Archive for September 23rd, 2013

September Builder Confidence Falters

September Builder Confidence Falters

09/17/2013 BY: MARK LIEBERMAN, FIVE STAR INSTITUTE ECONOMIST

The Housing Market Index (HMI), a measure of builder confidence, stalled at 58 in September, unchanged from August’s downwardly revised reading, the National Association of Home Builders reported Tuesday.

The August confidence reading had originally been 59. Economists surveyed by Bloomberg had expected the index to remain at that level.

But a dip in one of the three index components – the outlook for new home sales six months out – pulled the index. It was the first time since May the index has not registered a month-month gain.

But while the national index was unchanged for September, the index reading for the Midwest rose to a record high 66 – the second consecutive record-setting month for that Census region. The reading for the South hit the highest level. 58, since March 2006. While NAHB’s national survey began in January 1985, the regional readings began in December 2004. The index for the West rose three points to 62, the highest it has been since May 2006. The index for the Northeast rose six points to 45, also the highest since May 2006.

The downward revision for August marked the second straight month in the index for a prior month was reduced. The July index was revised down to 56 from the originally reported 57.

The index consists of three components: a gauge of current new single family home sales, sales six month out and buyer traffic. The outlook for sales six months forward dipped three points in September to 65, its lowest level since June and the first decline in any of the components since April.

The outlook for current sales was unchanged in September at 62 and buyer traffic rose one point to 47.

The overall index is up18 points from September 2012, the 27th month of year-year improvement. The outlook for current sales is up 20 points in the last year, for future sales up 14 points and buyer traffic up 17 points.

The survey comes as new single family home sales and prices of those homes have been stalling. In the most recent report from the Census Bureau and the Department of Housing and Urban Development, new single family home sales – contracts – were down 13.4 percent in one month and the median price of a new single family home fell for the third straight month. The pace of new home sales has dropped in three of the last five months.

Homebuyers have reacted to higher mortgage interest rates and generally higher prices for existing single family homes. Buying activity has also been constrained by weak job and personal income growth.

Permits for new single family construction and single family starts also fell in the most recent Census-HUD report though multi-family activity improved.

Census and HUD will report on August new home sales on September 25 and will report August housing permits and starts Wednesday.

The HMI, built based on surveys conducted jointly by the NAHB and Wells Fargo, gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

2013
09/23
CATEGORY
Home sales
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Consumers Respond to Housing Trends with Cautious Optimism

Consumers Respond to Housing Trends with Cautious Optimism

09/11/2013 BY: TORY BARRINGER

The housing market recovery is finally starting to slow—and consumers across the country have picked up on it, according to findings in Fannie Mae’s August 2013 National Housing Survey.

“Consumer attitudes are proving consistent with recent slowing housing market trends, indicating that they are well-attuned to the direction in which the housing market is moving,” Fannie Mae said in its monthly release. “Americans’ outlook on housing growth—which has been trending upward since the beginning of the year—has hit a plateau, likely due to concerns regarding the potential tapering of the Federal Reserve’s asset purchases.”

The survey shows more people are optimistic about price gains over the next year (55 percent, up from 53 percent), though the average expected gain has pulled back slightly to 3.4 percent (compared to July’s high of 3.9 percent). The share of people expecting prices to fall bounced up to 7 percent from July’s low of 6 percent.

Sixty percent of respondents said they think mortgage rates will continue to increase over the next 12 months, down from the survey high of 62 percent.

Forty-six percent—a slight improvement over July—said they believe it would be easy for them to get a home mortgage today, though 53 percent—again, up slightly—said it would be difficult.

On the finance side: The share of respondents who said they economy is on the right track decreased from 40 percent in July to 37 percent in August. Meanwhile, 57 percent said the economy is on the wrong track.

The percentage of respondents who said their household income is significantly higher than it was last year fell 3 percentage points from July’s survey high to 23 percent, while the percentage of those whose income has decline increased a single point to 17 percent. Thirty-two percent said their household expenses have increased.

Looking forward, 44 percent of respondents expect their personal financial situation to improve over the next 12 months, just slightly better than the share who expect their situation to stay about the same (43 percent). Twelve percent expect their situation to deteriorate.

2013
09/23
CATEGORY
Housing Market
Mortgage
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Single Family Starts, Permits Gain in August

Single Family Starts, Permits Gain in August

09/18/2013 BY: MARK LIEBERMAN, FIVE STAR INSTITUTE ECONOMIST

Led by the strongest gain for single-family construction this, year, the pace of housing starts edged up 0.9 percent in August, the Census Bureau and Department of Housing and Urban Development reported Wednesday. Total housing permits though declined 4.8 percent despite a surge in filings for single-family homes.

Builders broke ground in August on new homes at the seasonally adjusted annual rate of 891,000, up from a revised 883,000 in July and filed for permits at the seasonally adjusted annual rate of 918,000, down from 954,000 in July. Economists surveyed by Bloomberg expected the report to show a rate of 915,000 starts and 950,000 permits.

The rate of housing permits for July was revised up to 954,000 from the originally reported 943,000 and the pace of July housing starts was revised down to 883,000 from the originally reported 896,000.

According to the report, builders completed homes at the rate of 769,000 homes in August up slightly from 767,000 pace in July. The July completion rate was revised down from the originally reported 774,000

Permits for single-family homes represented 68.3 percent of all permit activity in August, the highest share since September 2011. The rate of 627,000 single-family permits in August was the strongest since May 2008.

The rate of single-family starts rose to 891,000 in August from 883,000 in July, the third month-month gain in the last four months. Single-family starts represented 70.5 percent of all starts, the second highest share in the last year. Single-family starts were 71.7 percent of all starts in August 2012 and 72.5 percent two months ago in June.

The gain in single-family starts overwhelmed the drop in multifamily activity. The rate of starts for multifamily homes fell 33,000 in August to 263,000, an 11.1 percent decline. The pace of multifamily permits dropped 54,000, or 15.7 percent in August to 291,000.

The gain in both single-family permits and starts came amidst signs of improving builder confidence. According to the National Association of Home Builders’ Housing Market Index (HMI), builder confidence in August was 58 (on 100 point scale), its highest level since November 2005. The index for September, reported Tuesday was unchanged at 58, the first time since April the index has not shown a month-to-month improvement.

Despite the month-to-month improvement in single-family activity in August, the longer term trend continues the shift in building activity to multifamily housing. Single-family starts have averaged about 67.6 percent of all starts in the last 12 month, down from 69.3 percent in 12 months ended August 2012 and 74.7 percent in the previous 12 months.

In the last 12 months, the average single-family permits averaged 63.8 percent of total permits, down slightly from 64.1 percent in the 12 months ending August 2012 and 69.7 percent in the 12 months ending August 2011

In July, according to a separate Census-HUD report, new homes totaled 394,000, 176,000 fewer than the 570,000 completions that month. New home sales for August will be reported next week.

The pace of total starts rose in August in only one of the four Census regions, improving by 47,000 in the South to 439,000 from 392,000 in July. Builder confidence in the South, according to NAHB’s HMI, rose in August to its highest level since April 2006.

The rate of total starts fell 25,000 in the West to 204,000, dropped 9,000 in the Northeast to 101,000 and slipped 5,000 in the Midwest to 147,000 despite record high builder confidence in the Midwest.

Single-family starts rose in all regions led by a gain of 22,000 in the West to a seasonally adjusted pace of 148,000. In each of the South and the Midwest the rate of single-family starts rose 7,000 to 317,000 and 106,000 respectively and in the Northeast the pace went up 5,000 to 57,000.

The annualized rate of all permits plunged 46,000 in the South to 413,000 in Augusts and fell also in the West, dropping 9,000 to 219,000. The rate of permit filings for all homes rose 12,000 in the Northeast to 125,000 and improved 7,000 in the Midwest to 161,000.

The pace of permits for single-family homes rose in three of the four regions led by a gain of 8,000 in the South to 330,000. The rate of permit filings improved 7,000 in the West to 140,000 and 3,000 in the Midwest to 107,000. The pace of single-family permit filings was unchanged in August at 50,000.

2013
09/23
CATEGORY
Real Estate
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Wolters Kluwer Completes Svenson Acquisition from SmartStream

Wolters Kluwer Completes Svenson Acquisition from SmartStream

BY: CARRIE BAY

Minneapolis-based Wolters Kluwer Financial Services announced Monday that it has completed the acquisition of Svenson, a regulatory reporting software suite for financial institutions, which is based in Austria. Terms of the deal were not disclosed.

Svenson was part of SmartStream, a provider of financial transaction management solutions. The Svenson product suite complements the existing Wolters Kluwer Financial Services offering for regulatory reporting, as well as the company’s risk and finance management offerings.

Wolters Kluwer Financial Services provides compliance, risk management, finance, and audit solutions for the worldwide financial services industry.

The company assists more than 15,000 customers globally in navigating regulatory complexities, optimizing risk and financial performance, and managing data to support decision-making. Wolters Kluwer has more than 30 offices in 20 countries and 19,000 employees worldwide.

 

2013
09/23
CATEGORY
Financial Markets
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Redfin Predicts Volatile Housing Market

Redfin Predicts Volatile Housing Market

BY: HUGH MOORE

The housing market has lost some of its momentum recently according to a new study by the Redfin Research Center. Pent-up demand and low mortgage rates contributed to a robust real estate market since the beginning of the year, but higher prices and higher rates have diminished demand in recent months.

“In August, 26.4 percent of active listings had their prices lowered, the highest in four years,” said Tommy Unger, the report’s author. “With buzz of a strong housing market and home prices on the rise, sellers had unrealistic expectations about the price they could get for their home. With the relatively sudden softening in buyer demand, many sellers had to ultimately reduce their prices.”

Unger predicts that mortgage rates will play the central role in determining housing prices moving forward.

“We expect mortgage rates may show volatility this autumn as the Federal Reserve weighs whether to begin tapering its stimulus program,” Unger said. “If rates do rise sharply in September and October, buyers are likely to temporarily step out of the market. This probably would lead prices and sales to dip sharply around the holiday season. If rates remain stable, however, we would expect prices to flatten this autumn and sales to wind down slowly as the holiday season nears. Inventory, on the other hand, is likely to slowly drop in line with seasonal trends.”

2013
09/23
CATEGORY
Home Prices
Housing Market
Mortgage
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