Monthly Archives: July 2016

U.S. housing starts trending up | Pound Ridge Real Estate

Housing Starts in the United States is expected to be 1150.00 Thousand by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Housing Starts in the United States to stand at 1230.00 in 12 months time. In the long-term, the United States Housing Starts is projected to trend around 1280.00 Thousand in 2020, according to our econometric models.

United States Housing Starts
Forecast Actual Q3/16 Q4/16 Q1/17 Q2/17 2020 Unit
Housing Starts 1189 1150 1170 1210 1230 1280 Thousand
United States Housing Starts Forecasts are projected using an autoregressive integrated moving average (ARIMA) model calibrated using our analysts expectations. We model the past behaviour of United States Housing Starts 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 Housing Starts – was last predicted on Tuesday, July 19, 2016.
United States Housing Last Q3/16 Q4/16 Q1/17 Q2/17 2020
Building Permits 1153 1130 1141 1152 1178 1315
Housing Starts 1189 1150 1170 1210 1230 1280
New Home Sales 551 475 517 510 510 590
Pending Home Sales -0.2 0.88 0.72 0.91 1.04 1.26
Existing Home Sales 5530 5472 5453 5439 5417 5182
Construction Spending -0.8 0.4 0.3 0.3 0.2 -0.9
Housing Index 0.2 0.41 0.4 0.39 0.38 0.31
Nahb Housing Market Index 59 59 60 60 59 53
Mortgage Rate 3.6 5.1 3.68 3.73 3.77 6.5
Mortgage Applications 7.2 0.48 0.53 0.53 0.53 0.53
Home Ownership Rate 63.5 63.53 63.53 63.53 63.53 63.53
Case Shiller Home Price Index 187 192 192 192 193 211

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http://www.tradingeconomics.com/united-states/housing-starts/forecast

US homeownership rate matches a 51-year low | Cross River Real Estate

The proportion of U.S. households that own homes has matched its lowest level in 51 years — evidence that rising property prices, high rents and stagnant pay have made it hard for many to buy.

Just 62.9 percent of households owned a home in the April-June quarter this year, a decrease from 63.4 percent 12 months ago, the Census Bureau said Thursday. The share of homeowners now equals the rate in 1965, when the census began tracking the data.

The trend appears most pronounced among millennial households, ages 18 to 34, many of whom are straining under the weight of rising apartment rents and heavy student debt. Their homeownership rate fell 0.7 percentage point over the past year to 34.1 percent. That decline may reflect, in part, more young adults leaving their parents’ homes for rental apartments.

The overall decline appears to be due largely to the increased formation of rental households, said Ralph McLaughlin, chief economist at the real estate site Trulia. McLaughlin cautioned, though, that the decrease in homeownership from a year ago was not statistically significant.

America added nearly a million households over the past year and all of them were renters. Home ownership has declined even as the housing market has been recovering from the 2007 bust that triggered the Great Recession. Ownership peaked at 69.2 percent at the end of 2004.

Home prices have been steadily outpacing gains in average earnings. This has made it harder for first-time buyers to save for down payments, thereby delaying their ability to purchase a home.

The median home sales price was $247,700 in June, up 4.8 percent from a year ago, according to the National Association of Realtors. That increase is roughly double the pace of average hourly wage gains.

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https://finance.yahoo.com/news/us-homeownership-rate-62-9-percent-matches-51-145524882–finance.html

US Homebuilder Sentiment Slips in July | Chappaqua Real Estate

 

U.S. home builders are feeling slightly less optimistic about their sales prospects this month, though their outlook for the new-home market remains positive overall.

The National Association of Home Builders/Wells Fargo builder sentiment index released Monday fell one point to 59.

Readings above 50 indicate more builders view sales conditions as good, rather than poor. The index had mostly held at 58 this year before rising to 60 last month.

Builders’ view of current sales and traffic by prospective buyers slipped one point this month. Their outlook for sales over the next six months slid three points.

The latest survey of builders follows a recent pullback in sales of new U.S. homes.

Sales declined 6 percent in May to a seasonally adjusted annual rate of 551,000 homes. Overall, though, sales are running ahead of last year’s pace through the first five months of this year, aided by job growth and ultra-low mortgage rates.

The average 30-year fixed-rate mortgage ticked up 3.42 percent last week, staying close to its all-time low of 3.31 percent in November 2012. A year ago, the average rate was 4.09 percent.

While new-home sales have rebounded from the depths of the housing bust, the current rate of new home sales lags behind the historical annual average of roughly 650,000 homes. New home sales figures for June are due out next week.

Many builders also continue to grapple with a stubborn dearth of skilled workers and available land parcels cleared for new construction.

Still, the NAHB expects that new-home sales will continue to grow, albeit slowly.

“Job creation is solid, mortgage rates are at historic lows and household formations are rising,” said Robert Dietz, the NAHB’s chief economist. “These factors should help to bring more buyers into the market as the year progresses.”

This month’s builder index was based on 304 respondents.

A measure of current sales conditions for single-family homes slipped one point to 63, while a gauge of traffic by prospective buyers fell one point to 45. Builders’ view of sales over the next six months slid three points to 66.

 

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http://abcnews.go.com/Business/wireStory/us-homebuilder-sentiment-slips-july-40664158

Case Shiller home prices rise | Bedford Hills Real Estate

Home prices are still rising, but not as drastically as before. Some hot markets are even seeing a cooling. Could home prices be near the end of their upward trend, or are they simply changing gears?

National home prices increased by 5% annually in May, the same as the previous month, however the 10-City and 20-City Composite both slipped in annual increases, according to the S&P CoreLogic Case-Shiller Indices, formerly known as S&P/Case-Shiller Home Price Indices.

“Home prices continue to appreciate across the country,” said David Blitzer, S&P Dow Jones Indices index committee managing director and chairman. “Overall, housing is doing quite well.”

“In addition to strong prices, sales of existing homes reached the highest monthly level since 2007 as construction of new homes showed continuing gains,” Blitzer said. “The SCE Housing Expectations Survey published by the New York Federal Reserve Bank shows that consumers expect home prices to continue rising, though at a somewhat slower pace.”

The 10-City Composite increased annually by 4.4%, however that’s slightly less thanApril’s 4.7% increase. Similarly, the 20-City Composite increased annually by 5.2%, a slight decrease from April’s 5.4%.

“Today’s Case-Shiller data paints a picture of a fairly calm and consistent market that looks much the same today as it has for the past few months,” Zillow Chief Economist Svenja Gudell said. “But while the market does look pretty stable from 10,000 feet, a closer look reveals a number of imbalances that are keeping the heat on the housing market this summer.”

“Sellers are in the driver’s seat, as buyers contend with fierce competition and very fast-moving markets,” Gudell said. “Demand is sky high and the number of homes sold is rising, even as inventory of homes for sale keeps falling.”

Portland, Seattle and Denver were among the cities with the highest annual gains among the top 20 cities over each of the last four months.

Readers of HousingWire will not find this surprising, as a deeper look into a report fromBlack Knight yesterday showed that home prices are increasing more in the mountainous areas of the West and in the Pacific Northwest.

“Regional patterns seen in home prices are shifting,” Blitzer said. “Over the last year, the Pacific Northwest has been quite strong while prices in the previously strong spots of San Diego, San Francisco and Los Angeles saw more modest increases.”

“The two hottest areas during the housing boom were Florida and the Southwest,” he said. “Miami and Tampa have recovered in the last few months while Las Vegas and Phoenix remain weak. When home prices began to recover, New York and Washington saw steady price growth; now both are among the weakest areas in the country.”

In May, Portland increased the most 12.5% annually, followed by Seattle at 10.7% and Denver at 9.5%.

 

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http://www.housingwire.com/articles/37621-case-shiller-may-home-prices-rise-at-modest-rate?eid=311691494&bid=1479278

New home sales up | #Bedford Real Estate

Sales of new single-family houses in the United States jumped 3.5 percent to a seasonally adjusted annual rate of 592,000 in June of 2016. It is the highest figure since February of 2008 and better than market expectations of 560,000 boosted by sales in the West and the Midwest. New Home Sales in the United States averaged 652.45 Thousand from 1963 until 2016, reaching an all time high of 1389 Thousand in July of 2005 and a record low of 270 Thousand in February of 2011. New Home Sales in the United States is reported by the U.S. Census Bureau.

United States New Home Sales

 

Actual Previous Highest Lowest Dates Unit Frequency
592.00 572.00 1389.00 270.00 1963 – 2016 Thousand Monthly
Volume, SA
A sale of the new house occurs with the signing of a sales contract or the acceptance of a deposit. The house can be in any stage of construction: not yet started, under construction, or already completed. New home sales account for about 10 percent of the US housing market. New single-family home sales are extremely volatile month-to-month and preliminary figures are subject to large revisions because they are mostly drawn from building permits data. This page provides the latest reported value for – United States New Home Sales – plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news. United States New Home Sales – actual data, historical chart and calendar of releases – was last updated on July of 2016.
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http://www.tradingeconomics.com/united-states/new-home-sales

June housing starts jump | Bedford Corners Real Estate

U.S. housing starts rose more than expected in June as construction activity increased broadly, but a downward revision to the prior month’s data pointed to a housing sector treading water in the second quarter.

Groundbreaking surged 4.8 percent to a seasonally adjusted annual pace of 1.19 million units, the Commerce Department said on Tuesday. May’s starts were revised down to a 1.14 million-unit pace from the previously reported 1.16 million-unit pace.

Economists polled by Reuters had forecast housing starts rising to a 1.17 million-unit pace last month.

Housing starts in the second quarter were a touch higher than the average for the first three months of the year, suggesting that residential construction was probably a small boost to gross domestic product in the second quarter.

The housing market is being supported by a strengthening labor market and demand for rental accommodation, but home building is being constrained by labor and land shortages.

A survey of homebuilders published on Monday showed scattered softness in some markets, with builders citing regulatory challenges, as well as shortages of lots and labor.

Groundbreaking on single-family homes, the largest segment of the market, increased 4.4 percent to a 778,000-unit pace in June. Single-family starts in the South, where most home building takes place, gained 0.5 percent.

Single-family starts jumped 31.6 percent in the Northeast and climbed 3.1 percent in West. Groundbreaking on single-family housing projects increased 7.3 percent in the Midwest.

But single-family home construction continues to run ahead of permits, which could limit gains in the near term.

Housing starts for the volatile multi-family segment rose 5.4 percent to a 411,000-unit pace. The multi-family segment of the market continues to be supported by strong demand for rental accommodation as some Americans remain wary of homeownership in the aftermath of the housing market collapse.

 

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http://www.foxbusiness.com/markets/2016/07/19/june-housing-starts-rise-4-8.html

Case Shiller report due out Tuesday | Bedford Hills #Homes

House sales and prices are rising.  Home sales in June were 5.57 million at annual rates, the highest since February 2007 when national home prices peaked.  Currently prices as measured by the S&P/Case-Shiller National Home Price Index are climbing at a 5% annual rate and are a mere 3% from their all-time peak.

What next?  The next S&P/Case-Shiller Home Price Index report will be released on Tuesday morning at 9 AM – check to see if the advance continues.  The data will be posted at www.spdji.com.

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So California home prices jump | Armonk Real Estate

The Southern California housing market is red-hot again.

Home prices in the region have been climbing steadily, as they have nationwide, toward record levels not seen since the 2008 housing crisis plunged the country into a severe recession.

The S&P/Case-Shiller home price index, a widely followed gauge of the market, showed that prices in the Los Angeles market in April stood at their highest point since October 2007.

The median home price in Orange County in May was $651,500, surpassing its bubble-era peak reached in 2007, according to the real estate data firm CoreLogic.

Interest rates of about 3.5% or less for 30-year, fixed-rate mortgages  not far off the all-time low of 3.31% in November 2012  have helped fuel the gains.

Dana Kuhn is a lecturer at the Corky McMillin Center for Real Estate at San Diego State University, and we asked him to summarize the market and what it means for would-be buyers and sellers. Here’s an edited excerpt:

Has the Southern California housing market completely recovered from the recession?

In the most desirable markets, that’s essentially true. That would be West Coast large-metro areas. The San Francisco Bay Area is now priced above its peak numbers of the last decade. Orange County, too, and Los Angeles and San Diego are getting very close to their former peaks. Seattle is doing really well. Portland is doing well.

One of the worst-hit areas in the housing crisis was the Inland Empire. How is that region faring?

That was the real subprime [mortgage] disaster area. Those markets have been slower to recover. There are areas like the Inland Empire that are probably only between 80% and 85% of [their pre-bubble] peak.

Is it surprising that it’s taken this long?

Yes and no. Given how severe the recession was, there was so little production [of new housing] in that time. There was a four-year period between September 2008 and September 2012 when the nation’s housing starts were below all previous troughs going back some 40 years. And in those previous troughs, what you typically had was one year at that nadir, and then you’d climb back up fairly quickly. But we had four years below all of those troughs, and so production obviously fell behind demand.

So there was a huge pent-up demand when people started getting jobs and believing in housing again. The industry has struggled to keep up with it in the more desirable markets.

Is that driving the surge in prices?

Yes. Like most things, it’s a supply/demand situation. The number of [housing] starts hasn’t been able to take care of that pent-up demand. The pricing has gone up accordingly, and that has been accommodated by low [mortgage] interest rates. Continued low interest rates have in essence subsidized a rapid ascent in pricing.

Why is it tough to add more housing to the supply in Southern California?

Land is increasingly scarce, and that’s forcing people to build up rather than out. And those higher-density projects are more sensitive politically, more difficult to get approved and take longer to get through the pipeline. You can have agreement about needing more housing in a given market, but when it actually comes down to [building] those 300 units on that corner in that neighborhood, you get resistance. So it can take years in Southern California coastal areas to get [those] projects approved. That’s true whether it’s a for-sale product or a rental market.

This all sounds good for sellers, but is it a tough time to be a buyer?

Yes. Unfortunately real [inflation-adjusted] wage growth hasn’t kept up with that surge in pricing. It’s significantly harder to buy something now than it was a few years ago because people’s wages just haven’t kept up, even though interest rates are still the same.

The median price of a house in Los Angeles County is above a half-million dollars. How does a first-time buyer afford that?

They don’t buy that house. That’s the middle of a statistical group. Your first-time buyer is pretty much forced to buy a [less-expensive] attached product, not detached.

Like a condominium?

Yes. And they’re probably not going to be able to afford to buy that unit in the same neighborhood in which they would rent if they were renters. So they have to make a lifestyle concession in order to become homeowners.

Meaning they would build up equity in that house, then later sell it in hopes of buying one in the neighborhood they desire?

Right. Also, the millennial generation [18 to 34 years old] has eschewed the concept of home ownership because they saw their parents and others get burned in the last downturn and because they prefer lifestyle over ownership.

But as they get older and have kids they’ll have a different outlook. And as their wages increase, they’re also going to realize the importance of the mortgage deduction  the tax benefits that come from home ownership  and there will be move back toward home ownership.

 

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http://www.latimes.com/business/la-fi-qa-home-prices-20160713-snap-story.html?yptr=yahoo

Freddie Mac: Brexit to push housing market forward in 2016 | Waccabuc Real Estate

International concerns such as slowing growth in Chinaand the Brexit vote in the U.K. played a major role in driving down mortgage rates in the U.S., according toFreddie Mac’s monthly Outlook for July.

In fact, after the U.K’s vote to leave the European Union, mortgage rates continue to lower, closing the gap even more to all-time lows at 3.41%.

This is likely to result in a boost in housing activity, particularly refinance, as homeowners take advantage of the current low rates, according to Freddie Mac’s report.

“With the U.K.’s decision to exit from the European Union, global risks increased substantially leading us to revise our views for the remainder of 2016 and all of 2017,” Freddie Mac Chief Economist Sean Becketti said.

“Nonetheless, the turbulence abroad should continue to create demand for U.S. Treasuries and keep mortgage rates near historic lows,” Becketti said. “Thereby, allowing home sales to have their best year in a decade, along with a boost in refinance activity.”

The remaining quarters of 2016 should show an increase in Gross Domestic Product at 1.9% and 2.2% in 2016 and 2017.

Due to these recent global pressures, Freddie Mac revised the 30-year fixed-rate mortgage forecast down by 30 basis points for 2016 and by 50 basis points for 2017 to 3.6% and 4% respectively.

With this new drop in mortgage rates, the refinance share of originations will rise by 49% in 2016, an increase of 8% from last month’s forecast. That will be an increase of $100 billion in originations, bringing the total to $1,825 billion.

 

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http://www.housingwire.com/articles/37499-freddie-mac-brexit-to-push-housing-market-forward-in-2016?eid=311691494&bid=1460292

Foreclosures nearing decade low | North Salem Real Estate

The number of homes in some stage of foreclosure and the number of seriously delinquent mortgages continued to decline in May, falling to the lowest level since October 2007, according to the latest data from CoreLogic.

CoreLogic’s May 2016 National Foreclosure Report shows the national foreclosure inventory, which is the total number of homes at some stage of the foreclosure process and completed foreclosures, hovers around 390,000 homes.

In April, the national foreclosure inventory was roughly406,000 homes, and in March, that figure was 427,000 homes.

According CoreLogic’s report, May’s foreclosure inventory hit the lowest level in nearly nine years.

CoreLogic’s report also showed that in May, the foreclosure inventory declined by 24.5% and completed foreclosures declined by 6.9% compared with May 2015.

The number of completed foreclosures nationwide decreased year over year from 41,000 in May 2015 to 38,000 in May 2016, which represents a decline of 67.9% from the peak of 117,813 in September 2010.

CoreLogic’s report also showed the sustained improvement in the number of mortgages in serious delinquency, defined as loans that are 90 days or more past due, and loans in foreclosure or Real Estate Owned.

According to CoreLogic’s report, the number of mortgages in serious delinquency fell by 21.6% from May 2015 to May 2016, with 1.1 million mortgages, or 2.8% of all mortgages, in this category.

The May 2016 serious delinquency rate is also the lowest in nearly nine years, reaching the lowest level since October 2007.

“The foreclosure rate fell to 1% in May, which is twice the long-term average of 0.5%. However, this masks the underlying progress at the state level,” said Frank Nothaft, chief economist for CoreLogic. “Twenty-nine states had foreclosure rates below the national average, and all but North Dakota experienced declines in their foreclosure rate compared to the prior year.”

 

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http://www.housingwire.com/articles/37502-foreclosures-serious-delinquencies-nearing-decade-low?eid=311691494&bid=1460292