Monthly Archives: December 2015

U.S. housing starts surge | Chappaqua Real Estate

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U.S. housing starts in November rebounded from a seven-month low and permits surged to a five-month high, signs of strength in the housing market that could give the Federal Reserve more confidence to raise interest rates on Wednesday.

Groundbreaking jumped 10.5 percent to a seasonally adjusted annual pace of 1.17 million units, the Commerce Department said on Wednesday. October’s starts were largely unchanged at a 1.06 million-unit rate.

The strong report came as Fed officials were due to resume a two-day monetary policy meeting. The U.S. central bank is expected to raise its benchmark overnight interest rate from near zero at the end of the meeting. The first rate hike in nearly a decade is not expected to derail the housing recovery.

November marked the eighth straight month that starts remained above 1 million units, the longest stretch since 2007. Economists expect housing starts to average around 1.1 million units for 2015, which would be the highest since 2007 and up from 1.0 million units in 2014.

Robust household formation as labor market strength encourages young adults to leave their childhood homes is underpinning the housing market recovery.

But the sector remains constrained by a persistent shortage of houses available for sale. This has resulted in home prices rising faster than salaries, pushing more people towards renting.

Economists polled by Reuters had forecast housing starts rising to a 1.135 million-unit pace last month.

Single-family housing starts, the largest segment of the market, increased 7.6 percent to a 768,000-unit pace. That was the highest reading since January 2008. Groundbreaking on single-family projects rose 8.8 percent in the South, where most home building takes place.

 

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Reuters.com

Are appraisals all wrong? | Armonk Real Estate

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A study by a company that analyzes appraisals to reduce lender risk found that 39 percent of more than 300,000 appraisals contained property quality or condition ratings that conflicted with previous ratings of the same property.

Conflicting property condition and quality ratings cause delays that generally range from one day to several days—a costly and risky setback for lenders concerned with rate locks, and deadline-oriented guidelines and regulations. They can result from a number of factors, such as human error, appraiser subjectivity, actual changes in the property’s condition or quality, or even possible appraisal fraud, which has been cited by the GSEs as the top origination fraud scheme trend in 2014.

“More than one in three appraisals contain inconsistencies in property ratings,” said Phil Huff, president and CEO of Platinum Data Solutions. “Causes aren’t easy to determine, so they need to be investigated. Doing this after UCDP submission opens lenders up to numerous issues. Costly delays are just one of them.”

Fannie Mae’s new Collateral Underwriter (CU) identifies rating inconsistencies on loans submitted through the Uniform Collateral Data Portal (UCDP) by comparing the appraisal’s data with its own proprietary data, and flags the appraisal for comments or corrections.

Despite Platinum Data Solutions’ findings, the Treasury Financial Crimes Enforcement Network reported that loans with appraisal or valuation fraud fell to15% or 2,033 incidents in 2014 from 7,641 in 2013, a 50% improvement in 3 years.

 

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http://www.realestateeconomywatch.com/2015/10/are-39-percent-of-appraisals-wrong/

Mortgage rates average 3.95% | North Salem Real Estate

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Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the average 30-year fixed mortgage rate ticking slightly higher on a better than expected November employment report.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.95 percent with an average 0.6 point for the week ending December 10, 2015, up from last week when it averaged 3.93 percent. A year ago at this time, the 30-year FRM averaged 3.93 percent.
  • 15-year FRM this week averaged 3.19 percent with an average 0.5 point, up from last week when it averaged 3.16 percent. A year ago at this time, the 15-year FRM averaged 3.20 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.03 percent this week with an average 0.5 point, up from last week when it averaged 2.99 percent. A year ago, the 5-year ARM averaged 2.98 percent.
  • 1-year Treasury-indexed ARM averaged 2.64 percent this week with an average 0.2 point, up from 2.61 percent last week. At this time last year, the 1-year ARM averaged 2.40 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 links for theRegional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

As of January 1, 2016, the PMMS will no longer provide results for the 1-year ARM. Additionally, the regional breakouts will not be provided for the 30-year and 15-year fixed rate mortgages, and the 5/1 Hybrid ARM.

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

“The economy added 211,000 new jobs in November exceeding analysts’ expectations, and the prior two months were revised higher as well. This momentum is likely to cement a decision by the Fed to begin raising interest rates this month. Following the release of the employment report, Treasuries rose 7 basis points and in response the 30-year mortgage rate ticked up two basis points to 3.95 percent.”

October Gains for Residential Construction Spending | Waccabuc Real Estate

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NAHB analysis of Census construction spending data shows that total private residential construction spending for October increased to a seasonally adjusted annual rate of $399 billion. On a month-over-month basis, private single-family spending was $226 billion, up by 1.6% over the revised September estimate. Private multifamily spending increased to $58 billion, up by 1.4%.

Annually, the pace of multifamily spending rose 28% from the October 2014 estimate, and spending on single-family construction was 11% higher.

The NAHB-constructed spending index, which is shown in the graph below (the base is January 2000), indicates that recent gains have been driven by the steady increase in multifamily construction spending. The pace of the multifamily spending is gradually slowing. The monthly growth rate of multifamily construction fell to 1.4% in October from relatively higher rates in August (8%) and September (6%). NAHB anticipates accelerating growth for single-family spending in 2015.Slide1

The pace of total nonresidential construction spending increased by 1% monthly in October, and the annual increase from the revised September 2014 estimate was 11%. The largest contribution to this year-over-year nonresidential spending gain was made by the class of manufacturing-related construction (41% increase), followed by lodging (30% increase) and amusement/recreation (24% increase).

Slide2

 

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http://eyeonhousing.org/2015/12/october-gains-for-residential-construction-spending/