Mortgage Rate News
Home prices, including sales of distressed properties, continued to appreciate on both an annual and a monthly basis in January. CoreLogic said that its Home Price Index including sales of foreclosed property and short sales, increased 5.7 percent in January compared to one year earlier. On a monthly basis the increase was 1.1 percent.
Including distressed sales, only Maryland and Connecticut showed negative home price appreciation at -0.3 percent and -1.9 percent respectively. The five states with the highest home price appreciation were Colorado (9.1 percent), Michigan (9.0 percent), Texas and Wyoming (8.3 percent each), and Nevada (7.6 percent.)
The multifamily market outperformedmany predictions in 2014; vacancy levels, despite a flood of new properties, declined by 10 basis points from 2013 to a 13-year low of 4.2 percent. Revenue per unit rose, continuing the pattern that has led to a 20 percent increase over the last five years.
Freddie Mac's economists are predictingthat, while easing a bit from 2014, this year will be another strong one for the sector. Its 2015 Multifamily Outlook projects that demand, driven by the millennial generation, will remain strong but construction of units in buildings with five or more will continue to trend upward so vacancies will rise.
Supply, they say, could actually outpace demand this year and the vacancy rate will probably riseby 60 basis points to 4.8 percent by year-end. This however is still below the historic average of 5.4 percent. This negative is tempered by an unknown; how much pend-up demand will be unleashed as households form that would have been formed earlier were it not for the recession.
The Federal Housing Finance Agency (FHFA), conservator of Fannie Mae and Freddie Mac (the GSEs), released guidelines for their sales of non-performing mortgage loans. FHFA earlier approved sales as a mechanism to reduce the investment portfolios of the two enterprises and to transfer some of the risk of their delinquent loans to the private sector. FHFA said it believes that the sale of severely delinquent loans through non-performing loan (NPL) sales will both reduce GSE losses and improve borrower and neighborhood outcomes.
Bulk sales of delinquent debt is done on a substantially discounted basis and in the case of secured debt investors generally bid on the basis of the value of the underlying collateral. With rising home prices the attractiveness of such debt has increased as has demand for it and there has been concern that investors will fast-track foreclosures once they own the debt....(read more)
Both publicly and privately funded construction dipped slightly in January from February levels the Census Bureau said today, although both total construction and the publicly funded segment did remain above January 2014 levels. Construction put in place in all categories during the month was at a seasonally adjusted annual rate of $971.4 billion, 1.1 percent lower than the estimated $982.0 billion spent in December. The number was 1.8 percent higher than the January 2014 estimate of $954.6 billion.
On a non-seasonally adjusted basis spending in January was estimated at $67.3 billion compared to 76.0 billion in December and 66.5 billion a year earlier. This was an annual increase of 1.2 percent.
While its ultimate focus is the future of the construction equipment business, Wells Fargo's Equipment Finance division has some predictions for residential construction as well. The company's 2015 Construction Industry Forecast, presents results of a survey it has conducted for the last 19 years of industry executives representing large and small contractors as well as equipment distributorships and equipment rental companies.
Wells Fargo's survey attempts to track industry optimismusing what it calls the Optimism Quotient (OQ). John Crum, National Sales Manager for the Equipment Finance Construction Group said that, after tumbling to an all-time low of 42 in January 2009, the OQ has climbed steadily, reaching new highs in three of the last four years and landing this year at 130, up six points from 2014.
Even though sales of existing homes dropped by 4.9 percent in January buyers were apparently out shopping and seriously so. The National Association of Realtors® said that its Pending Home Sales Index (PHSI) climbed to 104.2 in January, a 1.7 percent increase from December and the highest level for the index since August 2013.
The January PHSI was 8.4 percent higher than the one for January 2014. It was the fifth consecutive month of year-over-year gains and NAR said that each month has accelerated the annual gain from the prior month. In addition the December number was revised upward from 100.7 to 102.5, erasing about half of the previously reported 3.7 percent November to December loss.
The Federal Housing Administration (FHA) saw its share of the mortgage market soar to 72 percent of all mortgages issued in 2008 as other lenders pulled back and FHA moved into one of the two roles it was designed to fill, as a counterforce providing access to credit when the private sector pulls back, typically because of economic stress. Since then that share has steadily declined and FHA is back down to around 15-17 percent.
In a recent entry in the National Association of Realtor's® Economist Commentaries, Ken Fears, NAR's Director of Regional Economics and Housing Finance, says that with the recent changes in FHA's insurance premiums it is worth reviewing the agency's impact on the market. First, he says, unit volume as above is only one way to measure FHA's market share. It can be viewed as a share of:
The Federal Housing Finance Agency (FHFA) said today that home prices in the fourth quarter of 2014 were up 1.4 percent compared to the previous quarter and 4.9 percent from the fourth quarter of 2013. The fourth quarter was the fourteenth consecutive one in which the agency's purchase only House Price Index (HPI) increased on a seasonally adjusted basis from the prior quarter.
The monthly HPI for December, also reported today, was up 0.8 percent from November. This measure has increased for 23 of the last 24 months with the single decreased registered in November 2013
FHFA's index is calculated using home sales price information from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac. An expanded data index using transaction information from county recorders' offices and the FHA was up 1.3 percent quarter-over-quarter and was 6.0 percent higher than in the fourth quarter of 2013.
Freddie Mac said on Wednesday that its Multi-Indicator Market Index (MiMi) still shows that, at the national level, housing is continuing to stabilize. Thirty-eight of the 50 states plus the District of Columbia are now showing an improving three-month trend as are 40 of the 50 largest metro areas. However, at the same time last year, 47 states plus the District of Columbia, and 47 of the top 50 metro areas were showing an improving three month trend.
MiMi monitors and measures the 50 state and 50 metro areas by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of on-time mortgage payments in each market, and the local employment picture. From this the company creates a composite MiMi value for each market to show, at a glance, where each stands relative to its own stable range of housing activity and whether it is moving closer to, or further away from, its stable range. A market can fall outside its stable range by being too weak to generate enough demand for a well-balanced housing market or by overheating to an unsustainable level of activity.
The Home Price Index (HPI) report issued this week by Black Knight Financial Services shows the December national index at $241,000, a -0.1 percent change from November. The HPI has increased by 4.6 percent since December 2013, and is now 10.2 percent below the peak of $268,000 it stablished in June 2006.
The largest monthly increaseswere in New York and Colorado, each of which saw its HPI increase by 0.5 percent. Colorado has been establishing new price peaks regularly for over a year and the December increase brought New York to within 0.6 of its pre-crisis high. These two were followed by Oregon, Florida, Oklahoma, and Arizona, each with gains of 0.3 percent....(read more)
Black Knight Financial Services has released a "first look" at its month-end January mortgage performance statistics. The company regularly previews data that is covered in a more comprehensive form in its Mortgage Monitor scheduled for publication on March 9.
The number of properties for which mortgages are 30 days past due but not yet in foreclosure declined by 50,000in January to 2.81 million. The 30-day delinquency rate was down 11 percent from a year earlier to 5.56 percent of all homes in the U.S. with a mortgage. Serious delinquencies, i.e. properties that are 90 or more days past due but not in foreclosure, declined by 20,000 from December and 177,000 from a year earlier to 1.11 million
Sales of newly constructed single-family homes dipped only slightly in January from December levels. The U.S. Census Bureau and Department of Housing and Urban Developing said today that January sales were at a seasonally adjusted annual rate of 481,000. That rate was 0.2 percent below the slightly revised December estimate of 482,000 units. The original December number, also 481,000, had represented an 11.6 percent surge from November.
January's rate of new home sales was 5.3 percent above those in the same month in 2014 which were estimated at 457,000 units. On a non-seasonally adjusted basis there were an estimated 36,000 new homes sold in January compared to 34,000 in December and 33,000 a year earlier....(read more)
Mortgage applications declined again during the week ended February 20. The Mortgage Bankers Association (MBA) said that its Market Composite Index, a measure of application volume, was down 3.5 percent on a seasonally adjusted basis from the week ended February 13. There was also an adjustment to the data to account for the Presidents' Day Holiday which fell during the week. On a non-adjusted basis the volume was down 12 percent from the previous week.
Refinancing activity continued to retreat. The Refinance Index decreased 8 percent from the previous week and the refinancing share of applications fell from 66 percent to 62 percent, the fourth decline in five weeks....(read more)
Despite increases in 2014 that were twice that of inflation, house prices are "faltering." The S&P/Case-Shiller composite city indices for December were nearly flat while the National index was slightly negative.
Both the 10-City and 20-City Composite indices posted year-over-year increases in December compared to those increases in November. The 10-City had an annual gain of 4.3 percent compared to 4.2 percent in November, the 20-city was up 4.5 percent compared to 4.3 percent the previous month. The National Home Price Index (HPI) had an annual gain of 4.6 percent against 4.7 percent in November.
There appears to be a battlein the making between Realtor.com, which has provided on-line nationwide residential listing information since the Internet was only a novelty and upstarts Zillow and Trulia. Both companies have made their own radical changes in the last six months with Realtor.com operator Move Inc. being sold and Trulia merging into Zillow.
Realtor.com's relationship with the National Association of Realtors has always been a bit opaque. Starting in the mid-1990s Move Inc., then called RealSelect but operating principally as Homestore (remember those glass boxes with home listings scattered through airport concourses?) began managing listings of Realtors nationwide....(read more)