Shelter Six:  Stellar Housing Rebound Continues

September 28, 2020 by · Leave a Comment 

The spectacular housing rebound continued in August with both Existing-Home and New-Home Sales hitting the highest levels since 2006.

Existing-Home Sales were up 2% from July and 11% from last year, while New-Home Sales were up 5% from July and 43% from last year.

Extremely limited inventory remains the primary trouble spot as levels were down 19% from a year ago to a 3-month supply nationally, which was the lowest level since 2004.

Lack of inventory and surging lumber prices continue to drive up home prices, which were up 11% nationally in August from a year ago.

Mortgage forbearance figures continue to dwindle and are down to a five-month low of 6.8% of all mortgages, per Black Knight as of Sept 22.

Starting Oct 1, there will be potential temporary lapses with both the USDA Rural Housing Program and the National Flood Insurance Program.

Rate Update

Mortgage Rates were flat last week near record lows and will most likely hold steady until good news regarding the pandemic emerges.

This Week

Employment figures are the most highly anticipated economic data of the month and are due out on Friday.

Shelter Six:  Federal Reserve Pledges to Keep Rates Low

September 21, 2020 by · Leave a Comment 

There were few surprises from last week’s Federal Reserve meeting as the Fed reiterated it does not plan to raise short-term rates over the next couple of years.

The steady recovery in consumer spending continues with August Retail Sales figures rising a solid .6% from July and now up 3% over last year.

The National Association of Home Builders (NAHB) reported that builder confidence in the new-home market hit an all-time high for the second month in a row in September.

August Housing Starts declined 5% from July, but the weakness was entirely due to a 23% decline in multi-family units, which are very volatile from month to month.

Single-family Housing Starts actually increased 4% from July, and single-family Building Permits, a leading indicator of future construction, rose 6% from July.

Rising cost of lumber and delays for building materials, however, threaten to slow down new construction (lumber prices are up more than 170% since mid-April, adding more than $16K to typical new-home price).

Rate Update

Last week’s economic data and Federal Reserve meeting had little impact on mortgage markets, and rates again held steady around 3% levels.

This Week

It will be a very light week for economic data with Existing Home Sales due out on Tuesday, New Home Sales on Thursday, and Durable Orders on Friday.

Shelter Six:  Home Buyers and Sellers More Optimistic

September 14, 2020 by · Leave a Comment 

Both home buyers and sellers reported greater optimism in Fannie Mae’s August Home Purchase Sentiment Survey.

Respondents indicating that it is a good time to buy increased from 53% to 59%, while respondents indicating that it is a good time to sell increased from 45% to 48%.

Despite recent Unemployment stats, respondents had little concern about job security with 78% reporting they were not concerned about losing their job (up 2% from July).

Inflation reports came in a little higher than expected last week, but were still far below the readings from the first few months of the year prior to the pandemic.

About 6M homeowners have been in forbearance at some point over the last six months and about 2M have now exited with only about 7% still in forbearance.

Self-employed borrowers pursuing a mortgage are now facing additional steps, including a YTD P&L, bank statements that support income, and a written business analysis.

Rate Update

Freddie Mac has been tracking rates since 1971 and last week’s were the lowest ever reported with the 30-year at 2.86% with .8 points, and the 15-year at 2.37% with .7 points.

This Week

The Fed meets on Wednesday. Retail Sales will also be released on Wednesday and Housing Starts on Thursday.

Shelter Six:  Strong Economic Data Continues to Roll In

September 7, 2020 by · Leave a Comment 

The faster-than-expected economic rebound continues as last week’s economic data again came in stronger than anticipated.

In August, the economy added a massive 1.37M new jobs and Unemployment dropped from 10.2% to 8.4%.

Strong reports also came out for both the manufacturing and services industries, while weekly Jobless Claims declined to the lowest level since the pandemic started.

According to CoreLogic, home prices grew in July by the fastest rate in nearly two years, up 1.2% from June and 5.5% from last July.

Forbearance figures have flattened out and are now holding steady in the 7% range after peaking around 9% in June, and there has been no uptick after the Fed’s unemployment insurance benefits expired.

Temporary underwriting flexibilities on things such as verifications of employment and exterior-only appraisals have been extended again for several more months.

Rate Update

The 30-year Conforming rate continues to hover around and slightly under 3%. Expect more or the same as long as the Fed keeps buying bonds.

This Week

The Consumer Price Index, the most widely followed monthly inflation report, is due out on Friday.