic Outlook: November 2016

Note: For comparison, new home sales in 2016 will probably be around 565 thousand, and total housing starts around 1.175 million.

Housing Forecasts for 2017
New Home Sales (000s) Single Family Starts (000s) Total Starts (000s) House Prices1
Fannie Mae 671 883 1,308 4.8%2
Merrill Lynch 1,225
NAHB 647 873 1,258
NAR 623 838 1,221 4.2%3
Wells Fargo 1,180
1Case-Shiller unless indicated otherwise
2FHFA Purchase-Only Index
3NAR Median Prices

Read more at http://www.calculatedriskblog.com/2016/11/first-look-2017-housing-forecasts.html#ROyX8tl6oiFmv9Oi.99

by Bill McBride on 11/25/2016 08:11:00 AM

Stock market, trading journal, daily journal, investing journal

My Trading Journal: 30 Day Trading Journal

Published at Fri, 25 Nov 2016 13:11:00 +0000

Continue reading >
Share

Lawler: Table of Distressed Sales and All Cash Sales for Selected Cities in October

Lawler: Table of Distressed Sales and All Cash Sales for Selected Cities in October

by Bill McBride on 11/23/2016 05:12:00 PM

 Economist Tom Lawler sent me the table below of short sales, foreclosures and all cash sales for selected cities in October.
On distressed: The total “distressed” share is down year-over-year in most of these markets.

Short sales and foreclosures are down in these areas.

The All Cash Share (last two columns) is mostly declining year-over-year. As investors continue to pull back, the share of all cash buyers continues to decline.

Short
Sales
Share
Foreclosure
Sales
Share
Total
“Distressed”
Share
All
Cash
Share
Oct-
2016
Oct-
2015
Oct-
2016
Oct-
2015
Oct-
2016
Oct-
2015
Oct-
2016
Oct-
2015
Las Vegas 5.1% 6.3% 5.6% 7.3% 10.7% 13.6% 27.4% 30.9%
Reno** 1.0% 4.0% 2.0% 3.0% 3.0% 7.0%
Phoenix 1.8% 2.7% 2.0% 3.6% 3.8% 6.3% 21.0% 24.6%
Sacramento 2.3% 4.0% 2.0% 3.5% 4.3% 7.5% 14.4% 17.8%
Minneapolis 1.2% 2.3% 3.9% 7.8% 5.1% 10.1% 12.7% 15.5%
Mid-Atlantic 2.8% 3.7% 8.9% 11.9% 11.8% 15.6% 16.6% 19.3%
Florida SF 2.3% 3.6% 8.0% 15.6% 10.4% 19.3% 28.6% 34.2%
Florida C/TH 1.5% 2.1% 6.7% 13.5% 8.2% 15.7% 55.5% 61.6%
Miami MSA SF 3.5% 5.7% 8.3% 17.1% 11.8% 22.8% 29.6% 33.8%
Miami MSA CTH 1.6% 2.5% 9.1% 16.5% 10.6% 19.0% 58.8% 63.9%
Chicago (city) 13.0% 18.3%
Spokane 7.2% 12.3%
Northeast Florida 13.9% 25.6%
Orlando 29.0% 36.5%
Toledo 25.6% 30.4%
Tucson 23.4% 28.1%
Knoxville 22.6% 25.4%
Peoria 23.3% 20.8%
Georgia*** 20.1% 23.1%
Omaha 16.1% 15.5%
Pensacola
Rhode Island 9.9% 9.6%
Richmond VA 8.0% 9.3% 16.3% 17.1%
Memphis 9.3% 15.5%
Springfield IL** 7.6% 7.8%
*share of existing home sales, based on property records
**Single Family Only
***GAMLS

Read more at http://www.calculatedriskblog.com/2016/11/lawler-table-of-distressed-sales-and.html#OlLasyLwXZDjjqgg.99

by Bill McBride on 11/23/2016 05:12:00 PM
Published at Wed, 23 Nov 2016 22:12:00 +0000

Continue reading >
Share

A few Comments on October New Home Sales

https://pixabay.com/en/users/Peggy_Marco-1553824/

by Peggy_Marco from Pixabay

A few Comments on October New Home Sales

by Bill McBride on 11/23/2016 12:31:00 PM

 New home sales for October were reported below the consensus forecast at 563,000 on a seasonally adjusted annual rate basis (SAAR). And the previous months were revised down.
However, sales were up 17.8% year-over-year in October, and this is the best month for October (NSA) since 2007. And sales are up 12.7% year-to-date compared to the same period in 2015.

The glass is more than half full.  This is very solid year-over-year growth and just suggests that expectations were ahead of reality. This is why we look at the trend and not just one month.

Note that these sales (for October) were before the recent increase in mortgage rates.

Earlier: New Home Sales at 563,000 Annual Rate in October.

New Home Sales 2015 2016Click on graph for larger image.

This graph shows new home sales for 2015 and 2016 by month (Seasonally Adjusted Annual Rate).  Sales to date are up 12.7% year-over-year, because of very strong year-over-year growth over the last seven months.

Overall  I expected lower growth this year, in the 4% to 8% range.  Slower growth seemed likely this year because Houston (and other oil producing areas) will have a problem this year.   It looks like I was too pessimistic on new home sales this year.

And here is another update to the “distressing gap” graph that I first started posting a number of years ago to show the emerging gap caused by distressed sales.  Now I’m looking for the gap to close over the next several years.
 

Distressing Gap

The “distressing gap” graph shows existing home sales (left axis) and new home sales (right axis) through October 2016. This graph starts in 1994, but the relationship had been fairly steady back to the ’60s.

Following the housing bubble and bust, the “distressing gap” appeared mostly because of distressed sales.

I expect existing home sales to move more sideways, and I expect this gap to slowly close, mostly from an increase in new home sales.

However, this assumes that the builders will offer some smaller, less expensive homes. If not, then the gap will persist.

Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different.

Read more at http://www.calculatedriskblog.com/2016/11/a-few-comments-on-october-new-home-sales.html#9l5JIPw3KuwOiytA.99

by Bill McBride on 11/23/2016 12:31:00 PM

Stock market, trading journal, daily journal, investing journal

My Trading Journal: 30 Day Trading Journal

Published at Wed, 23 Nov 2016 17:31:00 +0000

Continue reading >
Share

Wednesday: New Home Sales, Unemployment Claims, FOMC Minutes, and More

Photo
tags
By TBIT from Pixabay

Wednesday: New Home Sales, Unemployment Claims, FOMC Minutes, and More

by Bill McBride on 11/22/2016 06:55:00 PM

Wednesday:

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

• At 8:30 AM, The initial weekly unemployment claims report will be released.  The consensus is for 250 thousand initial claims, up from 235 thousand the previous week.

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

• At 9:00 AM, FHFA House Price Index for September 2016. This was originally a GSE only repeat sales, however there is also an expanded index.  The consensus is for a 0.7% month-to-month increase for this index.

• At 10:00 AM, New Home Sales for September from the Census Bureau. The consensus is for an decrease in sales to 590 thousand Seasonally Adjusted Annual Rate (SAAR) in October from 593 thousand in September.

• Also at 10:00 AM, University of Michigan’s Consumer sentiment index (final for November). The consensus is for a reading of 91.6, unchanged from the preliminary reading 91.6.

• At 2:00 PM, FOMC Minutes for Meeting of November 1-2

Read more at http://www.calculatedriskblog.com/2016/11/wednesday-new-home-sales-unemployment.html#JZ6AXorJBm7H10DU.99

by Bill McBride on 11/22/2016 06:55:00 PM

Stock market, trading journal, daily journal, investing journal

My Trading Journal: 30 Day Trading Journal

Published at Tue, 22 Nov 2016 23:55:00 +0000

Continue reading >
Share

Mortgage “Rates Rip to Highest Levels Since July 2015”

new-home-1703725_1280

by paulbr75 from Pixabay

Mortgage “Rates Rip to Highest Levels Since July 2015”

by Bill McBride on 11/18/2016 05:59:00 PM

 From Matthew Graham at Mortgage News Daily: Rates Rip to Highest Levels Since July 2015

It was all pain, all the time for mortgage rates today.  Since the election, the average conventional 30yr fixed rate has risen roughly 0.5%, putting  November 2016 on a short list of 4 worst months in more than a decade.  Two of those months were back to back amid the 2013 taper tantrum and the other was at the end of 2010.  Let it be known that the recent surge in rates is more than a mere post-election knee-jerk.  Financial markets are fully repricing their expectations of the future, and we can’t even begin to assess how that future might actually pan out until Trump takes office.

In other words, buckle up for a higher mortgage rate environment.  Rates won’t necessarily be immune from good days over the next few months, but I certainly wouldn’t expect a quick, triumphant return to the promised land (rates from 2 weeks ago, and below) within the same time frame.   The most prevalent conventional 30yr fixed rate quote is now 4.125% on top tier scenarios, and more than a few lenders are already up to 4.25%.
emphasis added

CR Note: Refinance activity will decline sharply, and I expect some slowdown in housing (still thinking about this).

Here is a table from Mortgage News Daily:

Averages Current Previous Change
Mortgage News Daily updated daily
30 Yr Fixed 4.12 4.03 +0.09
15 Yr Fixed 3.35 3.27 +0.08
FHA 30 Yr 3.75 3.75
Jumbo 30 Yr 4.22 4.10 +0.12
5/1 Yr ARM 3.05 3.00 +0.05
Freddie Mac updated weekly
30 Yr Fixed 3.94 3.57 +0.37
15 Yr Fixed 3.14 2.88 +0.26
1 Yr ARM 2.68 2.67 +0.01
5/1 Yr ARM 3.07 2.88 +0.19
FHFA updated monthly
15 Yr Fixed 3.05 3.08 -0.03
30 Yr Fixed 3.74 3.80 -0.06
30 Year Fixed

 

About These Rates Get This Widget

by Bill McBride on 11/18/2016 05:59:00 PM

Stock market, trading journal, daily journal, investing journal

My Trading Journal: 30 Day Trading Journal

Published at Fri, 18 Nov 2016 22:59:00 +0000

Continue reading >
Share

FNC: Residential Property Values increased 6.0% year-over-year in September

home-1353389_1280by image4you from pixabay

FNC: Residential Property Values increased 6.0% year-over-year in September

by Bill McBride on 11/15/2016 05:20:00 PM

 In addition to Case-Shiller, and CoreLogic, I’m also watching the FNC, Zillow and several other house price indexes.

FNC released their September 2016 index data.  FNC reported that their Residential Price Index™ (RPI) indicates that U.S. residential property values increased 0.4% from August to September (Composite 100 index, not seasonally adjusted).

The 10 city MSA increased 0.4% (NSA), the 20-MSA RPI increased 0.5%, and the 30-MSA RPI also increased 0.5% in September. These indexes are not seasonally adjusted (NSA), and are for non-distressed home sales (excluding foreclosure auction sales, REO sales, and short sales).

Notes: In addition to the composite indexes, FNC presents price indexes for 30 MSAs. FNC also provides seasonally adjusted data.

The index is still down 9.2% from the peak in 2006 (not inflation adjusted).

Click on graph for larger image.

This graph shows the year-over-year change based on the FNC index (four composites) through September 2016. The FNC indexes are hedonic price indexes using a blend of sold homes and real-time appraisals.

Most of the other indexes are also showing the year-over-year change in the mid single digit range.

Note: The September Case-Shiller index will be released on Tuesday, November 29th.

Read more at http://www.calculatedriskblog.com/2016/11/fnc-residential-property-values.html#Wjjzl1U721Afgjeq.99

by Bill McBride on 11/15/2016 05:20:00 PM
Published at Tue, 15 Nov 2016 22:20:00 +0000

Continue reading >
Share

Mortgage Rates and Ten Year Yield, Expect 4% Mortgage Rates

abode-987096_1280
abode-987096_1280By Merio from Pixabay

Mortgage Rates and Ten Year Yield, Expect 4% Mortgage Rates

by Bill McBride on 11/14/2016 11:03:00 AM

Rates are rising with the expectation of much larger deficits next year (tax cuts combined with more spending).
With the ten year yield rising to 2.25% today, and based on an historical relationship, 30-year rates should currently be around 4.1%.

As of this morning, Mortgage News Daily reports that 30 year fixed rate mortgages are around 4%. Pretty close to expected.

The graph shows the relationship between the monthly 10 year Treasury Yield and 30 year mortgage rates from the Freddie Mac survey.

Mortgage rates and 10 year Treasury Yield

Currently the 10 year Treasury yield is at 2.25%, and 30 year mortgage rates were at 3.57% according to the Freddie Mac survey last week.

So expect mortgage rates to rise this week to around 4%.

Also, we should see a sharp drop in refinance activity.

Currently I don’t think this increase in rates will have a significant impact on the housing market.

by Bill McBride on 11/14/2016 11:03:00 AM

Stock market, trading journal, daily journal, investing journal

My Trading Journal: 30 Day Trading Journal

Published at Mon, 14 Nov 2016 16:03:00 +0000

Continue reading >
Share

Thursday: Unemployment Claims

digital-marketing-1433427_1280

by WDnetStudio at pixabay

Thursday: Unemployment Claims

 

by Bill McBride on 11/09/2016 07:16:00 PM

 From Matthew Graham at Mortgage News Daily: Worst Day For Mortgage Rates in Over 3 Years

Mortgage Rates skyrocketed today, relative to their average range of movement. It was the single biggest move higher since the days of the taper tantrum in mid-2013. Virtually all lenders are quoting conventional 30yr fixed rates that are at least an eighth of a point higher versus yesterday. Over the past decade, you can count single-day eighth-point moves without using any toes. Some lenders were a quarter point higher, which has only happened a few times, ever.
emphasis added

Thursday:
• 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for 263 thousand initial claims, down from 265 thousand the previous week.

by Bill McBride on 11/09/2016 07:16:00 PM

Stock market, trading journal, daily journal, investing journal

My Trading Journal: 30 Day Trading Journal

Published at Thu, 10 Nov 2016 00:16:00 +0000

Continue reading >
Share

Black Knight September Mortgage Monitor

3jkl6i.jpg

Black Knight September Mortgage Monitor

by Bill McBride on 11/07/2016 08:29:00 AM

 Black Knight Financial Services (BKFS) released their Mortgage Monitor report for September today. According to BKFS, 4.27% of mortgages were delinquent in September, down from 4.87% in September 2015. BKFS also reported that 1.00% of mortgages were in the foreclosure process, down from 1.46% a year ago.

This gives a total of 5.27% delinquent or in foreclosure.

Press Release: Black Knight’s Mortgage Monitor: ‘Balancing Act’ of Low Rates, Rising Home Prices is Keeping Affordability Stable for Now; Raising Conforming Loan Limits Could Increase Origination Volumes

Today, the Data & Analytics division of Black Knight Financial Services, Inc. released its latest Mortgage Monitor Report, based on data as of the end of September 2016. This month, in light of 52 consecutive months of annual home price appreciation (HPA) and discussion in many quarters around the possibility of raising conforming loan limits, Black Knight took a closer look at HPA trends, home affordability and the impact that raising those limits might have on mortgage originations. …

“The Housing and Economic Recovery Act (HERA) of 2008 restricted any additional increases in the conforming loan limit until national home values returned to pre-crisis levels. Now that we’ve reached that point by multiple measures, the GSEs can consider raising the national conforming limit above the static $417,000 where it has stayed for the last 10 years – aside from the 234 designated ‘high-cost’ counties, of course. Our analysis shows that there are approximately 17 times as many originations – roughly 100,000 in total over the past 12 months – right at the conforming limit compared to preceding dollar amount buckets, and that originations drop off by about 70 percent immediately above the limit. In addition, the data shows that a GSE loan originated right at the conforming limit is nine times more likely to carry a second lien than one that is not. One example scenario shows that, with all else being equal, raising the conforming loan limit by $10,000 could result in a one percent increase in originations – approximately 40,000 new loans and $20 billion in new loan balances.”
emphasis added

 

BKFSClick on graph for larger image.

This graph from Black Knight shows the Black Knight HPI.

From Black Knight:

• As of August, we’ve seen 52 consecutive months of year-over-year home price appreciation (HPA)

• The national level HPI is now $266K, the highest median home value seen since 2006 and just 0.7 percent off of the June 2006 peak of $268K

• Annual HPA was 5.3 percent in August, and has remained relatively stable in that range over the last 12 months

• The current rate of annual HPA is above the 19921996 average growth of 2.8 percent, but well below what was seen from 19982005

• Housing supply remains low by historical standards; as of August, there was a 4.6-month supply of homes for sale, down from 5.5, 5.5 and 5.2 months the last three years

Even though nominal prices are close to the previous high in the Black Knight index, real prices (adjusted for inflation) are still around 20% below the price peak in June 2006.

There is much more in the mortgage monitor.

Read more at http://www.calculatedriskblog.com/2016/11/black-knight-september-mortgage-monitor.html#iP2rWzRDlLE2O6ul.99

by Bill McBride on 11/07/2016 08:29:00 AM

Stock market, trading journal, daily journal, investing journal

My Trading Journal: 30 Day Trading Journal

Published at Mon, 07 Nov 2016 13:29:00 +0000

Continue reading >
Share

Fannie Mae: Mortgage Serious Delinquency rate unchanged in September

Photo
tags
By Peggy_Marco from Pixabay

Fannie Mae: Mortgage Serious Delinquency rate unchanged in September

by Bill McBride on 10/28/2016 05:04:00 PM

 Fannie Mae reported today that the Single-Family Serious Delinquency rate was at 1.24% in September, unchanged from 1.24% in August. The serious delinquency rate is down from 1.59% in September 2015.
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 generally 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% for about 8 more months.

Note: Freddie Mac reported yesterday.

Read more at http://www.calculatedriskblog.com/2016/10/fannie-mae-mortgage-serious-delinquency.html#vq3tLUIOtlPtLoyA.99

by Bill McBride on 10/28/2016 05:04:00 PM

Get The #1 Daily Trading Journal: TTW 30 Day: My Trading Journal
Published at Fri, 28 Oct 2016 21:04:00 +0000

Continue reading >
Share

Zillow Forecast: Expect “Modest Acceleration” in YoY Growth in September for the Case-Shiller Indexes

Photo

https://pixabay.com/en/users/Peggy_Marco-1553824/

https://pixabay.com/en/users/Peggy_Marco-1553824/

By Peggy_Marco from Pixabay

Zillow Forecast: Expect “Modest Acceleration” in YoY Growth in September for the Case-Shiller Indexes

by Bill McBride on 10/26/2016 01:31:00 PM

 The Case-Shiller house price indexes for August were released yesterday. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close.
From Zillow: September Case-Shiller Forecast: Modest Acceleration in Home Price Growth Will Continue

According to Zillow’s September Case-Shiller forecast, the national index and both smaller 10 and 20-city indices look set to continue the acceleration in home price growth they exhibited in August. And after more than two years of steady growth around 5 percent annually, the U.S. National Case-Shiller home price index is within striking distance of reaching its July 2006 peak levels, just 0.1 percent off those levels, according to today’s data.

The September Case-Shiller National Index is expected to grow 5.4 percent year-over-year and 0.7 percent month-to-month (seasonally adjusted). We expect the 10-City Index to grow 4.3 percent year-over-year and 0.3 percent (SA) from July. The 20-City Index is expected to grow 5.1 percent between September 2015 and September 2016, and rise 0.4 percent (SA) from August.

Zillow’s September Case-Shiller forecast is shown in the table below. These forecasts are based on today’s August Case-Shiller data release and the September 2016 Zillow Home Value Index (ZHVI). The September S&P CoreLogic Case-Shiller Indices will not be officially released until Tuesday, November 29.

The year-over-year change for the 10-city and 20-city indexes will probably be about the same in the September report as in the August report.  The change for the National index will probably be slightly higher.
Zillow forecast for Case-Shiller

Read more at http://www.calculatedriskblog.com/2016/10/zillow-forecast-expect-modest.html#K5KG45zeKLVaEIhE.99

by Bill McBride on 10/26/2016 01:31:00 PM

Get The #1 Daily Trading Journal: TTW 30 Day: My Trading Journal

Let’s block ads! (Why?)
Published at Wed, 26 Oct 2016 17:31:00 +0000

Continue reading >
Share

Lawler: Table of Distressed Sales and All Cash Sales for Selected Cities in September

Photo

new-home-1664317_640Lawler: Table of Distressed Sales and All Cash Sales for Selected Cities in September

by Bill McBride on 10/24/2016 04:29:00 PM

 Economist Tom Lawler sent me the table below of short sales, foreclosures and all cash sales for selected cities in September.
On distressed: Total “distressed” share is down year-over-year in most of these markets.

Short sales and foreclosures are down in most of these areas.

The All Cash Share (last two columns) is mostly declining year-over-year. As investors continue to pull back, the share of all cash buyers continues to decline.

Short Sales Share Foreclosure Sales Share Total “Distressed” Share All Cash Share
Sep-
2016
Sep-
2015
Sep-
2016
Sep-
2015
Sep-
2016
Sep-
2015
Sep-
2016
Sep-
2015
Las Vegas 4.6% 6.8% 6.0% 7.1% 10.6% 13.9% 26.5% 26.8%
Reno** 3.0% 3.0% 2.0% 3.0% 5.0% 6.0%
Phoenix 1.7% 2.4% 2.0% 3.5% 3.7% 5.9% 20.2% 23.1%
Sacramento 1.4% 2.9% 3.1% 4.1% 4.5% 6.9% 16.3% 17.6%
Minneapolis 1.1% 1.9% 4.3% 6.6% 5.4% 8.5% 12.8% 12.5%
Mid-Atlantic 3.1% 3.9% 8.9% 11.1% 11.9% 14.9% 16.5% 17.5%
Florida SF 2.3% 3.5% 7.8% 16.0% 10.1% 19.4% 28.0% 34.1%
Florida C/TH 1.6% 2.1% 7.0% 14.3% 8.6% 16.4% 55.8% 59.7%
Miami MSA SF 3.3% 5.1% 9.4% 18.6% 12.7% 23.7% 28.5% 33.2%
Miami MSA CTH 2.7% 2.7% 9.5% 18.0% 12.1% 20.7% 58.1% 63.0%
Chicago (city) 12.1% 17.5%
Spokane 7.8% 7.8%
Northeast Florida 12.9% 23.4%
Orlando 31.3% 35.5%
Toledo 28.0% 26.5%
Tucson 22.2% 25.9%
Peoria 20.5% 22.3%
Georgia*** 20.8% 22.3%
Omaha 15.5% 18.1%
Pensacola 29.1% 31.4%
Rhode Island 11.1% 9.0%
Richmond VA 8.7% 10.5% 18.4% 15.2%
Memphis 8.8% 13.1%
Springfield IL** 9.7% 10.3%
*share of existing home sales, based on property records
**Single Family Only
***GAMLS

Read more at http://www.calculatedriskblog.com/2016/10/lawler-table-of-distressed-sales-and.html#8WSrR0uwCfBGbPMj.99

Get The #1 Daily Trading Journal: TTW 30 Day: My Trading Journal

Let’s block ads! (Why?)
Published at Mon, 24 Oct 2016 20:29:00 +0000

Continue reading >
Share

Fannie Mae streamlines U.S. mortgage underwriting

 

Fannie Mae headquarters is seen in Washington November 7, 2013.REUTERS/Gary Cameron

Fannie Mae said on Monday it has launched a program to streamline its underwriting on mortgages for some borrowers that uses electronic data instead of physical proof of their income, assets and employment.

The U.S. government mortgage agency said the “Day 1 Certainty” program would also offer relief from representation and warranty for the appraised value of a home and a waiver of its property inspection requirement for many mortgage refinancings.

“Together, these innovations deliver greater speed, simplicity, and certainty to lenders and borrowers. They also bring stronger risk management and promote greater digitization of data and processes to the mortgage industry,” said Timothy Mayopoulos, Fannie Mae’s president and chief executive officer, in a statement.

These program features will be available on Dec. 10, Fannie Mae said.

Fannie Mae and Freddie Mac finance mortgages made by lenders by owning them and guaranteeing the bonds backed by these loans.

(Reporting by Richard Leong; Editing by Meredith Mazzilli)

Get The #1 Daily Trading Journal: TTW 30 Day: My Trading Journal

Let’s block ads! (Why?)
Published at Mon, 24 Oct 2016 15:36:10 +0000

Continue reading >
Share

Schedule for Week of Oct 23, 2016

 

 

https://pixabay.com/en/users/geralt-9301/photo by geralt from pixabay

Schedule for Week of Oct 23, 2016

by Bill McBride on 10/22/2016 08:01:00 AM

The key economic reports this week are the advance estimate of Q3 GDP and September New Home Sales.

Also the Case-Shiller House Price Index for August will be released.

For manufacturing, the October Richmond and Kansas City Fed manufacturing surveys will be released this week.

—– Monday, Oct 24th —–

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

—– Tuesday, Oct 25th —–

9:00 AM: FHFA House Price Index for August 2016. This was originally a GSE only repeat sales, however there is also an expanded index.  The consensus is for a 0.5% month-to-month increase for this index.
Case-Shiller House Prices Indices

9:00 AM ET: S&P/Case-Shiller House Price Index for August. Although this is the August report, it is really a 3 month average of June, July and August prices.

This graph shows the nominal seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the July 2016 report (the Composite 20 was started in January 2000).

The consensus is for a 5.1% year-over-year increase in the Comp 20 index for August. The Zillow forecast is for the National Index to increase 5.2% year-over-year in August.

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

—– Wednesday, Oct 26th —–

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

10:00 AM ET: New Home Sales for September from the Census Bureau.

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

The consensus is for an decrease in sales to 600 thousand Seasonally Adjusted Annual Rate (SAAR) in September from 609 thousand in August.

—– Thursday, Oct 27th —–

8:30 AM ET: The initial weekly unemployment claims report will be released.  The consensus is for 255 thousand initial claims, down from 260 thousand the previous week.  Note: I expect some further impact on claims due to Hurricane Matthew.

8:30 AM: Durable Goods Orders for September from the Census Bureau. The consensus is for a 0.2% increase in durable goods orders.

10:00 AM: Pending Home Sales Index for September. The consensus is for a 1.0% increase in the index.

10:00 AM: the Q3 Housing Vacancies and Homeownership from the Census Bureau.

11:00 AM: Kansas City Fed Survey of Manufacturing Activity for October.

—– Friday, Oct 28th —–

8:30 AM ET: Gross Domestic Product, 3rd quarter 2016 (Advance estimate). The consensus is that real GDP increased 2.5% annualized in Q3.

10:00 AM: University of Michigan’s Consumer sentiment index (final for October). The consensus is for a reading of 88.5, up from the preliminary reading 87.9.

Read more at http://www.calculatedriskblog.com/2016/10/schedule-for-week-of-oct-23-2016.html#veu3G2t8x5w4rVoE.99

by Bill McBride on 10/22/2016 08:01:00 AM

Get The #1 Daily Trading Journal: TTW 30 Day: My Trading Journal

Let’s block ads! (Why?)
Published at Sat, 22 Oct 2016 12:01:00 +0000

Continue reading >
Share

A Few Comments on September Existing Home Sales

Photo
https://pixabay.com/en/users/Peggy_Marco-1553824/By Peggy_Marco from Pixabay

 

A Few Comments on September Existing Home Sales

by Bill McBride on 10/20/2016 12:12:00 PM

 Earlier: Existing Home Sales increased in September to 5.47 million SAAR
Inventory remains a key issue. Here is a repeat of two paragraphs I wrote about inventory a few months ago:

I expected some increase in inventory last year, but that didn’t happened.  Inventory is still very low and falling year-over-year (down 6.8% year-over-year in September). More inventory would probably mean smaller price increases and slightly higher sales, and less inventory means lower sales and somewhat larger price increases.

Two of the key reasons inventory is low: 1) A large number of single family home and condos were converted to rental units. Last year, housing economist Tom Lawler estimated there were 17.5 million renter occupied single family homes in the U.S., up from 10.7 million in 2000. Many of these houses were purchased by investors, and rents have increased substantially, and the investors are not selling (even though prices have increased too). Most of these rental conversions were at the lower end, and that is limiting the supply for first time buyers. 2) Baby boomers are aging in place (people tend to downsize when they are 75 or 80, in another 10 to 20 years for the boomers). Instead we are seeing a surge in home improvement spending, and this is also limiting supply.

Of course low inventory keeps potential move-up buyers from selling too.  If someone looks around for another home, and inventory is lean, they may decide to just stay and upgrade.

A key point: Some areas are seeing more inventory.   For example, there is more inventory in some coastal areas of California, in New York city and for high rise condos in Miami.

I’d consider any existing home sales rate in the 5 to 5.5 million range solid based on the normal historical turnover of the existing stock. As always, it is important to remember that new home sales are more important for jobs and the economy than existing home sales. Since existing sales are existing stock, the only direct contribution to GDP is the broker’s commission. There is usually some additional spending with an existing home purchase – new furniture, etc – but overall the economic impact is small compared to a new home sale.

The following graph shows existing home sales Not Seasonally Adjusted (NSA).

Existing Home Sales NSAClick on graph for larger image.

Sales NSA in September (red column) were the highest for September since 2006 (NSA).

Note that sales NSA are in the slower Fall period, and will really slow seasonally in January and February.

Read more at http://www.calculatedriskblog.com/2016/10/a-few-comments-on-september-existing.html#pCKAp3Ups7bXhpTA.99

by Bill McBride on 10/20/2016 12:12:00 PM

Let’s block ads! (Why?)
Published at Thu, 20 Oct 2016 16:12:00 +0000

Continue reading >
Share

NMHC: Apartment Market Tightness Index remained negative in October Survey

NMHC: Apartment Market Tightness Index remained negative in October Survey

by Bill McBride on 10/20/2016 03:39:00 PM

From the National Multifamily Housing Council (NMHC): Apartment Markets Retreat in the October NMHC Quarterly Survey

Apartment markets softened across all four indexes in the October 2016 National Multifamily Housing Council (NMHC) Quarterly Survey of Apartment Market Conditions. The Market Tightness (28), Sales Volume (42), Equity Financing (33) and Debt Financing (38) Indexes all landed below the breakeven level of 50 – showing weaker conditions from the previous quarter.

The growing supply of new apartments, primarily in the Class A space, appears to have finally reached a level to slow the historically high rent growth. Additionally, debt and equity markets are more discerning in terms of what deals they are ready to take on, including the continued slowing of available construction loans,”  said Mark Obrinsky, NMHC’s Senior Vice President of Research and Chief Economist. “Despite the softening due to the new development focus on Class A apartments, the overall fundamentals for apartments remain stable, indicated by the strong demand for Class B and C properties.”

The Market Tightness Index fell to 28, the lowest since July 2009 and the fourth quarter in a row showing declining conditions. Almost half of respondents (49 percent) reported looser conditions than three months ago. Likewise, only six percent noted tighter conditions. The remaining 45 percent reported no change at all.
emphasis added

Apartment Tightness Index
Click on graph for larger image.

This graph shows the quarterly Apartment Tightness Index. Any reading below 50 indicates looser conditions from the previous quarter. This indicates market conditions were looser over the last quarter.

As I’ve mentioned before, this index helped me call the bottom for effective rents (and the top for the vacancy rate) early in 2010.

This is the fourth consecutive quarterly survey indicating looser conditions – it appears supply has caught up with demand – and I expect rent growth to slow (the vacancy rate is generally creeping up too).

Read more at http://www.calculatedriskblog.com/2016/10/nmhc-apartment-market-tightness-index.html#fBPhaF0cbpQZ8j1F.99

by Bill McBride on 10/20/2016 03:39:00 PM

Let’s block ads! (Why?)
Published at Thu, 20 Oct 2016 19:39:00 +0000

Continue reading >
Share

Existing Home Sales increased in September to 5.47 million SAAR

https://pixabay.com/en/users/Merio-1480566/

Photo by Merio at Pixabay

Existing Home Sales increased in September to 5.47 million SAAR

by Bill McBride on 10/20/2016 10:12:00 AM

From the NAR: First-time Buyers Steer Existing-Home Sales Higher in September

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, hiked 3.2 percent to a seasonally adjusted annual rate of 5.47 million in September from a downwardly revised 5.30 million in August. After last month’s gain, sales are at their highest pace since June (5.57 million) and are 0.6 percent above a year ago (5.44 million)….

Total housing inventory at the end of September rose 1.5 percent to 2.04 million existing homes available for sale, but is still 6.8 percent lower than a year ago (2.19 million) and has now fallen year-over-year for 16 straight months. Unsold inventory is at a 4.5-month supply at the current sales pace, which is down from 4.6 months in August.

Existing Home SalesClick on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in September (5.47 million SAAR) were 3.2% higher than last month, and were 0.6% above the September 2015 rate.

The second graph shows nationwide inventory for existing homes.
Existing Home InventoryAccording to the NAR, inventory increased to 2.04 million in September from 2.01 million in August.   Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

The third graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory
Year-over-year InventoryInventory decreased 6.8% year-over-year in September compared to September 2015.

Months of supply was at 4.5 months in September.

This was above consensus expectations. For existing home sales, a key number is inventory – and inventory is still low. I’ll have more later …

Read more at http://www.calculatedriskblog.com/2016/10/existing-home-sales-increased-in.html#yaOZEHEwpwOm4DdY.99

by Bill McBride on 10/20/2016 10:12:00 AM

Let’s block ads! (Why?)
Published at Thu, 20 Oct 2016 14:12:00 +0000

Continue reading >
Share

AIA: Architecture Billings Index declines in September

AIA: Architecture Billings Index declines in September

by Bill McBride on 10/19/2016 12:11:00 PM

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

From the AIA: Further Contraction in Architecture Billings Index

For the first time since the summer of 2012, the Architecture Billings Index (ABI) posted consecutive months of a decline in demand for design services. 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 September ABI score was 48.4, down from the mark of 49.7 in the previous month. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.4, down from a reading of 61.8 the previous month.

“This recent backslide should act as a warning signal,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “But this drop-off in demand could be continued hesitancy in the marketplace to move forward on projects until the presidential election is decided. The fact that new work coming into architecture continues to slowly increase suggests that billings will resume their growth in the coming months”

• Regional averages: South (53.4), Midwest (50.1), West (49.5), Northeast (44.0)

• Sector index breakdown:commercial/industrial (50.4), mixed practice (49.8), institutional (49.0), multi-family residential (48.8)
emphasis added

AIA Architecture Billing IndexClick on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 48.4 in September, down from 49.7 in August. Anything below 50 indicates contraction 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 8 of the last 12 months, suggesting a further increase in CRE investment through mid-2017.  However if this drop-off continues, CRE investment could slow in the 2nd half of 2017.

Read more at http://www.calculatedriskblog.com/2016/10/aia-architecture-billings-index.html#BjYpwt7obmLkpeMG.99

by Bill McBride on 10/19/2016 12:11:00 PM

Let’s block ads! (Why?)
Published at Wed, 19 Oct 2016 16:11:00 +0000

Continue reading >
Share
Page 3 of 4