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ATTOM - U.S. foreclosure activity up 13 percent in january 2020, 2nd consecutive month-over-month increase

Feb 20, 2020
There were 60,085 U.S. properties with foreclosure filings in January 2020, up 13 percent from December 2019 and up 7 percent from a year ago. Nationally, one in every 2,270 U.S. properties received a foreclosure filing during the month of January. Counter to the national trend, 16 states posted month-over-month decreases in foreclosure activity in January 2020. Including Iowa (down 44 percent); Oregon (down 28 percent); Nevada (down 28 percent); Louisiana (down 24 percent); and Washington (down 20 percent). ATTOM’s Foreclosure Market Trend Reports offer a detailed look at foreclosure data. Lenders started the foreclosure process for the first time on 26,858 property owners in January 2020, down less than 1 percent from the previous month but down 9 percent from a year ago. Counter to the national trend, 19 states posted year-over-year increases in foreclosure starts, including California (up 27 percent); Tennessee (up 21 percent); Georgia (up 14 percent); Illinois (up 9 percent); and Ohio (up 3 percent). Also, counter to the national trend, 75 of 220 metro areas analyzed posted year-over-year increases in foreclosure starts, including San Antonio, Texas (up 66 percent); Los Angeles, California (up 63 percent); Riverside, California (up 22 percent); Nashville, Tennessee (up 19 percent); and Chicago, Illinois (up 14 percent). States with the worst foreclosure rates in January 2020 were New Jersey (one in every 1,046 housing units); Delaware (one in every 1,098 housing units); Illinois (one in every 1,139 housing units); Maryland (one in every 1,507 housing units); and Ohio (one in every 1,517 housing units).

Among 220 metropolitan statistical areas with at least 200,000 people, those with the worst foreclosure rates in August were Atlantic City, New Jersey (one in every 703 housing units); Rockford, Illinois (one in every 726 housing units); Peoria, Illinois (one in every 952 housing units); Fayetteville, North Carolina (one in every 957 housing units); and Trenton, New Jersey (one in every 984 housing units). Among 53 metro areas with at least 1 million people, those with the highest foreclosure rates in January were Chicago, Illinois (one in every 1,027 housing units); Cleveland, Ohio (one in every 1,029 housing units); Philadelphia, Pennsylvania (one in every 1,072 housing units); Jacksonville, Florida (one in every 1,144 housing units); and Riverside, California (one in every 1,189 housing units). Lenders repossessed 20,759 U.S. properties in January 2020 (REO), up 49 percent from the previous month and up 70 percent from a year ago, following the holiday season. Counter to the national trend, those metropolitan areas with a population greater than 200K that saw a month-over-month decrease included Cleveland, Ohio (down 40 percent); San Antonio, Texas (down 28 percent); Las Vegas, Nevada (down 27 percent); Dallas, Texas (down 26 percent); and Atlanta, Georgia (down 24 percent).

Tesla roars above $900 as solar sales light up prospects
Telsa shares zoomed back above $900 on Wednesday after a Wall Street analyst awarded the stock one of its highest price targets yet. The Palo Alto, California-based company's odds of success in the battery and solar-power industry prompted the investment bank Piper Sandler to set a 12-month price forecast of $928. “After logging 53,448 miles and surviving four Minnesota winters (with no noticeable range degradation), we are convinced that Tesla's automotive products offer a superior ownership experience,” analyst Alexander Potter wrote while raising his price target from $729. “If history is any indication, we'll eventually be saying something similar about generating and storing our own solar power.” While batteries and solar power amounted to just 6 percent of Tesla’s sales in 2019, management has said its revenue will eventually rival that of the automotive business. Potter says it’s “tough to ignore” the size of the addressable market for Tesla’s integrated solar roof, which is about $165 billion a year. The market’s size increases by another $70 billion per year when taking into account the cost of two Powerwalls, the company's home batteries, for each new solar roof. Wednesday’s gains have stretched Tesla’s year-to-date growth to more than 105 percent, putting extreme pressure on short-sellers, or traders betting that shares would fall.

MBA - mortgage applications decrease
Mortgage applications decreased 6.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending February 14, 2020. The Market Composite Index, a measure of mortgage loan application volume, decreased 6.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week and was 165 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 10 percent higher than the same week one year ago. "Treasury yields moved slightly higher last week, despite uncertainty surrounding the economic impact from the spread of the coronavirus. The 30-year fixed mortgage increased five basis points to 3.77 percent as a result, causing refinance applications - driven by a 11 percent drop in applications for conventional refinances - to fall," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Even with an 8 percent decline, the refinance index was still at its third highest reading so far this year. Government refinance activity, which tends to lag movements in the conventional market, bucked the overall trend, as VA loan refinances jumped 23 percent." Added Kan, "Purchase applications fell 3 percent last week, as there continues to be some pullback after a strong January. Activity was still 10 percent higher than a year ago, but too few options - especially at the lower portion of the market - are slowing some would-be buyers."

The refinance share of mortgage activity decreased to 63.2 percent of total applications from 65.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4 percent of total applications. The FHA share of total applications decreased to 9.5 percent from 9.7 percent the week prior. The VA share of total applications increased to 12.1 percent from 10.1 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.77 percent from 3.72 percent, with points remaining unchanged at 0.28 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.79 percent from 3.75 percent, with points increasing to 0.19 from 0.17 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.86 percent from 3.84 percent, with points decreasing to 0.24 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 3.22 percent from 3.20 percent, with points decreasing to 0.26 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 5/1 ARMs increased to 3.23 percent from 3.21 percent, with points increasing to 0.21 from 0.13 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

Judge tosses Huawei lawsuit against US government ban
U.S. District Judge Amos L. Mazzant dismissed a Huawei lawsuit that challenged a congressional defense bill banning federal agencies and contractors from buying products from the Chinese telecom giant. Huawei claimed that the ban was overbroad, that its due process rights were violated and that Congress was motivated by an intent to punish it and another Chinese telecom company, ZTE. At issue is the 2019 National Defense Authorization Act, which was signed into law by President Trump in 2018. Mazzant disagreed with Huawei's claims in a Tuesday order. "What Huawei pejoratively labels as Congress unconstitutionally adjudicating facts is better characterized as a thorough congressional investigation into a potential threat against the nation’s cybersecurity," the judge wrote. "Congress's investigation led to the passing of a defense-appropriations bill as a prophylactic response to that threat." Huawei may appeal the decision in the New Orleans federal appeals court.

NAHB - housing production shows solid start to 2020
Total housing starts decreased 3.6% in January from an upwardly revised December reading to a seasonally adjusted annual rate of 1.57 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department. Meanwhile, overall permits surged to a 13-year high. The January reading of 1.57 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts decreased 5.9% to a 1.01 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 0.7% to a 557,000 pace. “The housing recovery continues, as single-family housing starts have surpassed one million for the second consecutive month and multifamily production has been running above 500,000 for the same period,” said NAHB Chairman Dean Mon, a home builder and developer from Shrewsbury, N.J. “Meanwhile, builder confidence remains solid as demand continues to pick up.” “While the solid pace for residential construction continues, favorable weather conditions may have accelerated production in the winter months,” said Nanayakkara-Skillington, NAHB’s Assistant Vice President of Forecasting and Analysis. “At the same time, the growth in permits is a harbinger that that market will continue to move forward in the coming months, even as builders grapple with supply-side issues like excessive regulations, labor shortages and rising material costs.” Regionally in January, combined single- and multifamily housing production increased 31.9% in the Northeast and 1.2% in the West. Starts fell 25.9% in the Midwest and 5.4% in the South. Overall permits, which are a harbinger of future housing production, increased 9.2% to a 1.55 million unit annualized rate in January. This is the highest level since March 2007. Single-family permits increased 6.4% to a 987,000 rate while multifamily permits increased 14.6% to a 564,000 pace. Looking at regional permit data, permits are 34.6% higher in the Northeast, 8.2% higher in the Midwest, 8.0% higher in the South and 3.1% higher in the West.

'Severe' blue-collar worker shortage to worsen as baby boomers retire
Blue-collar industries like manufacturing and construction are facing a "severe" worker shortage that will only get worse as young people fail to fill positions vacated by retiring baby boomers. That's according to an 85-page report by the nonprofit business research group Conference Board, which blamed a "perfect storm" of longterm trends. Young people, the authors say, are turning to college for white-collar job opportunities rather than trade school or apprenticeship opportunities in agriculture, mining, manufacturing, construction and transportation. At the same time, many baby boomers, who make up much of the blue-collar labor market, have reached retirement or are on their way to retirement. "While a lot has been written about the overall tightness of the labor market, much less has been written about severe labor shortages of blue-collar and manual services workers --- the exact opposite of the trends in recent decades," Gad Levanon, vice president of labor markets at The Conference Board, said. "This shortage is no coincidence but a result of several long-run demographic and educational trends that converge in a perfect storm like fashion, and that could make these shortages even more severe in the coming decades," Levanon said. "These shortages are a much more immediate and important problem than the risk of massive unemployment due to robots taking our jobs at some point in the future." The labor force participation rates for men ages 25 to 34 have seen a significant downturn since 1995, shows the study, which surveyed more than 200 human resources executives.

Demand for blue-collar workers continues to grow, in part because of a slowdown in labor productivity, according to the Conference Board. The number of U.S. citizens who qualify as disabled between the working ages of 25 and 64 has also reached a record high. The heaviest concentrations of disability appear along the Rust Belt and the industrial South, the study found. Additionally, young men are leaving the blue-collar workforce for white-collar opportunities after college. As a result, the number of blue-collar workers in the U.S. directly correlates with the number of people who hold a bachelor's degree. The participation of 16-24-year-old men who work blue-collar jobs that require little experience or education has dropped by about 10 percent since 1995, the study showed. This is seen as a positive trend by societal standards because it means more young people are getting a higher education, despite the fact that blue-collar jobs often hold the promise of high wages and steady work due to increasing demand. Nearly a quarter of young men without a college degree, however, still live at home with their parents, the study noted. "I think there is some stigma associated with manual labor," Levanon said. "The American dream and the entire education system is geared towards completing a four-year college. Also, the significant improvement in the labor market outlook for blue-collar workers is not common knowledge yet. I would argue that you still hear and read more about how robots will steal many of our jobs than you hear about labor shortages." As men leave blue-collar industries, more and more women aged 25 to 54 are joining the labor force --- but not enough to make a significant difference in these industries, the study found. Potentially increasing costs and quality of blue-collar services is now more of a concern than it was in the past because employers are more willing to hire candidates that are not qualified for the job or have been out of the labor market for years, according to the study. "Without a concerted effort by companies and governments, the nation’s overall standard of living will decline, along with profits in blue-collar-heavy industries such as transportation, warehousing and manufacturing," The Conference Board said in a press release Tuesday.

NAR - housing starts, February 19, 2020
The following is NAR Chief Economist Lawrence Yun’s reaction to the release from the U.S. Commerce Department on new home construction: “The latest month’s decline in housing starts is nothing to be concerned about. This housing data is quite jumpy. What is important is the trend line, which is clearly on an upward path. Higher housing permit issuances are also a positive indicator for even greater production in the months ahead. Housing starts of 1.57 million units (annualized rate) in January following 1.63 million in December marks the only two months in over a decade where activity has been above the historical average of 1.5 million a year. More construction will mean more housing inventory for consumers in the later months of this year. Spring months could still be quite tough for buyers, since it takes time to convert housing starts into actual housing completions. As trade-up buyers move into these new completed homes in the near future, their existing homes will be released onto the market.”

MBA - January new home purchase mortgage applications increased 35.3 percent
The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for January 2020 shows mortgage applications for new home purchases increased 35.3 percent compared from a year ago. Compared to December 2019, applications increased by 40 percent. This change does not include any adjustment for typical seasonal patterns. MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 865,000 units in January 2020, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. "New home applications and sales activity surged in January. This was a continuation of the end of 2019, which saw strong residential construction and increased purchase applications activity," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Even with some global and domestic economic uncertainty, builders have ramped up production in recent months to meet increased homebuyer demand." Added Kan, "MBA estimates that January new home sales increased 25 percent over the month to a sales pace of 865,000 units, while the average loan size increased to $346,000 - both record highs since the survey began in 2012." The seasonally adjusted estimate for January is an increase of 25.5 percent from the December pace of 689,000 units. On an unadjusted basis, MBA estimates that there were 66,000 new home sales in January 2020, an increase of 37.5 percent from 48,000 new home sales in December. By product type, conventional loans composed 69.5 percent of loan applications, FHA loans composed 17.8 percent, RHS/USDA loans composed 0.8 percent and VA loans composed 12 percent. The average loan size of new homes increased from $338,625 in December to $346,140 in January.

NAHB - builder confidence remains solid in February
Builder confidence in the market for newly-built single-family homes edged one point lower to 74 in February, according to the latest NAHB/Wells Fargo Housing Market Index (HMI) released today. The last three monthly readings mark the highest sentiment levels since December 2017. “Steady job growth, rising wages and low interest rates are fueling demand but builders are still grappling with increasing construction and development costs,” said NAHB Chairman Dean Mon. “At a time when demand is on the rise, regulatory constraints along with a shortage of construction workers and a dearth of lots are hindering the production of affordable housing in local communities across the nation,” said NAHB Chief Economist Robert Dietz. “And while lower mortgage rates have improved housing affordability in recent months, accelerating price growth due to limited inventory may offset some of that effect.” Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo HMI 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 for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. The HMI index gauging current sales conditions fell one point to 80, the component measuring sales expectations in the next six months was one point lower at 79 and the gauge charting traffic of prospective buyers also decreased one point to 57. Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 63, the Midwest increased one point to 67 and the South moved two points higher to 78. The West fell one point to 83.

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Residential refinance mortgages more than double in fourth quarter of 2019

20 Mar, 2020
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MBA - February new home purchase mortgage applications increased 25.9 percent

19 Mar, 2020
The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for February 2020 shows mortgage applications for new home purchases increased 25.9 percent compared from a year ago. Compared to January 2020, applications decreased by 1 percent. This change does not include any adjustment for typical seasonal patterns. "Despite a monthly decrease in February new applications and estimated new home sales, the year-over-year trends were strong, with new applications increasing 26 percent, and our estimate of new home sales increasing 8 percent," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Looking ahead, there is significant uncertainty regarding how the coronavirus epidemic will impact the housing market, and some of January's record-level activity could have been attributed to the warmer winter weather, lower mortgage rates, and the tight inventory of existing homes on the market - especially in lower price tiers." MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 746,000 units in February 2020, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. The seasonally adjusted estimate for February is a decrease of 13.8 percent from the January pace of 865,000 units. On an unadjusted basis, MBA estimates that there were 64,000 new home sales in February 2020, a decrease of 3 percent from 66,000 new home sales in January. By product type, conventional loans composed 69.3 percent of loan applications, FHA loans composed 18.5 percent, RHS/USDA loans composed 0.8 percent and VA loans composed 11.4 percent. The average loan size of new homes decreased from $346,140 in January to $340,169 in February. NAHB - HUD, Fannie Mae and Freddie Mac suspend foreclosures and evictions President Trump announced today that he has directed the Department of Housing and Urban Development to suspend foreclosures and evictions for mortgages insured by the Federal Housing Administration through the end of April. The Federal Housing Finance Agency also announced that Fannie Mae and Freddie Mac will follow suit and suspend all foreclosures and evictions for at least 60 days for home owners with mortgages backed by the two government-sponsored enterprises. “This foreclosure and eviction suspension allows home owners with an Enterprise-backed mortgage to stay in their homes during this national emergency,” said FHFA Director Mark Calabria. “As a reminder, borrowers affected by the coronavirus who are having difficulty paying their mortgage, should reach out to their mortgage servicers as soon as possible. The Enterprises are working with mortgage servicers to ensure that borrowers facing hardship because of the coronavirus can get assistance.” Earlier this month, FHFA announced that Fannie Mae and Freddie Mac would allow borrowers impacted by the coronavirus to suspend mortgage payments for up to 12 months. New home construction dips again in February Construction of new homes fell again in February, but not as much as the previous month. Those declines follow a December surge which had pushed home construction to the highest level in 13 years. Builders started construction on 1.60 million homes at a seasonally adjusted annual rate, a decline of 1.5% from 1.62 million units in January, the Commerce Department reported Wednesday. Analysts had expected a more significant drop. The economic impact of the coronavirus outbreak was not apparent in the February numbers. Application for building permits, considered a good sign of future activity, fell 5.5% in February to an annual rate of 1.46 million units. However, permits for single-family home construction rose 1.7%. Single-family housing starts were up 6.7% to 1,072,000 in February over the revised January figure of 1,005,000. The report on housing starts showed that home building declined the most in the Northeast, falling 25.1%, followed by a 8.2% drop in the West. Home building fell modestly in the West and South regions. The National Association of Home Builders reported Tuesday that its survey of builders' sentiment declined slightly in February, but remains high. The group said that builder confidence reflected a decline in mortgage rates, a low supply of existing homes and a strong labor market with rising wages and the lowest unemployment rate in a half century. But that could change drastically in the coming months as American industry braces for the impact of COVID-19, which is grinding the economy to a near halt as people stay home, airlines cancel flights and public events are called off. "Due to the slowdown in economic growth and the volatility in markets from the coronavirus, mortgage rates will remain lower for longer, which will help homebuyers in the longer run," said Adam DeSanctis of the Mortgage Bankers Association. "However, we may start to see these homebuilding trends take a turn for the worse, depending on the industry's ability to continue day-to-day operations during these difficult times." The average rate on a 30-year-fixed mortgage ticked up slightly to 3.36% last week from 3.29% the previous week, which was the lowest level since mortgage buyer Freddie Mac started tracking the average in 1971. It could fall further this week after the Fed on Sunday slashed its benchmark rate to nearly zero. CoreLogic - single-family rent price increases double the rate of inflation, spurring affordability concerns in the midst of economic volatility - For the 14th consecutive month, Phoenix had the highest year-over-year rent price increase at 6.4% - Lower-priced rentals experienced increases of 3.5%, compared to gains of 2.6% among higher-priced rentals CoreLogic released its latest Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and among 20 metropolitan areas. Data collected for January 2020 shows a national rent increase of 2.9% year over year, down slightly from a 3.2% year-over-year increase in January 2019. Rent prices are now increasing at double the rate of inflation, presenting affordability challenges among current and prospective renters. Low rental home inventory, relative to demand, fuels the growth of single-family rent prices. The SFRI shows single-family rent prices have climbed between 2010 and 2019. However, overall year-over-year rent price increases have slowed since February 2016, when they peaked at 4.2%, and have stabilized at around 3% over the past year. Low-end rentals propped up national rent growth in January, which has been an ongoing trend since May 2014. Rent prices among this tier, defined as properties with rent prices less than 75% of the regional median, increased 3.5% year over year in January 2020, down from a gain of 3.9% in January 2019. Meanwhile, high-end rentals, defined as properties with rent prices greater than 125% of a region’s median rent, increased 2.6% in January 2020, down from a gain of 2.9% in January 2019. Among the 20 metro areas shown in Table 1, and for the 14th consecutive month, Phoenix had the highest year-over-year increase in single-family rents in January 2020 at 6.4% (compared to January 2019). Tucson, Arizona experienced the second-highest rent price growth in January 2020 with gains of 5.2%, followed closely by Las Vegas at 4.9%. Honolulu experienced the lowest rent increases out of all analyzed metros at 0.6%. Metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth. Phoenix experienced the highest year-over-year rent growth in January 2020, driven by annual employment growth of 3.2%. Austin, Texas experienced a 3.6% employment growth, which played a role in its above-average rent growth of 3.4% in January. This is compared with the national employment growth average of 1.5%, according to data from the United States Bureau of Labor Statistics. “The single-family rental market benefited from low unemployment rates over the past year, resulting in an increase in rental demand,” said Molly Boesel, principal economist at CoreLogic. “However, rents are increasing at about double the rate of inflation, which has negatively impacted affordability.” Home sales 'robust' despite coronavirus outbreak, real estate CEO says With many companies struggling amid the coronavirus pandemic, one industry may not be feeling the hurt yet, according to real-estate company Hovnanian Enterprises Inc.'s CEO. "The last two weeks, in one word, have been robust," Hovnanian Enterprises Inc. chairman and CEO Ara Hovnanian shared with FOX Business' Liz Claman on Tuesday. "We have been selling a lot of homes. Frankly, it's been surprising." Hovnanian admitted that going into the outbreak, his company was already seeing strong sales, so they are remaining cautiously optimistic. "New sales closings have been progressing regularly," Hovnanian said on "The Claman Countdown." "Customers want their home. They want to nest. If they're going to be inside for a while, they want to do it in their own home." He recognized the situation is changing quickly, but as of now, he's encouraged. Coronavirus spurs Trump to invoke Defense Production Act 'just in case we need it' President Trump will invoke the Defense Production Act because of the coronavirus pandemic, he said at a press conference Wednesday. "We'll be invoking the Defense Production Act just in case we need it. I think you all know what it is, and it can do a lot of good things if we need it," Trump said, adding that he'd sign it after the presser. The decision means the private sector can ramp up manufacturing of emergency supplies, including medical equipment. In addition, the administration is pushing for direct payments to relieve people suffering financially because of the virus. Trump said the size of those checks is "to be determined." Trump had said he hoped he didn't need the Defense Production Act because "it's a big step" in a Tuesday's press conference. President Trump declared a national emergency and enacted emergency powers outlined in the Stafford Act on Friday. MBA - mortgage applications decrease in latest MBA weekly survey Mortgage applications decreased 8.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 13, 2020. The Market Composite Index, a measure of mortgage loan application volume, decreased 8.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 8 percent compared with the previous week. The Refinance Index decreased 10 percent from the previous week and was 402 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index remained unchanged compared with the previous week and was 11 percent higher than the same week one year ago. "The ongoing situation around the coronavirus led to further stress in the financial markets late last week, with unprecedented volatility and widening spreads. This drove mortgage rates back up to their highest levels since mid-February and led to a 10 percent decrease in refinance applications. However, refinance activity remains very high. Excluding the spike two weeks ago, the index remained at its highest level since October 2012, and refinancing accounted for almost 75 percent of all applications," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "The Federal Reserve's rate cut and other monetary policy measures to help the economy should help to bring down mortgage rates in the coming weeks, spurring more refinancing. Amidst these challenging times, the savings that households can gain from refinancing will help bolster their own financial circumstances and support the broader economy." Added Kan, "Purchase activity was flat but remained over 10 percent higher than a year ago. The purchase market was on firm footing to start the year and has so far held steady through the current uncertainty. Looking ahead, a gloomier outlook may cause some prospective homebuyers to delay their home search, even with these lower mortgage rates." The refinance share of mortgage activity decreased to 74.5 percent of total applications from 76.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4 percent of total applications. The FHA share of total applications increased to 7.3 percent from 6.9 percent the week prior. The VA share of total applications increased to 14.5 percent from 13.1 percent the week prior. The USDA share of total applications increased to 0.4 percent from 0.3 percent the week prior. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.74 percent from 3.47 percent, with points increasing to 0.37 from 0.27 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.77 percent from 3.58 percent, with points increasing to 0.32 from 0.20 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.71 percent from 3.57 percent, with points increasing to 0.28 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 3.10 percent from 2.90 percent, with points increasing to 0.37 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 5/1 ARMs increased to 3.19 percent from 3.02 percent, with points decreasing to 0.19 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

ATTOM - U.S. counties with the greatest single family rental growth

16 Mar, 2020
The high-level takeaways from ATTOM Data Solutions’ newly released 2020 U.S. Single Family Rental Market Report are potential rental returns decrease from a year ago in 59 percent of the U.S. counties analyzed, while the highest potential SFR returns are in the Baltimore, Vineland, Macon, Mobile and Atlanta Metros. ATTOM’s annual single family rental report this year analyzed single-family rental returns in 389 U.S. counties with a population of at least 100,000 and sufficient rental and home price data. Rental data comes from the U.S. Department of Housing and Urban Development, and home price data comes from publicly recorded sales deed data collected and licensed by ATTOM Data Solutions. According to the report, the average annual gross rental yield (annualized gross rent income divided by median purchase price of single-family homes) among the 389 counties analyzed is 8.4 percent for 2020, down slightly from an average of 8.6 percent in 2019. The report revealed the counties with the highest potential annual gross rental yields for 2020: Baltimore City/County, MD (28.9 percent); Cumberland County, NJ, in the Vineland-Bridgeton metro area (20.1 percent); Bibb County, GA, in the Macon metro area (18.2 percent); Mobile County, AL (15.7 percent); and Clayton County, GA, in the Atlanta metro area (15.1 percent). Baltimore City, Cumberland and Bibb counties also had the top three yields in 2019. ATTOM’s report also pointed out that among counties with a population of at least 1 million, the highest potential gross rental yields in 2020 are in Wayne County (Detroit), MI (14.5 percent); Cuyahoga County (Cleveland), OH (11.8 percent); Cook County, IL (9.3 percent); Dallas County, TX (9.1 percent); and Harris County, TX (8.7 percent). Here are the Top 10: Saint Clair, IL (21.0 percent); Jefferson, AL (20.7 percent); Mobile, AL (19.6 percent); Baltimore City, MD (18.5 percent); Caddo, LA (17.3 percent); Beaver, PA (15.7 percent); Lorain, OH (15.4 percent); Madison, IL (10.0 percent); Summit, OH (9.9 percent); and Spartanburg, SC (8.1 percent). ATTOM’s 2020 SFR market report also noted the counties with the lowest potential annual gross rental yields: San Francisco County, CA (3.8 percent); San Mateo County, CA (3.8 percent); Williamson County, TN, in the Nashville metro area (3.9 percent); Kings County (Brooklyn), NY (4.3 percent); and Santa Clara County, CA (4.3 percent). Moreover, along with Kings County and Santa Clara County, the lowest potential annual gross rental yields in 2020 among counties with a population of at least 1 million are in Orange County, CA (5.0 percent); Queens County, NY (5.1 percent); and Los Angeles County, CA (5.2 percent). Impossible Foods raises $500M in new funding, says it can 'thrive' in coronavirus pandemic Plant-based meat producer Impossible Foods has raised around $500 million in its latest funding round. The Redwood City, California-based food-tech startup that makes alternative meat products using a molecule called heme that makes food look, taste and bleed like real beef or pork, announced Monday its latest series F funding round led by new investor South Korea's Mirae Asset Global Investments. Impossible said the new investment will go toward accelerating its manufacturing and scale helping it to expand its retail presence in more international markets and increase supply of newer products like its plant-based Impossible Sausage and Impossible Pork. The funding news comes with the widening coronavirus pandemic resulting in school closures and businesses like restaurants, bars and gyms to shutter in an attempt to contain virus from spreading. What's more, grocery store shelves have become increasingly empty as Americans stock up. "With this latest round of fundraising, Impossible Foods has the resources to accelerate growth -- and continue to thrive in a volatile macroeconomic environment, including the current COVID-19 pandemic." With this latest round of fundraising, Impossible Foods has the resources to accelerate growth -- and continue to thrive in a volatile macroeconomic environment, including the current COVID-19 pandemic," Impossible Foods' Chief Financial Officer David Lee said in a statement. Impossible Foods has raised $1.3 billion in funding, including its latest round. Other investors include Horizons Ventures, Khosla Ventures and Temasek. And the $5 billion market for plant-based foods has grown increasingly competitive as larger food companies like Kellogg's, Nestle and Tyson roll out their own versions of plant-based meat at lower price points. As a result, Impossible Foods lowered its wholesale prices by 15 percent. And its competitor Beyond Meat told analysts earlier this month it wants to have at least one of its products comparably priced to real meat by 2024. MBA - commercial/multifamily mortgage debt grows in the fourth quarter of 2019 The level of commercial/multifamily mortgage debt outstanding at the end of 2019 was $248 billion (7.3 percent) higher than at the end of 2018, according to the Mortgage Bankers Association's (MBA) latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report. MBA's report found that total mortgage debt outstanding in the final three months of 2019 rose by 2.1 percent ($75.0 billion) compared to last year's third quarter, with all four major investor groups increasing their holdings. Multifamily mortgage debt grew by $30.4 billion (2.0 percent) to $1.53 trillion during the fourth quarter, and by $116.7 billion (8.2 percent) for the entire year. "In 2019, the amount of mortgage debt backed by commercial and multifamily properties grew by the largest annual amount since before the Global Financial Crisis," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "Every major capital source increased their holdings, and some by double digits. Continuing the recent trend, the growth in multifamily mortgage debt outpaced that of other property types." Added Woodwell, "Looking ahead, a key question will be how the coronavirus and related economic shocks will affect the market's momentum in 2020. At this point it is still too early to tell." The four major investor groups are: bank and thrift; commercial mortgage backed securities (CMBS); collateralized debt obligation (CDO) and other asset backed securities (ABS) issues; federal agency and government sponsored enterprise (GSE) portfolios and mortgage backed securities (MBS); and life insurance companies. MBA's analysis summarizes the holdings of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in this data under "Life Insurance Companies"), and in CMBS, CDOs and other ABS for which the security issuers and trustees hold the note (and which appear here under CMBS, CDO and other ABS issues). Commercial banks continue to hold the largest share (39 percent) of commercial/multifamily mortgages at $1.4 trillion. Agency and GSE portfolios and MBS are the second largest holders of commercial/multifamily mortgages, at $744 billion (20 percent of the total). Life insurance companies hold $561 billion (15 percent), and CMBS, CDO and other ABS issues hold $504 billion (14 percent). Looking solely at multifamily mortgages, agency and GSE portfolios and MBS hold the largest share of total debt outstanding at $744 billion (49 percent of the total), followed by commercial banks with $459 billion (30 percent), life insurance companies with $149 billion (10 percent), state and local governments with $88 billion (6 percent), and CMBS, CDO and other ABS issues with $48 billion (3 percent). In the fourth quarter of 2019, CMBS, CDO and other ABS issues saw the largest rise in dollar terms in their holdings of commercial/multifamily mortgage debt, with an increase of $23.1 billion (4.8 percent). Commercial banks increased their holdings by $21.5 billion (1.5 percent), agency and GSE portfolios and MBS increased their holdings by $16.1 billion (2.2 percent), and finance companies saw the largest decrease at $117 million (0.4 percent). In percentage terms, CMBS, CDO and other ABS issues saw the largest increase - 4.8 percent - in their holdings of commercial/multifamily mortgages, and state and local government retirement funds saw their holdings decrease the most, at 1.0 percent. The $30.5 billion rise in multifamily mortgage debt outstanding between the third and fourth quarters of 2019 represented a 2.0 percent increase. In dollar terms, agency and GSE portfolios and MBS saw the largest increase, at $16.1 billion (2.2 percent), in their holdings of multifamily mortgage debt. Commercial banks increased their holdings of multifamily mortgage debt by $6.7 billion (1.5 percent). CMBS, CDO and other ABS issues increased holdings by 9.5 percent to $4.1 billion. Private pension funds saw the largest decline (7.2 percent) in their holdings, by $65 million. In percentage terms, REITs recorded the largest increase in holdings of multifamily mortgages (23.9 percent), and private pension funds saw the biggest decrease (7.2 percent). Between December 2018 and December 2019, commercial banks saw the largest gain (6.1 percent) in dollar terms in their holdings of commercial/multifamily mortgage debt - an increase of $82 billion. State and local government decreased their holdings of commercial/multifamily mortgages by $1.5 billion (1.4 percent). In percentage terms, finance companies saw the largest increase (14.9 percent) in their holdings of commercial/multifamily mortgages, and state and local government retirement funds saw the largest decrease (3.3 percent). The $116.7 billion rise in multifamily mortgage debt outstanding during 2019 represents an 8.2 percent increase. In dollar terms, agency and GSE portfolios and MBS saw the largest increase in their holdings of multifamily mortgage debt at 10 percent ($69.2 billion). State and local government saw the largest decrease in their holdings down $1.3 billion (1.4 percent). In percentage terms, REITs recorded the largest increase in their holdings of multifamily mortgages, 52 percent, while private pension funds saw the largest decrease, 24 percent. China's economy skids as virus paralyzes factories, households China factory production plunged at the sharpest pace in 30 years in the first two months of the year as the fast-spreading coronavirus and strict containment measures severely disrupted the world's second-largest economy. Urban investment and retail sales also fell sharply and for the first time on record, reinforcing views that the epidemic may have cut China's growth by half in the first quarter and that authorities will need to do more to restore growth. Industrial output fell by a much larger-than-expected 13.5% in January-February from the same period a year earlier, data from the National Bureau of Statistics (NBS) showed on Monday. That was the weakest reading since January 1990 when Reuters records started, and a sharp reversal of the 6.9% growth in December. The median forecast of analysts polled by Reuters was for a rise of 1.5%, though estimates varied widely. "Judging by the data, the shock to China's economic activity from the coronavirus epidemic is greater than the global financial crisis," said Zhang Yi, chief economist at Zhonghai Shengrong Capital Management. "These data suggest a small contraction in the first-quarter economy is a high probability event. Government policies would need to be focused on preventing large-scale bankruptcies and unemployment." The dire batch of official economic data on Monday also showed a shocking declines in the retail and property sectors. Fixed asset investment fell 24.5% year-on-year, dashing forecasts for a 2.8% rise and skidding from the 5.4% growth in the prior period. Private sector investment dived 26.4% from a year earlier. Retail sales shrank 20.5% on-year, compared with a rise of 0.8% tipped by analysts and 8% growth in December as consumers shunned crowded places like shopping malls, restaurants and movie theaters. China's jobless rate rose to 6.2% in February, compared with 5.2% in December and the highest since the official records were published. While officials say the epidemic's peak in China had passed, analysts warn it could take months before the economy returns to normal. The fast spread of the virus around the world is also sparking fears of a global recession that would dampen demand for Chinese goods. The NBS in a statement on Monday said the impact from the coronavirus epidemic is controllable and short-term and authorities would strengthen policy to restore economic and social order. Mainland China has seen an overall drop in new coronavirus infections, but major cities such as Beijing and Shanghai continued to wrestle with cases involving infected travelers arriving from abroad, which could undermine China's virus fighting efforts. "While domestic conditions should improve slowly in the coming months, the mounting global disruption from the coronavirus will hold back the pace of recovery," said Julian Evans-Pritchard, Senior China Economist at Capital Economics. Prior to a significant deterioration in the virus, analysts had predicted a rapid V-shaped recovery for China's economy, similar to that seen after the SARS epidemic in 2003-2004. However, the outbreak escalated just as many businesses were closing for the long Lunar New Year holidays in late January, and widespread restrictions on transportation and personal travel, as well as mass quarantine, delayed their reopening for weeks. Both exports and imports fell in the first two months from a year earlier, while slumping demand pushed factory prices back into deflation. Factories may not be back to full output until April, some analysts estimate, and consumer confidence may take even longer to recover. The pain in the industrial sector was also seen in China's real estate market. Property investment fell at its fastest pace on record while home prices stalled for the first time in nearly five years. Despite those numbers, NBS spokesman Mao Shengyong said short-term policies to support the property market were not among the government's broad swathe of stimulus options. Authorities have been ramping up support since the virus outbreak escalated, with most aimed at helping cash-starved companies stay afloat until conditions improve. Other major global economies have more recently unleashed a wave of stimulus to prop up growth and ensure financial stability. China's central bank said on Friday it was cutting the amount of cash that banks must hold as reserves (RRR) for the second time this year, releasing another 550 billion yuan ($78.82 billion) to push down borrowing costs. Mao from the NBS told reporters after the data release there is room for China to appropriately raise budget deficit ratio this year, and Beijing would expand effective investment to cope with the economic downward pressure. China has cut several key interest rates since late January, and some analysts are expecting another reduction in its benchmark lending rate this week. It has also urged lenders to extend cheap loans to the worst-hit firms and tolerate late payments, though analysts note that will likely saddle banks with more bad loans. The government has also announced fiscal support measures, including more funding for the virus fight, tax waivers, cuts in social insurance fees and subsidies for firms. "I'm worried about the small firms. The pressure of rent remains a problem and tax waivers don't mean much, as there's no revenues," said Hua Changchun, chief economist at Guotai Junan Securities. "If Q1 GDP growth turns negative, there would be huge pressure to achieve the full year target, unless we can have a 8%-10% of GDP growth in the second quarter." NAHB - Fed cuts interest rates to zero The Federal Reserve on Sunday evening slashed interest rates to zero in a dramatic move to boost the economy and keep borrowing costs as low as possible for consumers and businesses in the wake of the coronavirus crisis. The Fed reduced the federal funds target rate by a full percentage point, from 1% to 1.25% down to 0% to 0.25%. NAHB Chief Economist Robert Dietz provides analysis on how the Fed action will provide a stimulus to the economy and housing in this Eye on Housing blog post. In an official statement, the Fed said: “The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook. In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4%. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.” The moves comes less than two weeks after the Fed made an emergency 50-point basis rate cut and pledged to purchase $1.5 trillion in bonds to keep the financial markets from seizing up. In today’s announcement, the Fed also announced that in order to support the smooth functioning of markets for Treasury securities and agency mortgage-backed securities that are central to the flow of credit to households and businesses, the central bank will purchase at least $500 billion of Treasury bonds and $200 billion of mortgage-backed securities over the coming months.
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