Monthly Archives: October 2016

Case-Shiller up 5.1% | Mt Kisco Real Estate

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United States S&P Case-Shiller Home Price Index  

The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index rose 5.1 percent year-on-year in August of 2016, following a 5 percent increase in July and above market expectations of 5 percent. Portland, Seattle and Denver reported the highest annual gains over each of the last seven months with prices up by 11.7 percent, 11.4 percent and 8.8 percent respectively in August. On a monthly basis, the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index increased 0.4 percent, easing from a 0.6 percent rise in July. Case Shiller Home Price Index in the United States averaged 157.24 Index Points from 2000 until 2016, reaching an all time high of 206.52 Index Points in July of 2006 and a record low of 100 Index Points in January of 2000. Case Shiller Home Price Index in the United States is reported by the Standard & Poor’s.

United States S&P Case-Shiller Home Price Index
CalendarGMTReferenceActualPreviousConsensusForecast (i)
2016-09-2701:00 PMJul5%5.1%5.1%5.1%
2016-10-2501:00 PMAug5.1%5%5%5%
2016-10-2501:00 PMAug0.4%0.6%0.4%0.5%
2016-11-2402:00 PMSep0.4%
2016-11-2402:00 PMSep5.1%
2016-12-2902:00 PMOct

 

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http://www.tradingeconomics.com/united-states/case-shiller-home-price-index

Freddie Mac real estate outlook | Armonk Real Estate

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Freddie Mac (OTCQB: FMCC) released today its monthly Outlook for October showing that housing remains a bright spot in the face of a marginally improving U.S. economy and tight inventories of for-sale homes. However, mortgage activity, which has benefited greatly from low mortgage rates post-Brexit, is starting to see a slowdown in refinance activity that will persist into next year as the mortgage market transitions to a purchase-dominated mix.

Outlook Highlights

  • Continued strength in consumer spending and a reduction in the drag from inventory spending should boost second half growth, resulting in full-year 2016 GDP growth of 1.6 percent. The economy should do modestly better in 2017, posting 1.9 percent year-over-year growth.
  • A mature expansion operating near full employment only needs to generate enough jobs to keep the unemployment rate steady. Expect the unemployment rate to decline slightly over the next year-and-a-half, ending 2017 at 4.7 percent.
  • Even if worldwide bond yields recover to the pre-Brexit status quo, mortgage interest rates are likely to remain low for an extended period. Expect a gradual rise in rates throughout the remainder of 2016 and into 2017, with the 30-year fixed-rate mortgage averaging 3.9 percent in the fourth quarter of 2017.
  • Don’t expect much increase in total home sales going forward with a slight decline in seasonally-adjusted sales in the fourth quarter. Next year, rising new home sales driven by increases in new single-family housing construction will push total home sales slightly higher, to 6.16 million in 2017 compared to 6.04 million in 2016.
  • Forecasting house prices will grow at a 5.6 percent annual rate in 2016, moderating to 4.7 percent in 2017.

Quote: Attributed to Sean Becketti, Chief Economist, Freddie Mac.

“The economy and labor markets are looking better. We’re even seeing modest wage gains. And Fed watchers are increasingly predicting a December rate hike as things improve. However, worldwide economic growth is weak and its prospects have gotten worse. This may all sound familiar because we’ve been here before… last year.

“As the economy sputters along a little bit faster than stall speed, the U.S. housing market continues to be a bright spot, though there’s less room to run than in the prior few years. Unlike new home sales, existing home sales have nearly recovered back to pre-recession norms. Regardless, we see new home sales improving some next year driven by increases in new single-family housing construction which will push total home sales slightly higher.”

 

 

 

 

Low Mortgage Rates Sustain Improving Housing Markets | Chappaqua Real Estate

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Freddie Mac released its Multi-Indicator Market Index® (MiMi®), showing two additional metro areas — Indianapolis, Indiana, and Columbus, Ohio — entering their historic benchmark levels of housing activity.

The national MiMi value stands at 85.1, largely unchanged from last month, indicating a housing market that’s on the outer range of its historic benchmark level of housing activity with a +0.14 percent improvement from June to July and a three-month improvement of +1.24 percent. On a year-over-year basis, the national MiMi value improved +4.70 percent. Since its all-time low in October 2010, the national MiMi has rebounded 43 percent, but remains significantly off its high of 121.7.

News Facts:

  • Thirty-eight of the 50 states plus the District of Columbia have MiMi values within range of their benchmark averages, with Utah (97.5), Hawaii (96.6), Montana (96.5), Colorado (96) and Oregon (95.8) ranking in the top five with scores closest to their historical benchmark index levels of 100.
  • Seventy-nine of the 100 metro areas have MiMi values within range, with Los Angeles, CA (99.5), Salt Lake City, UT (100.6), Provo, UT (98.9), Honolulu, HI (98.7) and Nashville, TN (101.6) ranking in the top five with scores closest to their historical benchmark index levels of 100.
  • The most improving states month over month were Illinois (+1.72%), Nevada (+1.36%), Florida (+1.20%), Alabama (+1.14%) and South Carolina (+1.00%). On a year-over-year basis, the most improving states were Florida (+10.03%), Oregon (+9.49%), Colorado (+9.09%), New Jersey (+8.64%) and Tennessee (+8.54%).
  • The most improving metro areas month over month were Lakeland, FL (+2.13%), Youngstown, OH (+1.92%), Chicago, IL (+1.73%), Orlando, FL (+1.63%) and Las Vegas, NV (+1.61%). On a year-over-year basis, the most improving metro areas were Orlando, FL (+16.20%), Tampa, FL (+13.03%), Lakeland, FL (+13.02%), Chattanooga, TN (+12.89%) and Palm Bay, FL (+12.47).
  • In July, 32 of the 50 states and 75 of the top 100 metros were showing an improving three-month trend. The same time last year, all 50 states and the top 100 metro areas were showing an improving three-month trend.

Quote attributable to Freddie Mac Deputy Chief Economist Len Kiefer:

“Nationally, MiMi in July was largely unchanged for the third consecutive month at 85.1, yet marking a 4.7 percent year-over-year increase. Despite rising house prices, the majority of housing markets have sustained their momentum due in large part to low mortgage rates. For example, purchase applications, as measured by MiMi, were up more than 17 percent year over year in July and remaining at their highest level since December 2007.”

The 2016 MiMi release calendar is available online.

MiMi monitors and measures the stability of the nation’s housing market, as well as the housing markets of all 50 states, the District of Columbia, and the top 100 metro markets. MiMi combines proprietary Freddie Mac data with current local market data to assess where each single-family housing market is relative to its own long-term stable range 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. The four indicators are combined to create a composite MiMi value for each market. Monthly, MiMi uses this data to show, at a glance, where each market stands relative to its own stable range of housing activity. MiMi also indicates how each market is trending, 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.

Mortgage rates average 3.52% | Waccabuc Real Estate

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Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates moving higher for the second week in a row and marking the first time the 30-year fixed-rate mortgage has risen above 3.5 percent since June.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.52 percent with an average 0.5 point for the week ending October 20, 2016, up from last week when they averaged 3.47 percent. A year ago at this time, the 30-year FRM averaged 3.79 percent.
  • 15-year FRM this week averaged 2.79 percent with an average 0.5 point, up from last week when they averaged 2.76 percent. A year ago at this time, the 15-year FRM averaged 2.98 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 2.82 percent. A year ago, the 5-year ARM averaged 2.89 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 the Definitions. Borrowers may still pay closing costs which are not included in the survey.

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

“The 30-year fixed-rate mortgage moved a solid 5 basis points to 3.52 percent while the 10-year Treasury yield remained relatively flat. This is the first week in over 4 months that rates have risen above 3.50 percent. This month, mortgage rates seem to be catching up to Treasury yields and returning to pre-Brexit levels.”

Shortage of appraisers causing home sales delays | Mt Kisco Real Estate

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Housing demand is rising rapidly, but a key cog in the wheel to homeownership is in deep trouble. The people most needed to close the deal are disappearing. Appraisers, the men and women who value homes and whom mortgage lenders depend upon, are shrinking in numbers. Learn about the value of your property with a palm beach county property appraiser to ensure you get money’s worth.

That is causing growing delays in closings, costing buyers and sellers money and in some cases even scuttling deals.

The share of on-time closings has dropped from 77 percent last April to 64 percent today for loans backed by Fannie Mae and Freddie Mac, according to Campbell/Inside Mortgage Finance. Appraisal-related issues in these delays jumped by 50 percent in that time.

“The appraisal shortage is massive. You’re seeing significant delays, you’re seeing cost increases, you’re seeing rate [locks] expire,” said Brian Coester, CEO of Rockville, Maryland-based CoesterVMS, a national appraisal management company.

Since 2007, when the U.S. housing market came crashing down, the number of appraisers has shrunk by 22 percent, according to the Appraisal Institute, an industry association. With so few new cadets, the current population of appraisers is aging. More than 60 percent are over the age of 50.

Ironically, the decline in new appraisers is largely due to new regulations designed to safeguard both banks and borrowers. They were put in place at the end of 2008 by Fannie Mae, Freddie Mac and the FHA, as the entire mortgage banking community was under strict scrutiny after the financial crisis. They changed the rules that would allow appraiser apprentices to do full appraisals and instead require the licensed appraiser to be on-site for the inspection.

The result is that appraisers no longer see a need to pay apprentices, but at the same time, licensing requirements to become an appraiser include 2,500 hours of appraisal experience to be completed in two years as an apprentice.

“The typical appraiser, he’s going to do approximately 10-15 appraisals a week. For him to be able to take a trainee, he needs the ability for the trainee to go ahead and inspect the property for him,” said Coester. “The rules have changed now, and you cannot do what you used to be able to do 10 years ago, which is hire three to four trainees and really have them go and inspect the properties, go and do work for you and really function as an apprentice. That market has been completely eliminated.”

At 1 p.m. on a Monday in Frederick, Maryland, appraiser Joyce Smith has already valued three homes and is walking into the fourth. A 23-year veteran of the business, she said she has never been this busy.

“I get calls five, six, seven, eight times a day. I used to go far away to do appraisals, but there are so many, I don’t have to go very far anymore,” said Smith.

In some of the nation’s hottest housing markets, where sales are up double digits compared to a year ago, the shortage means searching far and wide for an appraiser.

“We’ve been hearing from our agents in Colorado about significant delays in getting appraisals done,” said Alina Ptaszynski, a spokesperson for Redfin. “Our Denver market manager said for one deal, the appraiser came in from Cheyenne, Wyoming. She reported it taking up to seven weeks to get an appraisal done. Valuations aren’t the concern as much as the delays.”

Valuations are, however, becoming increasingly important, as home price gains accelerate, and competition in the market heats up. Prices could change in the course of two months, the delay time it is now taking in some markets to have an appraisal done. Mortgage rates are also starting to move in a wider range, and that makes rate-locks ever more important. It can cost significant cash to extend a rate lock.

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http://www.cnbc.com/2016/09/27/massive-shortage-in-appraisers-causing-home-sales-delays.html?__source=newsletter%7Ceveningbrief

September Housing Starts Decline on Multifamily Weakness | North Salem Real Estate

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The September pace of total housing starts decreased 9% due a substantial decline in multifamily production. Single-family construction continues, as expected, along a positive trend.

According to estimates from the Census Bureau and the Department of Housing and Urban Development, single-family starts increased 8.1% to a 783,000 seasonally adjusted annual rate in September. Year-to-date, single-family housing starts are running almost 10% higher than the year-to-date total for September of 2015.

Single-family permit growth points to additional growth. On a year-to-date basis, single-family permits from January to September of 2016 are more than 8% higher than this time in 2015.

Multifamily starts (units in 2+ properties) posted a large decline in September after a few months of strength. Apartment construction starts declined 38% in September to a seasonally adjusted annual rate of 264,000. Multifamily permits on a year-to-date basis are about 11% lower than this time in 2015.

Taken together, these trends are consistent with the NAHB forecast, which sees gathering strength for single-family construction and a leveling off of multifamily production as the market finds a balance between housing demand and supply.

sf-starts

Regionally, single-family starts showed strength in the Northeast, increasing 20%% on a monthly basis. Gains for single-family starts were also realized in the South (12%) and Midwest (6%). The West posted a slight drop of 2% after a strong August.

On a year-to-date basis, however, all regions have posted gains. Single-family starts are up 12% in the Northeast, 12% in the Midwest, 8% in the South and 6% in the West when comparing the September 2016 year-to-date total relative to the comparable September 2015 year-to-date totals.

construction

Taking the long view, an examination of the count of homes currently under construction provides the degree of market mix and momentum of the recovery in home construction. As of September, 58% of units under construction in the nation were multifamily (605,000). The count of 605,000 is a 13% gain over a year earlier.

 

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http://eyeonhousing.org/2016/10/september-housing-starts-decline-on-multifamily-weakness/

Will Airbnb disrupt the housing market? | Armonk Real Estate

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Crowds press together in the streets of New Orleans as people gather to see the city’s festivities, but this year, there’s something different about the tourists. This year, instead of staying in the city’s hotels, more tourists are pouring into residential areas after using an app to quickly book a home for the week.

Airbnb, founded in 2008 as an online marketplace for short-term rentals, has seen its business grow exponentially in the last few years. In 2014, rooms available through the site jumped from 300,000 in February to more than 1 million in December, outpacing many of the largest hotel groups in the world. In May of 2016 Airbnb had almost 1.4 listings on the site and raised its revenue projection for this year to more than $900 million.

But the site impacts more than just hotel chains. As more investors, not just homeowners, use the site to rent out spare rooms — and even spare couches — it strains the supply of rental houses.

This is especially true in a place like New Orleans, where rising home prices have caused serious affordability problems. Home prices have risen 46% since Hurricane Katrina hit, according to an article by Katherine Sayre for The Times-Picayune.

Besides the number of lives lost, the most tangible impact the hurricane had on the city was the demolition of its housing stock, where 26% to 34% of its housing was lost or damaged, according to an article by Allison Plyer for The Data Center. The Center’s “The New Orleans Index” was the most widely used means of tracking rebuilding efforts in the months and years following Hurricane Katrina.

As of February 2016, Airbnb had a total of 3,621 active listings in New Orleans, according to data from Inside Airbnb, a non-commercial set of tools and data that shows how Airbnb is being used in different cities around the world.

Of course, there would seem to be a correlation between the rise in home prices and the gains in the app’s popularity, however, correlation does not always equal causation.

In order to truly understand the app’s effects, or lack thereof, you have to look deeper.

One letter circulating on Facebook entitled “Dear Airbnb Renter!” talks about what it sees as the dangers of Airbnb.

“The spread of tourism into residential neighborhoods is pushing out the people who live there,” the letter stated. “When landlords can get so much more for a property on Airbnb they no longer want to rent to actual working New Orleanians. Even residents that own their home are finding it difficult to pay their taxes because of the rising property values.”

That kind of outcry has reached lawmakers. In a letter sent on July 13 to Federal Trade Commission Chairwoman Edith Ramirez, several prominent senators expressed their concern. Sens. Brian Schatz, D-Hawaii; Elizabeth Warren, D-Mass, and Diane Feinstein, D-Calif, stated that they are especially concerned that short-term rentals are not only making housing more expensive in certain communities, but also making it harder to buy a house in the first place.

 

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Will Airbnb disrupt the housing market?

U.S. housing starts fall 9% | Waccabuc Real Estate

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Housing starts in the United States tumbled 9 percent to a seasonally adjusted annualized rate of 1047 thousand in September from August of 2016, below market expectations of 1175 thousand. It is the lowest figure since March of 2015, due to a fall in construction of multifamily homes. In contrast, building permits rose 6.3 percent to 1225 thousand, beating expectations of 1165 thousand. Housing Starts in the United States averaged 1439.56 Thousand from 1959 until 2016, reaching an all time high of 2494 Thousand in January of 1972 and a record low of 478 Thousand in April of 2009. Housing Starts in the United States is reported by the U.S. Census Bureau.

United States Housing Starts

 

 

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

 

Home prices increasing annually | Cross River Real Estate

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Home prices continued their increasing trends continued to increase in July, but at a slower rate than before, according to the most recent report by S&P CoreLogic Case-Shiller Indices released by S&P Dow Jones Indices and CoreLogic.

“The S&P CoreLogic Case-Shiller National Index is within 0.6% of the record high set in July 2006,” said David Blitzer, S&P Dow Jones Indices managing director and chairman of the Index Committee. “Seven of the 20 cities have already set new record highs.”

“The 10-year, 20-year, and National indices have been rising at about 5% per year over the last 24 months,” Blitzer said. “Eight of the cities are seeing prices up 6% or more in the last year. Given that the overall inflation is a bit below 2%, the pace is probably not sustainable over the long term.”

Annually, the National Home Price index showed a gain of 5.1% in July. This is up slightly from June’s 5% annual gain. The 10-City Composite increased by 4.2% annually and the 20-City Composite increased by 5%. Each of these is down from June’s 4.3% and 5.1% for the respective composites.

Click to Enlarge

Case-SHiller

(Source: S&P Dow Jones Indices, CoreLogic)

“Both the housing sector and the economy continue to expand with home prices continuing to rise at about a 5% annual rate,” Blitzer said. “The statement issued last week by the Fed after its policy meeting confirms the central bank’s view that the economy will see further gains.”

While the Federal Open Market Committee did not raise rates at their last meeting, Janet Yellen, Federal Reserve System chair of the Board of Governors, explained, “Our decision does not reflect a lack of confidence in the economy.”

She explained the Fed preferred to take a more cautious approach to see if current growth would continue.

“Most analysts now expect the Fed to raise interest rates in December,” Blitzer said. “After such Fed action, mortgage rates would still be at historically low levels and would not be a major negative for house prices.”

Out of the 20 cities, Portland, Seattle and Denver reported the highest annual gains over the last six months. In July, Portland increased 12.4%, Seattle increased 11.2% and Denver increased 9.4%.

After seasonal price adjustment, the National Index increased by 0.4% monthly but the 10-City Composite decreased 0.1%. The 20-City Composite remained unchanged.

 

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Case-Shiller results barely miss housing-boom high

National Home Prices Re-accelerated | South Salem Real Estate

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S&P Dow Jones Indices released the Case-Shiller (CS) National Home Price Index for July. The index rose at a seasonally adjusted annual growth rate of 5.0%, faster than the 2.1% in June. House prices have decelerated since the beginning of 2016 due to the sharp decline in existing home sales at the end of 2015. But, home prices started to accelerate in May and home price appreciation increased to 5.0% in July.

The Home Price Index from the Federal Housing Finance Agency (FHFA) rose at a seasonally adjusted annual rate of 5.8% in July, following 3.4% in June, confirming the reacceleration in home prices.

figure1_jul16

However, local housing markets varied greatly. Figure 2 shows home price appreciation for 20 major U.S. metropolitan areas in July.

Twelve out of the 20 metro areas had positive home price appreciation. The highest one in the list was Portland, OR with an annual rate of 8.2%, followed by Denver with an annual rate of 6.6%. Phoenix placed third with an annual rate of 5.9%.

Home price appreciation in the remaining eight metro areas was negative. They are San Francisco, Washington, DC, Atlanta, Chicago, Boston, Detroit, Minneapolis, and New York. Home price appreciation in Chicago was -5.9%, the lowest among 20 metro areas.

figure2_jul16

 

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http://eyeonhousing.org/2016/09/national-home-prices-reaccelerated-local-home-prices-varied-in-july/