Category Archives: Home builders

Auction Fever Heats Up Home Sale Prices

Posted To: MND NewsWire

The bidding wars are back . With home prices and sales back to or above pre-crisis levels and the inventory of available homes at records lows, CoreLogic’s Shu Chen says that a large and increasing share of homes sold at or above their listing prices in 2017. In September that share was back to early 2004 levels, up almost three times from the 2008 level . Those at-and-above list sales represented more than one-fifth of all transactions. Of course, under the “all real estate is local” rule, there is a wide range in the level of bidding activity. In San Francisco 76 percent of sales were at the asking price or higher , while in Miami only 16 percent of sales reflected pressure from buyer bidding. Of the 16 Core-Based Statistical Areas (out of the 66 CoreLogic tracked) in Figure 2, the top five…(read more)

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A Request; Should Fannie and Freddie Update Their Credit Requirements?

Posted To: MND NewsWire

There is a rather unusual request up on the Federal Housing Finance Agency’s (FHFA’s) website. Two FHFA analysts, saying that the issue of updating the credit score requirements for Fannie Mae and Freddie Mac (the GSEs) is among the most difficult they have faced, are personalizing an earlier formal Request for Input (RFI) published in the Federal Record. Robert M. Dunsky, Principal Financial Engineer, and Elizabeth R. Spring, Senior Policy Analyst, from the Offices of Housing & Regulatory Policy and Policy Analysis & Research respectively wrote the request. They explain that the GSEs currently use the Classic FICO model, supplementing it with their own automated underwriting systems (AUS) where no credit score is available for a borrower. FHFA believes an update to the GSE credit score…(read more)

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Builder Confidence Down From 18-Year High, Still Strong

Posted To: MND NewsWire

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which hit an 18-year high in December, backed off a bit this month . NAHB said the composite index, a measure of builder confidence in the market for new homes, was down 2 points from that new peak to 72. All three of the Index components moved down slightly. “Builders are confident that changes to the tax code will promote the small business sector and boost broader economic growth ,” said NAHB Chairman Randy Noel. “Our members are excited about the year ahead, even as they continue to face building material price increases and shortages of labor and lots.” Analysts had expected a slight decline in the index after its five-point surge in December. Those polled by Econoday had a consensus of 73, with a…(read more)

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Housing Demands are Changing, Builders Slow to Follow

Posted To: MND NewsWire

Builders are building more houses, but a survey conducted by the National Association of Home Builders (NAHB) found they are essentially building the same ones . The survey, released during the association’s International Builders’ Show last week, found the size and configuration of homes built in 2017 changed little from the previous year , even though builders increased their output by 9 percent. Home sizes had been trending down , but they were up ever so slightly last year, from 2,622 square feet (SF) in 2016 to an average of 2,627 SF in 2017. Forty-six percent of homes had four bedrooms and 37 percent had at least three full baths compared to 45 percent and 35 percent respectively in 2016. Home builders continue to battle problems of affordability due to the scarcity of buildable lots…(read more)

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Mortgage Rates Avoid More Dire Outcomes After Inflation Report

Posted To: Mortgage Rate Watch

Mortgage rates caught a break yesterday by moving lower for the first time this week. They arguably caught a break again today by not moving any higher than they did. Underlying bond markets (which drive mortgage rate changes) were rocked this morning by stronger inflation data. The important Consumer Price Index (CPI) was expected to hold steady at the same low levels that have persisted since the middle of 2017. The modest uptick in inflation sent bond yields higher and resulted in most mortgage lenders putting out noticeably higher rates this morning. Lenders don’t like to put out more than one rate sheet per day if they can help it, but if markets move enough, they will “reprice.” After the initial trauma, bond markets began a trend of improvement that ultimately resulted in widespread…(read more)

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Broker News; Mergers/Acquisitions; Guild to Buy Cornerstone

Posted To: Pipeline Press

Plenty of people tell me that I’m “long in the tooth.” (A way of gauging a horse’s age.) Tooth? Thanks to Emily W. for sending in something that all of us have probably wondered about, even though you weren’t aware that you were wondering about it: an article on the origin of “Bluetooth,” “eBay,” “Google,” and other terms and names. Nomenclature, and technology, are always changing. The car business certainly changes, and it appears that with the recent Toyota/Mazda plant announcement, foreign auto manufacturers are on a path to soon surpass the Detroit giants as the largest auto producers in the US by volume! Foreign automakers and their US competitors are expected to produce the same number of vehicles in the US for the first time ever in 1Q18. Broker News -…(read more)

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New Home Sales Defy Holiday Lull, Rising in December

Posted To: MND NewsWire

Despite the usual holiday lull in overall mortgage applications, the demand for newly constructed homes increased in December. The Mortgage Bankers Association (MBA) said its Builder Applications Survey (BAS) found those applications were up 18 percent from November. The change does not include any adjustment for typical seasonal patterns. The applications were 7.8 percent higher than in December 2016. Based on data from the BAS, conducted among mortgage subsidiaries of new home builders, augmented by assumptions about market coverage and other factors, MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 554,000 units in December. This is a decline of 16.4 percent from the November pace of 663,000 units. On an unadjusted basis, there were an estimated…(read more)

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Mortgage Applications Heat Up After Holiday Lull

Posted To: MND NewsWire

Mortgage application activity roared out of the gate in the first week of the New Year, as the country got back down to business. Much of the week’s gain could probably be attributed to consumers catching up after the usual holiday induced December slowdown. Applications for both refinancing and home purchasing were up substantially during the week ended January 5. It was, in fact, the strongest week for refinancing applications since mid-July. The Mortgage Bankers Association said its Market Composite Index, a measure of loan applications volume, increased 8.3 percent on a seasonally adjusted basis and rose 46 percent compared with the week ended December 29 on an unadjusted basis. The week’s report included an adjustment to account for the New Years Holiday. MBA said there was also a revision…(read more)

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Lending Standards Becoming Tight For Government Loans

Posted To: MND NewsWire

A decline in each of its four component indices, especially the one measuring the availability of government-backed loans, drove overall mortgage credit availability lower in December according to the Mortgage Bankers Association (MBA). The group’s Mortgage Credit Availability Index (MCAI) dropped by 1.8 percent to a reading of 179.2. A decline in the MCAI indicates tightening lending standards while an increase is indicative of loosening credit. The component measuring credit available in the government sector was down 2.6 percent in December. The Government MCAI has been trending down for most of 2017 after peaking at about 450. The index now appears, (MBA provides only percentages and graphs for the components, not numbers) to be around 430. The Conventional MCAI was also down, by 0.7 percent…(read more)

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MBS Day Ahead: Still Waiting for a Break of the Holiday Consolidation

Posted To: MBS Commentary

Not to be confused with the consolidative trend seen in Q4, 2017, there’s been a slightly more negative consolidation underway in the last few weeks. If it’s not adequately implied by the verbiage, a consolidation refers to prices or yields getting closer together . On a chart, this often takes the form of “lower highs” and “higher lows.” That said, it can also take the form of “ascending lows” and “less rapidly ascending highs,” as is the case in bond markets currently. You might look at the chart above and think that the upper line could , in fact, be drawn from the highs of December, and thus fill the role of the “lower highs” trendline discussed above. That would technically be OK, but 9 out of 10 technicians agree that lines with…(read more)

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