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WSJ – jump in US new home sales defies expectations

US new home sales increased sharply for the second consecutive month in February, an indication that growing demand and a pickup in construction activity could help propel a strong spring selling season for this segment of the market.  Purchases of newly built, single-family houses, which account for a small share of overall US home sales, jumped 6.1% from January to a seasonally adjusted annual rate 592,000 last month, the Commerce Department said Thursday. That marked the second-strongest month since the housing-market expansion began in 2012.  Economists surveyed by The Wall Street Journal expected new home sales to increase by 1.4% to 563,000 sales.  “Builders are seeing strong traffic,” said Brad Hunter, chief economist at HomeAdvisor, a home-improvement website. “We are expecting strong sales going into the spring.”  The data were clouded by a margin of error of 17 percentage points, much larger than the reported increase.  Still, momentum appears to be building in the market. New home sales increased in January by 3.7% compared with a month earlier.  February sales jumped by a substantial 12.8% compared with the same month a year ago, according to the Commerce Department.  In a sign that builders are responding to demand, the number of homes for sale at the end of February rose to the highest level since July 2009. At the current sales pace, that is enough supply for 5.4 months, below the six-month level that many economists say is indicative of a balanced market.  The median sale price for a newly built home fell slightly in February to $296,200.  “The pickup in sales coupled with low inventories suggests that single-family starts will rise further in coming months, as home builders attempt to meet increasing demand,” said David Berson, chief economist at Nationwide Insurance.

John Burns, chief executive of John Burns Real Estate Consulting, said the home builders his company surveys reported a 14% increase in sales in February compared with last year. He said expectations for the full year call for roughly 7% sales growth compared with last year.  Mr. Burns said builders got a boost from buyers looking to beat rising interest rates, but that is likely to last only a couple of months.  “We’re having a good spring but not some hockey stick recovery,” he said.  Economists expect new-home sales to continue to increase this year as builders step up construction of single-family homes and more first-time buyers enter the starter-home market. Single-family housing starts rose to a 10-year high in February, thanks to a strengthening economy and unseasonably warm weather. Still, the housing market picture isn’t entirely rosy. Purchases of previously owned homes, which account for the vast majority of the market, decreased by 3.7% in February from a month earlier, the National Association of Realtors said Wednesday. Economists said rising prices and mortgage rates, along with a shortage of inventory, are keeping many first-time buyers out of the market.  Rates for a 30-year mortgage averaged 4.23% this week, according to mortgage company Freddie Mac, down from 4.3% a week earlier but up from about 3.5% in November.

Durable goods up 1.7% in February but not as good as expected

Greater demand for commercial aircraft helped US businesses increased their orders for long-lasting manufactured goods in February, but a key category that tracks business investment plans slipped slightly.  The Commerce Department says orders for durable goods rose 1.7% in February and an upwardly revised 2.3% in January. Orders so far this year are running 1.6% higher than in the first two months of 2016. But demand in a category that excludes aircraft and military goods — and reflects business investment plans — dipped 0.1%.  Orders for commercial aircraft saw a 47.6% jump in February. Orders also rose for primary metals. But demand for motor vehicles slumped.  Manufacturers are recovering from a rough patch that began in 2015 as oil prices fell and the dollar strengthened.

Black Knight Financial Services’ First Look at February 2017

The Data and Analytics division of Black Knight Financial ​Services (NYSE: BKFS) reports the following “first look” at February 2017 month-end mortgage performance statistics derived from its loan-level database representing the majority of the national mortgage market.

–  Prepayment Activity Continues to Decline, Down 40% So Far in 2017

–  Prepayment speeds (historically a good indicator of refinance activity) declined 15% in February, marking a 40% overall year-to-date decline and the lowest monthly rate in three years

–  Delinquencies continued their seasonal decline, ticking down .98% from January

–  Foreclosure starts fell 18% from last month to 31% below last year’s levels

–  Active foreclosure inventory now stands at 470,000, the lowest such level since June 2007

President Trump approves construction of Keystone XL pipeline

President Donald Trump on Friday approved the construction of the Keystone XL pipeline linking Canadian oil sands to US refiners, a project blocked by former President Barack Obama.  TransCanada said earlier in the day the US Department of State had issued a presidential permit for the project.  Trump signed an executive order to advance the project, which will link Canadian oil sands to US refiners, soon after taking office in January, saying it would create thousands of jobs.  A senior administration official told Reuters that Trump will make the announcement alongside TransCanada Chief Executive Russell Girling and Sean McGarvey, president of North America’s Building Trades Unions.  “Our Government has always been supportive of the Keystone XL pipeline and we are pleased with the US decision,” a spokesman for Canada’s minister of natural resources said.  “The importance of a common, continental energy market cannot be overstated,” he added.  The move marks the beginning of lengthy process, which will involve getting approvals from state regulators. Expedited approval of projects is part of Trump’s approach for a 10-year, $1 trillion infrastructure package he promised on the campaign trail.  The multibillion-dollar pipeline would bring more than 800,000 barrels per day of heavy crude from Canada’s oil sands in Alberta into Nebraska, linking to an existing pipeline network feeding US refineries and ports along the Gulf of Mexico.

MBA – MBA releases 2016 rankings of commercial/multifamily mortgage firms’ origination volumes

According to a set of commercial/multifamily real estate finance league tables prepared by the Mortgage Bankers Association (MBA), Wells Fargo; JP Morgan Chase & Company; HFF, L.P.; Eastdil Secured; PNC Real Estate; CBRE Capital Markets, Inc.; Key Bank; Meridian Capital Group; Capital One Financial Corp.; and JLL were the top commercial/multifamily mortgage originators in 2016.  The MBA study is the only one of its kind to present a comprehensive set of listings of 132 different commercial/multifamily mortgage originators, their 2016 volumes and the different roles they play.  The MBA report, Commercial Real Estate/Multifamily Finance Firms – Annual Origination Volumes, presents origination volumes in more than 140 categories, including by role, by investor group, by property type, by financing structure type, and by the location of the originating office.    Nine different companies were at the top of the 11 lists reporting total originations by investor groups.

–  Wells Fargo topped the list of total origination volumes

–  JP Morgan Chase & Company, Deutsche Bank Securities, Inc., and Eastdil Secured were the top originators for commercial mortgage-backed securities (CMBS)

–  JP Morgan Chase & Company, PNC Real Estate, and Key Bank were the top originators for commercial bank loans

–  MetLife Real Estate, HFF, L.P., and PGIM Real Estate Finance were the top originators for life insurance companies

–  Wells Fargo, Walker & Dunlop, and CBRE Capital Markets, Inc. were the top originators for Fannie Mae

–  CBRE Capital Markets, Inc., Berkadia, and HFF, L.P. were the top originators for Freddie Mac

–  Berkadia, Greystone, and Red Mortgage Capital, LLC were the top originators for FHA/Ginnie Mae

–  TIAA, Barings, and CBRE Capital Markets, Inc. were the top originators for pension funds

–  HFF, L.P., CBRE Capital Markets, Inc., and Marcus & Millichap Capital Corporation were the top originators for credit companies

–  Capital One Financial Corp., Eastdil Secured, and Meridian Capital Group were the top originators for REITS, Mortgage REITS, and Investment Funds

–  Mesa West Capital, LLC, JLL, and Meridian Capital Group were the top originators for specialty finance

–  Wells Fargo, HFF, L.P., and Deutsche Bank Securities Inc. were the top originators for the “other investors” category

–  By dollar volume, the top five originators for third parties in 2016 were HFF, L.P.; Eastdil Secured; CBRE Capital Markets, Inc.; Meridian Capital Group; and Key Bank.

–  The top five lenders in 2016 were Wells Fargo, JP Morgan Chase & Company, Key Bank, Capital One Financial Corp., and Deutsche Bank Securities, Inc.

Posted by: pharbuck on March 24, 2017
Posted in: Uncategorized