Just back out of hospital in early March for home recovery. Therapist coming today.
Category Archives: blog
Building Materials Prices Decline for Second Consecutive Month | Pound Ridge Real Estate
The prices of building materials decreased 0.2% in October (not seasonally adjusted) following a 0.5% decline in September according to the latest Producer Price Index (PPI) report. The index has decreased four of five months for the first time since 2015. The PPI for goods inputs to residential construction, including energy, was led 0.2% higher by prices of diesel fuel (+9.5%) and unleaded gasoline (+5.7%).
The price index of services inputs to residential construction decreased 0.7% in October, the seventh consecutive monthly decline. Prices have fallen a total of 14% since the index last increased in March 2022 and are just 1.4% higher than they were a year ago.
Softwood Lumber
The PPI for softwood lumber (seasonally adjusted) fell 1.7% in October following 5.5% and 3.1% declines in August and September, respectively. Softwood lumber prices are 4.4% higher than they were a year ago but have fallen 41.3% since March. The index remains 3.0% above pre-pandemic levels.
Steel Mill Products
Steel mill products prices decreased 6.6% in October and have fallen 21.6% since May 2022. The index is at its lowest level since May 2021 after five straight monthly declines, each of which has been larger than the last.
Ready-Mix Concrete
The PPI for ready-mix concrete (RMC) increased 0.4% in October but, similar to steel mill products, the pace of increases has slowed each of the past three months. The index has climbed 9.1%, year-to-date, the largest October YTD increase in the series’ 34-year history.
The monthly increase in the national data was entirely driven by a 2.0% price increase in the Northeast region. Prices declined in the Midwest (-0.4%) and South (-0.3%) and were unchanged in the West.
Gypsum Building Materials
The PPI for gypsum building materials edged 0.2% lower in October—just the second monthly decrease since September 2020. The index is 45.6% higher than its January 2020 level.
Transportation of Freight
The price of truck, rail, and ocean transportation of freight each decreased in October. Trucking freight prices fell 1.4%–the fifth consecutive decline—while the indexes for rail and deep sea transportation of freight decreased 0.7% and 1.8%, respectively. Year-to-date, the prices of ocean, rail, and truck freight transportation have increased 25.2%, 6.5%, and 6.0%.
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eyeonhousing.org
Mortgage rates drop with inflation drop | Bedford Corners Real Estate
Finally, some good news: the growth rate of inflation is cooling off for now, and with the CPI inflation report being positive, the 10-year yield fell noticeably, and mortgage rates will fall with that! So, the question is, are we reaching the peak of inflation and close to the end of the Fed rate hike cycle? Let’s take a look at today’s data.
From the CPI report: The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in October on a seasonally adjusted basis, the same increase as in September, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all-items index increased 7.7 percent before seasonal adjustment.
The estimates for the CPI inflation data were for 7.9% year-over-year growth. Some people in the markets had speculated that the data would come in even hotter than anticipated —some whisper numbers were for 8.2% – 8.4% year-over-year growth. This of course led some people to believe that bond yields and mortgage rates would go much higher today.
However, the report came in at 7.7% — lower even than the forecast. As a result, mortgage rates went from 7.37% yesterday to 6.67% as of this writing.
On Thursday morning, the 10-year yield had a big rally, and bond yields headed lower (see above) and mortgage rates will be below 7% today. What a difference a year makes — now we’re excited to see mortgage rates getting below 7%! But it makes sense when you consider that over the last 52 weeks, mortgage rates have ranged from 3.14% to 7.37%.
One of my talking points with inflation data is that the biggest driver of core inflation is shelter, and this data line lags. It lagged back in August 2020 when it was still down, and it’s crawling now on the CPI data.
We already have more current data lines to show that the growth rate of inflation is cooling off. Some Federal Reserve members have commented on the fact that they know the shelter inflation data on the CPI lags — that’s a positive. Some people feared the Federal Reserve didn’t understand the lag in the CPI data, but this doesn’t appear to be the case.
So, we need to understand that the CPI shelter data lags, and the cooldown will be more of a 2023 story, especially in the second half of the year. Back in September, I went on CNBC before the CPI report came out to make this point and explain that shelter inflation did have legs to grow but the growth rate couldn’t be sustained.
Shelter CPI inflation data
As we can see in the graph below, the growth rate of shelter inflation is moving up and this has the potential to keep going higher. One thing to remember is that we have 910,000 two-unit housing that will come on line in 2023 and this will help cool the growth rate of inflation down next year. We already see the growth rate of shelter cooling off in the data lines that are more current, so this will be a positive story in 2023.
When this data line starts to cool down, it will be the biggest factor in core inflation cooling down. This is why I wrote about how we all need to root for housing completion data to get better so we get more supply into the marketplace. The best way to deal with housing inflation is more supply, and we have a lot of two-unit construction in the pipeline.
We see some inflation data cooling off recent peaks; food and energy are not part of core inflation data as they can have wild swings. As we can see below the growth rate of the Mad Max inflationary basket is cooling off, mostly due to energy prices coming off the recent highs.
Other inflationary data is also cooling off. We all know that used car prices exploded during the pandemic as supply crashed. That is already changing and has room to go lower. If you’re trying to defeat inflation by killing demand and losing jobs, you don’t have the proper supply in the market.
The history of global pandemics traditionally means supply chains are stressed for two years. Now that we are all walking the earth freely (outside of China), the production supply levels are returning to normal.
For today’s CPI report, the new vehicle price index, which also went parabolic during the pandemic, is coming down. Again, the best way to deal with inflation is to get more supply in the market.
So does this data represent a turning point? Have we seen the peak growth rate in inflation?
I would say this about this topic. Last year at this time the growth rate of a lot of inflationary data was still rising and then, on top of everything else, we had the Russian Invasion of Ukraine in February. Since then we have had massive Fed rate hikes in the system and the biggest driver of core inflation in America is set to cool down in 2023. Those facts are here today where they weren’t in November of 2021.
But, the Federal Reserve feels pressure to create a job-loss recession to get the inflation data back down toward 2% and even with today’s CPI inflation data being lower, they’re still going to push us into a job-loss recession.
I raised my sixth and final recession red flag as of Aug. 5, but I did write about two ways we could still avoid a nasty job loss recession. Here are two things that I would be looking for:
1. Rates fall to get the housing sector back in line.
Mortgage rates falling toward 5% can stabilize housing if they have duration. Traditionally, mortgage rates below 4% boost housing demand. The bleeding needs to stop and what we have seen in the data is that buyers did come into the housing market when rates got back down toward 5%.
However, 5% rates didn’t stay for long as the Federal Reserve found this to be counter-productive for their job loss recession to happen. We need to see lower rates and have it stick for some time for it to be more useful to get the housing market out of recession.
2. The inflation growth rate falls, and the Fed stops hiking rates and reverses course, as it did in 2018.
Some inflation data is already cooling off and will find its way into the data lines. However, rent inflation won’t come down in the data until 2023, even though we already see some change in that sector.
Since all my six recession flags are up, I am keeping a close eye on the jobless claims data, which rose today — this is the last data line that is preventing the economy from falling into a job-loss recession as so far, the honey badger labor market is holding up.
So for today, this is a small victory, but we will need many more months to change this economy.
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housingwire.com/articles/
Pending home sales fall 31% | Mt Kisco Real Estate
Key Highlights
- Pending home sales dropped for the fourth straight month, down 10.2% from August.
- Month-over-month, contract signings pulled back in all four major U.S. regions.
- Pending sales decreased in all regions compared to one year ago.
Pending home sales trailed off for the fourth consecutive month in September, according to the National Association of Realtors. All four major regions recorded month-over-month and year-over-year declines in transactions.
The Pending Home Sales Index (PHSI),* www.nar.realtor/pending-home-sales, a forward-looking indicator of home sales based on contract signings, slumped 10.2% to 79.5 in September. Year-over-year, pending transactions slid by 31.0%. An index of 100 is equal to the level of contract activity in 2001.
“Persistent inflation has proven quite harmful to the housing market,” said NAR Chief Economist Lawrence Yun. “The Federal Reserve has had to drastically raise interest rates to quell inflation, which has resulted in far fewer buyers and even fewer sellers.”
Yun noted that new home listings are down compared to one year ago since many homeowners are unwilling to give up the rock-bottom, 3% mortgage rates that they locked in prior to this year.
“The new normal for mortgage rates could be around 7% for a while,” Yun added. “On a $300,000 loan, that translates to a typical monthly mortgage payment of nearly $2,000, compared to $1,265 just one year ago – a difference of more than $700 per month. Only when inflation is tamed will mortgage rates retreat and boost home purchasing power for buyers.”
Pending Home Sales Regional Breakdown
The Northeast PHSI descended 16.2% from last month to 64.2, a decline of 30.1% from September 2021. The Midwest index retracted 8.8% to 80.7 in September, down 26.7% from one year ago.
The South PHSI faded 8.1% to 97.0 in September, a drop of 30.0% from the prior year. The West index slipped by 11.7% in September to 62.7, down 38.7% from September 2021.
The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
# # #
*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
Pending contracts are good early indicators of upcoming sales closings. However, the amount of time between pending contracts and completed sales is not identical for all home sales. Variations in the length of the process from pending contract to closed sale can be caused by issues such as buyer difficulties with obtaining mortgage financing, home inspection problems, or appraisal issues.
The index is based on a sample that covers about 40% of multiple listing service data each month. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.
NOTE: Existing-Home Sales for October will be reported on November 18. The next Pending Home Sales Index will be on November 30. All release times are 10 a.m. Eastern.
Information about NAR is available at nar.realtor. This and other news releases are posted in the newsroom at nar.realtor/newsroom. Statistical data in this release, as well as other tables and surveys, are posted in the “Research and Statistics” tab.
InfographicPending Home Sales: September 2022
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Case Shiller home prices up only 13.1% | South Salem Real Estate
Home prices continue to be higher than they were a year ago, but they are contracting at the fastest pace on record, according to the S&P CoreLogic Case-Shiller Home Price Index, as the housing market struggles under sharply higher interest rates.
Prices in August were 13% higher nationally compared with August 2021, according to the index, down from a 15.6% annual gain in July. The 2.6 percentage difference between the two months is the largest gap in the index’s history, first launched in 1987.
This means home prices are coming down at a record pace.
The 10-city composite, which tracks the biggest housing markets in the United States, rose 12.1% year over year in August, versus a 14.9% gain in July. The 20-city composite was up 13.1% for the month of August, compared with a 16% increase the prior month.
“The forceful deceleration in U.S. housing prices that we noted a month ago continued in our report for August 2022,” said Craig Lazzara, managing director at S&P DJI, in a statement. “Price gains decelerated in every one of our 20 cities. These data show clearly that the growth rate of housing prices peaked in the spring of 2022 and has been declining ever since.”
Miami, Tampa and Charlotte were the top three U.S. cities leading the price gains in August, with year-over-year increases of 28.6%, 28% and 21.3%, respectively. All 20 cities reported lower price increases in the year ending in August versus the year ending in July.
The West Coast saw the largest monthly declines, with San Francisco (-4.3%), Seattle (-3.9%) and San Diego (-2.8%) falling the most.
A quick jump in mortgage rates from record lows this year has seriously tamped down the once red-hot housing market. The average 30-year fixed home loan interest rate at the beginning of 2022 was about 3%. By June it was just over 6% and it is now just above 7%.
The cooling house price inflation was underscored by a separate report from the Federal Housing Finance Agency showing home prices increased 11.9% in the 12 months through August after rising 13.9% in July. Prices fell 0.7% on a monthly basis.
The Fed, staging an aggressive battle with the fastest rising inflation in 40 years, has raised its benchmark overnight interest rate from near zero in March to the current range of 3.00% to 3.25%, the swiftest pace of policy tightening in a generation or more.
That rate is likely to end the year in the mid-4% range, based on Fed officials’ own projections and recent comments.
Data last week showed sales of previously owned homes declined for an eighth straight month in September.
Read more…
Existing sales down 23%, prices up 8.4% | Waccabuc Real Estate
As rising mortgage rates continue to cool the housing market, the volume of existing home sales has declined for eight consecutive months as of September, according to the National Association of Realtors (NAR). The average 30-year fixed mortgage interest rate has increased from 3.11% at the start of the year to 6.9% this week, the highest level since April 2002, making housing less affordable. However, home price appreciation slowed for the third month after reaching a record high of $413,800 in June.
Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, fell 1.5% to a seasonally adjusted annual rate of 4.71 million in September, the lowest pace since September 2012 with the exception of April and May 2020. On a year-over-year basis, sales were 23.8% lower than a year ago.
The first-time buyer share stayed at 29% in September, consistent with August 2022 and slightly higher than 28% from September 2021. The September inventory level fell from 1.28 to 1.25 million units and was lower than 1.26 million from a year ago.
At the current sales rate, September unsold inventory sits at a 3.2-month supply, unchanged from last month and higher than the 2.4-months reading from a year ago.
Homes stayed on the market for an average of just 19 days in September, up from 16 days in August and 17 days in September 2021. In September, 70% of homes sold were on the market for less than a month.
The September all-cash sales share was 22% of transactions, down from 24% last month and 23% a year ago.
The September median sales price of all existing homes was $384,800, up 8.4% from a year ago, representing the 127th consecutive month of year-over-year increases, the longest-running streak on record. The median existing condominium/co-op price of $331,700 in September was up 9.8% from a year ago.
Geographically, three regions saw a decline in existing home sales in September, ranging from 1.6% in the Northeast to 1.9% in the South. Sales in the West remained unchanged in September. On a year-over-year basis, all four regions saw a double-digit decline in sales, ranging from 18.7% in the Northeast to 31.3% in the West.
The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell 2.0% from 90.2 to 88.4 in August. On a year-over-year basis, pending sales were 24.2% lower than a year ago per the NAR data.
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eyeonhousing.org
Mortgage rates average 6.92% | Katonah Real Estate
Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 6.92 percent.
“Rates resumed their record-setting climb this week, with the 30-year fixed-rate mortgage reaching its highest level since April of 2002,” said Sam Khater, Freddie Mac’s Chief Economist. “We continue to see a tale of two economies in the data: strong job and wage growth are keeping consumers’ balance sheets positive, while lingering inflation, recession fears and housing affordability are driving housing demand down precipitously. The next several months will undoubtedly be important for the economy and the housing market.”
News Facts
- 30-year fixed-rate mortgage averaged 6.92 percent with an average 0.8 point as of October 13, 2022, up from last week when it averaged 6.66 percent. A year ago at this time, the 30-year FRM averaged 3.05 percent.
- 15-year fixed-rate mortgage averaged 6.09 percent with an average 1.1 point, up from last week when it averaged 5.90 percent. A year ago at this time, the 15-year FRM averaged 2.30 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 5.81 percent with an average 0.2 point, up from last week when it averaged 5.36 percent. A year ago at this time, the 5-year ARM averaged 2.55 percent.
The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. 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.
NOTE: Freddie Mac is making a number of enhancements to the PMMS to improve the collection, quality and diversity of data used. Instead of surveying lenders, the weekly results will be based on applications received from thousands of lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage. Additionally, we will no longer publish fees/points or adjustable rates. The newly recast PMMS will be put in place in November 2022, and the weekly distribution will be Thursdays at 12 p.m. noon ET.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.
Building Materials Prices Decline in September | Bedford NY Real Estate
The prices of building materials decreased 0.3% in September (not seasonally adjusted) according to the latest Producer Price Index (PPI) report. The PPI for goods inputs to residential construction, including energy, declined for the third consecutive month in September (-0.1%). Prices have fallen 2.3% since June, the largest three-month drop since April 2020.
The price index of services inputs to residential construction decreased 0.8% in September, driven by lower building materials wholesalers’ margins and freight transportation prices. Services prices have declined each of the last six months by a combined 12.4% and are at the lowest level since 2021. Despite the six-month decline, the PPI for services inputs to residential construction is 3.3% higher than it was in September 2021.
Softwood Lumber
The PPI for softwood lumber (seasonally adjusted) declined 2.9% in September following a 5.2% drop in August. Softwood lumber prices are 14.5% higher than they were a year ago but have fallen 39.6% since March. The index remains 41.9% above pre-pandemic levels.
Steel Mill Products
Steel mill products prices decreased 6.7% in September and have fallen 16.1% over the past four months. The index is at its lowest level since June 2021, but prices of steel mill products are nearly double their pre-pandemic levels, on average.
Ready-Mix Concrete
The PPI for ready-mix concrete (RMC) increased 1.4% in September—its sixth consecutive increase—and has risen 11.6% over the past year. The index has climbed 8.9%, year-to-date, the largest September YTD increase in the series’ 34-year history.
The monthly increase in the national data was primarily driven by a 2.6% price increase in the South region and partially offset by a 0.7% decline in the Northeast. Prices were flat in the Midwest and edged 0.3% higher in the West.
Gypsum Building Materials
The PPI for gypsum building materials edged 0.2% lower in September—just the second monthly decrease in two years. Prices have increased 20.2% over the past year and are up 46.0% since January 2020.
Transportation of Freight
The price of truck transportation of freight decreased 0.4% in September following a 1.9% decline in August. Prices have fallen 3.1% over the past four months, driven lower by a 4.5% decline in the price of long-distance motor carrying. Over the same period, the PPI for local motor carrying increased 1.4%.
Year-to-date, the prices of ocean, rail, and truck freight transportation have increased 22.4%, 7.7%, and 8.0%, respectively.
read more…
eyeonhousing.org
Mortgage Credit Availability At Lowest Level In 9 Years | Pound Ridge Real Estate
Fell to the lowest level since March 2013, following seven straight months of tightening credit.
KEY TAKEAWAYS
- A decline in the MCAI indicates that lending standards are tightening.
Mortgage credit availability decreased in September, falling by 5.4% to 102.5, its lowest level in nine years.
That’s according to the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI), a report that analyzes data from ICE Mortgage Technology.
A decline in the MCAI indicates that lending standards are tightening, while increases in the index indicate loosening credit. The index was benchmarked to 100 in March 2012.
The Conventional MCAI decreased 4.9%, while the Government MCAI decreased by 5.7%. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 5.8%, while the Conforming MCAI fell by 3.6%.
“Credit availability fell to the lowest level since March 2013 — the seventh consecutive month of tightening,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “With the likelihood of a weakening economy, which would lead to an increase in delinquencies, there was a smaller appetite for lower credit score and high LTV (loan-to-value) loan programs, along with a reduction in government streamline refinance programs. As mortgage rates have more than doubled over the past year, resulting in a drop in refinance activity, lenders have worked to reduce excess capacity and costs by eliminating underutilized loan programs.”
Kan added that all of the MCAI’s component indices declined last month, “with most of the indices falling to their lowest levels in over a year. In particular, the government credit availability index has declined in seven of the last eight months to its lowest level since April 2013.”
Credit availability continued to trend downwards and hit a new low, beating July’s 9% drop to 108.8 and August’s 0.5% drop to 108.3.
read more…
nationalmortgageprofessional.com
Mortgage rates average 6.7% | North Salem Real Estate
Freddie Mac today released the results of its Primary Mortgage Market Survey®, showing that the 30-year fixed-rate mortgage (FRM) averaged 6.70 percent.
“The uncertainty and volatility in financial markets is heavily impacting mortgage rates,” said Sam Khater, Freddie Mac’s Chief Economist. “Our survey indicates that the range of weekly rate quotes for the 30-year fixed-rate mortgage has more than doubled over the last year. This means that for the typical mortgage amount, a borrower who locked-in at the higher end of the range would pay several hundred dollars more than a borrower who locked-in at the lower end of the range.”
Khater continued, “The large dispersion in rates means it has become even more important for homebuyers to shop around with different lenders.”
News Facts
- 30-year fixed-rate mortgage averaged 6.70 percent with an average 0.9 point as of September 29, 2022, up from last week when it averaged 6.29 percent. A year ago at this time, the 30-year FRM averaged 3.01 percent.
- 15-year fixed-rate mortgage averaged 5.96 percent with an average 1.3 point, up from last week when it averaged 5.44 percent. A year ago at this time, the 15-year FRM averaged 2.28 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 5.30 percent with an average 0.4 point, up from last week when it averaged 4.97 percent. A year ago at this time, the 5-year ARM averaged 2.48 percent.
The PMMS is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. 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.
NOTE: Freddie Mac is making a number of enhancements to the PMMS to improve the collection, quality and diversity of data used. Instead of surveying lenders, the weekly results will be based on applications received from thousands of lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage. Additionally, we will no longer publish fees/points or adjustable rates. The newly recast PMMS will be put in place in November 2022, and the weekly distribution will be Thursdays at 12 p.m. noon ET.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.