Monthly Archives: February 2016

Home Sales Finish Year Up | Waccabuc Real Estate

New homes sales were up 10.8% in December to 544,000 on a seasonally-adjusted annual basis (SAAR) and finished 2015 just past half million (501,000) for the best year since 2007. The increase in signed contracts to purchase a new home comes as mortgage rates remain very low by historic standards and the US economy continues to gain strength.
Sales were up in every census region although nominally in the South by 0.4%, to 273,000. In other regions, the Northeast was up 21% to 29,000 (SAAR), the Midwest up 32% to 75,000 and the West up 21% to 167,000. For the year, the Northeast was down 12% to 24,000 new homes sales, which is the worse year since 2011. Other regions performed much better with the Midwest up 3.2% to 60,000, the best year since 2008; the South was up 17.6% to 285,000, the best year since 2007; and the West was up 20.5% to 130,000, the best year since 2007.

New Home Sales

Inventories continue to build even in the face of labor and lot shortages. December’s unsold inventory increased 2.6 to 237,000, the highest since October 2009. Even with the increase in sales, the months’ supply fell to 5.2 months.
The median sales price fell 4.3% to $288,900 due primarily to a decline in sales over $750,000 and an increase in sales between $200,000 and $300,000. The trend suggests more first time home buyers are entering the market.
The shares of signed contracts that are still under construction or not yet started have climbed back to near the same levels has the early 2000s as builders switch from selling off left over inventory to selling from the stock of homes under construction or planned but not yet started.

Stage of Construction for New Homes Sold

 

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US New Home Sales at 10-Month High | Cross River Real Estate

New Home Sales in the United States is expected to be 526.44 Thousand by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate New Home Sales in the United States to stand at 539.95 in 12 months time. In the long-term, the United States New Home Sales is projected to trend around 589.69 Thousand in 2020, according to our econometric models.

United States New Home Sales

 

ForecastActualQ1/16Q2/16Q3/16Q4/162020Unit
New Home Sales544526533536540590Thousand
United States New Home Sales Forecasts are projected using an autoregressive integrated moving average (ARIMA) model calibrated using our analysts expectations. We model the past behaviour of United States New Home Sales using vast amounts of historical data and we adjust the coefficients of the econometric model by taking into account our analysts assessments and future expectations. The forecast for – United States New Home Sales – was last predicted on Wednesday, January 27, 2016.
United States HousingLastQ1/16Q2/16Q3/16Q4/162020
Building Permits123212451249125412591310
Housing Starts114911651173118211921288
New Home Sales544526533536540590
Pending Home Sales2.71.991.71.541.451.33
Existing Home Sales546055465402539653785115
Construction Spending-0.40.220.270.290.30.31
Housing Index0.50.480.440.430.420.31
Nahb Housing Market Index6059.2758.9758.4858.0153.23
Mortgage Rate4.024.64.95.14.196.5
Mortgage Applications8.80.980.480.480.480.48
Home Ownership Rate63.763.763.763.763.763.7
Case Shiller Home Price Index183183182181180160

 

 

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http://www.tradingeconomics.com/united-states/new-home-sales

Mortgage rates average 3.65% | Armonk Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates unchanged from the previous week and remaining near their 2015 lows.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.65 percent with an average 0.5 point for the week ending February 18, 2016, unchanged from last week. A year ago at this time, the 30-year FRM averaged 3.76 percent.
  • 15-year FRM this week averaged 2.95 percent with an average 0.5 point, unchanged from last week. A year ago at this time, the 15-year FRM averaged 3.05 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.85 percent this week with an average 0.4 point, up from last week when it averaged 2.83 percent. A year ago, the 5-year ARM averaged 2.97 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for theDefinitions. Borrowers may still pay closing costs which are not included in the survey.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“After another week of financial market oscillations driven by rumors of potential limits on oil production, the 10-year Treasury yield edged up 5 basis points, and the 30-year mortgage rate remained unchanged at 3.65 percent. Despite this week’s uptick in Treasury yields, the 10-year is still 54 basis points lower than it stood at the end of 2015, while the mortgage rate has dropped only 36 basis points over the same period.”

 

 

 

Case-Shiller Home Price Index rises | Katonah Real Estate

United States S&P Case-Shiller Home Price Index  Forecast 2016-2020

Case Shiller Home Price Index in the United States is expected to be 182.91 Index Points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Case Shiller Home Price Index in the United States to stand at 179.90 in 12 months time. In the long-term, the United States S&P Case-Shiller Home Price Index is projected to trend around 160.18 Index Points in 2020, according to our econometric models.

United States S&P Case-Shiller Home Price Index
United States S&P Case-Shiller Home Price Index Forecasts are projected using an autoregressive integrated moving average (ARIMA) model calibrated using our analysts expectations. We model the past behaviour of United States S&P Case-Shiller Home Price Index using vast amounts of historical data and we adjust the coefficients of the econometric model by taking into account our analysts assessments and future expectations. The forecast for – United States S&P Case-Shiller Home Price Index – was last predicted on Tuesday, January 26, 2016.
United States HousingLastQ1/16Q2/16Q3/16Q4/162020
Building Permits123212451249125412591310
Housing Starts114911651173118211921288
New Home Sales490491499503507567
Pending Home Sales2.71.991.71.541.451.33
Existing Home Sales546055465402539653785115
Construction Spending-0.40.220.270.290.30.31
Housing Index0.50.480.440.430.420.31
Nahb Housing Market Index6059.2758.9758.4858.0153.23
Mortgage Rate4.064.64.95.14.236.5
Mortgage Applications90.780.460.470.470.47
Home Ownership Rate63.763.763.763.763.763.7
Case Shiller Home Price Index183183182181180160

 

 

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Home Prices in 20 U.S. Cities Climb | Bedford Hills Real Estate

Home prices in 20 U.S. cities rose at a faster pace in the year ended November, underscoring the shortage of supply amid steady demand.

The S&P/Case-Shiller index of property values in 20 cities increased 5.8 percent from a year earlier, the biggest advance since July 2014, a report from the group showed Tuesday in New York. The median projection of 31 economists surveyed by Bloomberg called for a 5.7 percent gain. Nationally, prices rose 5.3 percent year-over-year.

Low inventories are boosting property values, helping support household wealth for homeowners and offsetting some of the damage from the drop in stock prices. While mortgage rates are expected to stay low, faster wage growth is needed to bring homes within reach of more Americans, underpinning the industry’s recovery this year.

“There’s a positive underlying picture in the trend in home prices,” said David Sloan, a senior economist at 4Cast Inc. in New York, who correctly projected the gain. “As long as demand is strong, the price appreciation will persist. We expect it to continue this year.”

Economists’ estimates in the Bloomberg survey ranged from gains of 4.9 percent to 6 percent. The October reading showed a year-over-year advance of 5.5 percent.

Another report from the Federal Housing Finance Agency showed prices increased 0.5 percent in November from the previous month on a seasonally adjusted basis. The gauge measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. It doesn’t provide specific prices.

Three-Month Average

The S&P/Case-Shiller index is based on a three-month average, which means the November figure was also influenced by transactions in October and September.

All 20 cities in the index showed a year-over-year gain, led by an 11.1 percent increase in Portland, Oregon. Chicago had the smallest increase at 2 percent. Gains in November accelerated in 14 cities from the prior month, with indexes for Dallas, Denver and Portland. Oregon, reaching record highs.

The year-over-year gauge provides better indications of trends in prices, the group has said. The panel includes Karl Case and Robert Shiller, the economists who created the index.

Borrowing Costs

“Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market,” David Blitzer, chairman of the S&P index committee, said in a statement. “The consumer portion of the economy is doing well.”

On a monthly basis, home prices in the 20-city index adjusted for seasonal variations climbed 0.9 percent. The Bloomberg survey median called for a 0.8 percent increase.

The month-over-month gain was led by Charlotte, North Carolina, followed by Detroit.

Unadjusted prices in the 20-city gauge rose 0.1 percent from the previous month.

By lowering household wealth, the slump in stock prices will subtract about 0.3 to 0.4 percentage point from consumer spending this year, according to a research note e-mailed today by economists at Goldman Sachs Group Inc. in New York. They projected increasing home prices will make up for some of the decline, limiting the overall reduction in consumption to 0.2 percent.

 

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http://www.bloomberg.com/news/articles/2016-01-26/home-prices-in-u-s-cities-rise-at-fastest-pace-since-july-2014

Strong U.S. housing data offers ray of hope for slowing economy | Bedford Real Estate

U.S. home resales rebounded strongly in December from a 19-month low and prices surged, indicating the housing market recovery remained intact despite signs of a sharp deceleration in economic growth in recent months. The National Association of Realtors said on Friday existing home sales jumped a record 14.7 percent to an annual rate of 5.46 million units, after being temporarily held back by the introduction of new mortgage disclosure rules, which had caused delays in the closing of contracts in November.

Sales were also boosted by unseasonably warm weather and buyers rushing into the market in anticipation of higher mortgage rates. The Federal Reserve raised its benchmark overnight interest rate in December, the first rate hike in nearly a decade.

“We knew a significant number of closings were delayed by new regulations that came into effect in October. Overall, 2015 was a very good year and we’re positioned for a strong spring market,” said Stephen Phillips, president of Berkshire Hathaway Home Services in Chicago.

The mortgage disclosure rules are intended to help homebuyers understand their loan options and shop around for loans suited to their financial circumstances. Realtors said the rules had significantly increased contract closing time frames.

November’s sales pace was unrevised at 4.76 million units. Economists had forecast home resales rebounding 8.9 percent to a 5.20-million rate in December. Sales rose 6.5 percent to 5.26 million units in 2015, the strongest since 2006.

Last month’s snap-back should offer some assurance that domestic demand remains fairly healthy, even as growth appears to have braked sharply at the end of 2015 because of a downturn in manufacturing and mining activity.

The dollar was trading higher against a basket of currencies, while prices for U.S. government debt fell. The housing index .HGX rallied 2.04 percent, outperforming a broadly firmer U.S. stock market. Shares in the nation’s largest homebuilder D.R. Horton Inc (DHI.N) were up 2.59 percent and Lennar Corp (LEN.N) advanced 2.16 percent.

FACTORY DATA SURPRISES While a separate report hinted at some stabilization for the downtrodden manufacturing sector, dollar strength and on-going efforts by businesses to reduce an inventory overhang suggest the sector’s troubles are far from over.

Data firm Markit said its Purchasing Managers Index bounced back in early January from December’s 38-month low as output and new business volumes increase at faster rates.

“We expect output and employment growth in the U.S. manufacturing sector to remain tepid,” said Jesse Hurwitz, an economist at Barclays in New York.

Weak reports on retail sales, inventories, exports and industrial production have left economists estimating that gross domestic product increased at an annual rate of less than 1 percent in the fourth quarter after expanding at a 2 percent pace in the July-September quarter.

A stock market rout has also added to the gloom over the economy. In a third report, the Conference Board said its leading indicator slipped in December after a drop in building permits and persistently weak new factory orders.

Housing is being supported by a strengthening labor market, which has resulted in an acceleration in household formation. Sales, however, remain constrained by a dearth of homes available for sale, which is limiting choice for buyers. In December, the number of unsold homes on the market tumbled 12.3 percent from November to 1.79 million units, the lowest level since January 2013.

At December’s sales pace, it would take 3.9 months to clear the stock of houses on the market, the fewest since January 2005, and down from 5.1 months in November. A six-months supply is viewed as a healthy balance between supply and demand.

With inventories still tight, the median house price jumped 7.6 percent from a year ago to $224,100. House prices increased 6.7 percent in 2015. Although higher prices could sideline potential buyers, especially those wanting to purchase a home for the first time, they are boosting equity for homeowners, which could encourage them to put their homes on the market.

 

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http://www.reuters.com/article/us-usa-economy-idUSKCN0V01T3

How to winter-proof your home | Pound Ridge Real Estate

For 43-year-old Giuia Abano Grady, who lives in Gorham, Maine, and raises pigs and chickens and will soon raise cows, the work needed to prepare her 250-year-old farmhouse for the winter isn’t as easy as just disconnecting a garden hose.

Besides turning off all the exterior water lines and draining her garden’s irrigation system, she seals the doors and windows in her basement with plastic sheeting. Outside doors in the 1730’s-era home get wrapped with spray foam insulation Bloomington IL and plastic, and her basement gets several space heaters set on low to prevent pipes from freezing. Exterior water lines must be wrapped in heat tape and even her barn’s water supply needs a heating line to keep it from icing up, she says.

The preparations were needed, as in January of 2015 nearly 8 feet of snow fell in a little over a month. Thanks to her and her husband’s efforts, her only crisis last winter was a frozen pipe. “An hour with a hair dryer and it was all fixed,” she says.

Fortunately for the rest of us, winter preparations may be as simple as installing an insulating cover to protect your outside faucets and prevent a burst pipe and flooding. But that doesn’t mean you should ignore Old Man Winter’s freezing breath.

Indeed, the National Weather Service is predicting one of the worst snowstorms in years could be hitting the Northeast later this week, with up to two feet of snow expected between Washington, D.C., New York and Boston from mid-Friday into Sunday, along with coastal flooding. Already a blizzard watch is in effect with heavy snow and wind gusts of 40 mph and temperatures in West Virginia, and the Washington, D.C. region, dropping into the 20s Fahrenheit.

Life vests carried aboard airliners have never saved a life. WSJ’s Scott McCartney joins Lunch Break with Tanya Rivero and explains why regulators still require they be carried on planes.

Last year’s winter season saw the second-coldest winter on record for the Northeast region, and for eight individual states — New York, Pennsylvania and all six New England states.

Here are some helpful tips on preparing your home for winter from real-estate broker Re/Max of New Jersey and utilities the Washington Suburban Sanitary Commission (WSSC) in Washington, D.C., the U.S. Fire Administration and the National Weather Service.

  • Repair all broken windows, exterior doors and walls and tightly close doors and windows to the outside. Make sure the outside doors and walls are well insulated. Seal all air leaks in crawl spaces and basements. If your vents won’t close, cover them from the inside with insulation, cardboard, plastic or newspaper, WSSC says.
  • Your attic should be properly insulated and ventilated to circulate the heat throughout the attic. This prevents ice from building up in certain areas and preventing major damage to your roof, Re/Max of New Jersey says.
  • Check your roof. Small leaks can turn into bigger leaks if snow sits on your roof…and then melts. Getting your roof coated by a roofing company before the winter can help to prevent leaks from trickling into your home and hoping the leak doesn’t spring up where you house valuable electronics. In addition, clean your home’s gutters as they are its first line of defense against water damage.
  • Homes with flat roofs are more vulnerable to having snow collect on the roof. Have a good roofing contractor on call that is able to come out and remove large amounts of snow before it turns to ice or your roof buckles under its weight. Be careful on ladders when removing snow and have a second person hold the ladder if it’s more than two stories. It’s worth paying the $100 to $300 costs to remove snow, rather than pay the costs of a collapsed roof, which could cost thousands of dollars.
  • To help prevent the possibility of a burst pipe inside your home, install a pipe insulation sleeve to protect exposed pipes inside your home. Cover all parts of the pipes — even the joints — and seal them with duct tape. This will help keep your home energy efficient and helps reduce your chances of a pipe bursting and flooding your home. If a pipe does freeze, open the cold and/or hot water faucet nearest the frozen pipe, WSSC says. This will relieve the pressure and reduce the chance of breakage. Take a tip from Giuia Abano Grady and use a hand-held dryer if you attempt to thaw out the pipe yourself. Otherwise call a licensed plumber.
  • If you have a fireplace, check inside for cracks, build up and remove old ashes. Also, look outside and to ensure there is no space between the chimney and the exterior wall and that there are no loose bricks. Also the damper, which regulates the flow of air through the chimney, should be able to open and closes easily, Re/Max says.
  • According to the U.S. Fire Administration, one out of every six fires in the home is a result of malfunctioning or incorrectly used heating equipment and half of those fires occur during the winter months of December, January and February. As such, keep anything that could burn at least 3 feet away from a heating source like a space heater or a fireplace. Only one space heater should be plugged into a single electrical outlet at a time, the USFA says. Never use a propane-powered heater indoors unless it’s specifically designed for that purpose with an oxygen monitor that shuts off if high carbon monoxide levels are detected.
  • Arm yourself with plenty of rock salt, de-icer, and shovels to remove snow and ice from the outside of your home. Some cities and towns assess fines to homeowners who don’t remove snow from around their property within a certain amount of time after a heavy snowfall, Re/Max says. Also, remove snow in front of homes where the elderly or disabled reside. You might just get a basket of cookies this winter in return or even satisfaction by doing the right thing.

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http://www.marketwatch.com/story/how-to-winter-proof-your-home-2015-11-24

Sales of previously owned houses surge | Bedford Corners Real Estate

Sales of previously owned houses surged 14.7 percent to a seasonally adjusted annual rate of 5460 thousand in December of 2015, better than market expectations of 5.2 million.

Sales of single family went up 16.1 percent and those of condos grew 4.9 percent. The average price increased 1.9 percent and the months’ worth of supply fell to 3.9.

Considering full 2015, existing homes sales rose 6.5 percent to 5.26 million units, the highest since 2006. Existing Home Sales in the United States averaged 3842.52 Thousand from 1968 until 2015, reaching an all time high of 7250 Thousand in September of 2005 and a record low of 1370 Thousand in March of 1970.

Existing Home Sales in the United States is reported by the National Association of Realtors.

Home Construction Up for 2015 | Chappaqua Real Estate

With the December report on housing starts and permits, preliminary totals for 2015 are now available. Total housing starts at 1.11 million were up 10.8% in 2015 compared to 2014. Single-family starts were up 10.4% to 715,300 and multifamily starts were up 11.4% to 396,000. All four census regions also experienced increases in single-family starts for 2015. The monthly change for December starts was down 2.5% to 1.15 million and December single-family starts were down 3.3% to 768,000.

Housing Starts

Housing permits were up for the year by 12% to 1.18 million with increases in both single-family (up 7.9%) and multifamily (11.4%). December single-family permits were also up from November by 1.8% to 740,000. Total permits, however were down from November to December by 3.9% to 1.232 million.

The number of unused permits rose 4.9% suggesting builders were unable to start more homes than they planned. More than three-quarters of builders responding to an NAHB survey reported labor availability as their greatest concern looking forward into 2016. While inventories of new homes for sale have been increasing, builders are constrained in their ability to add stock because of the labor shortages as well as lot shortages in some markets.

The final numbers for 2015 will see one more revision as the previous month is revised in each new report, but year totals are not likely to change significantly since the first 11 months will remain the same. The improvement in 2015 over 2014 should accelerate slightly in 2016 as mortgage rates remain near historic lows, the overall economy improves and pent-up demand is released.

 

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http://eyeonhousing.org/2016/01/home-construction-up-for-2015/

Another housing crisis just around the corner | Armonk Real Estate

Movie sequels are rarely as good as the original films on which they’re based. The same dictum, it appears, holds for finance. The 2008 housing market collapse was bad enough, but it appears now that we’re on the verge of experiencing it all again. And the financial sequel, working from a similar script as its original version, could prove to be just as devastating to the American taxpayer.

The Federal National Mortgage Association (commonly referred to as Fannie Mae) plans a mortgage loan reboot, which could produce the same insane and predictable results as when the mortgage agency loaned so much money to people who had neither the income, nor credit history, to qualify for a traditional loan.

The Obama administration proposes the HomeReady program, a new mortgage program largely targeting high-risk immigrants, which, writes Investors.com, “for the first time lets lenders qualify borrowers by counting income from nonborrowers living in the household. What could go wrong?”

The question should answer itself.

The administration apparently believes that by changing the dirty words “subprime” to “alternative” mortgages, the process will be more palatable to the public. But, as Investor’s notes, instead of the name HomeReady, which will offer the mortgages, “It might as well be called DefaultReady, because it is just as risky as the subprime junk Fannie was peddling on the eve of the crisis.”

Before the 2008 housing bubble burst, one’s mortgage fitness was supposed to be based on the income of the borrower, the person whose name would be on the deed and who was responsible for making timely monthly payments. Under this new scheme — and scheme is what it is — the combined income of everyone living in the house will be considered for a conventional home loan backed by Fannie. One may even claim income from people not living in the home, such as the borrower’s parents.

If, or as recent history proves, when the approved borrower defaults, who will pay? Taxpayers, of course, not the politicians and certainly not those associated with Fannie Mae and Freddie Mac, whose leaders made out like the bandits they were during the last mortgage go-round. As CNNMoney reported in 2011, “Mortgage finance giants Fannie Mae and Freddie Mac received the biggest federal bailout of the financial crisis. And nearly $100 million of those tax dollars went to lucrative pay packages for top executives, filings show.”

In case further reminders are needed of the outrageous behavior of financial institutions that contributed to the housing market collapse and a recession whose pain is still being felt by many, Goldman Sachs has agreed to a civil settlement of up to $5 billion for its role associated with the marketing and selling of faulty mortgage securities to investors.

Go see the film “The Big Short” to be reminded of the cynicism of many in the financial industry. It follows on the heels of the HBO film “Too Big to Fail,” which revealed how politicians and banks were part of the scam that harmed just about everyone but themselves. According to The New York Times, only one top banker, Kareem Serageldin, went to prison for concealing hundreds of millions in losses in Credit Suisse’s mortgage-backed securities portfolio. Many more should have joined him.

Under the latest mortgage proposal, it’s no credit, no problem. An immigrant can qualify with a credit score as low as 620. That’s subprime. And the borrower has only to put 3 percent down.

Investor’s reports, “Fannie says that 1 in 4 Hispanic households share dwellings — and finances — with extended families. It says this is a large ‘underserved’ market.”

 

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http://www.foxnews.com/opinion/2016/01/19/is-another-housing-crisis-just-around-corner.html