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Black Knight – Home Price Index Report: July 2017

The Data and Analytics division of Black Knight​ Financial Services, Inc. (NYSE: BKFS) released its latest Home Price Index (HPI) report, based on July 2017 residential real estate transactions. The Black Knight HPI utilizes repeat sales data from the nation’s largest public records data set, as well as its market-leading, loan-level mortgage performance data, to produce one of the most complete and accurate measures of home prices available for both disclosure and non-disclosure states. Non-disclosure states do not include property sales price information as part of their publicly available county recorder data. Black Knight is able to obtain the sales price information for these states by combining and matching records across its unique data assets.

–  Monthly Rate of Appreciation Slows as U.S. Home Prices Gain 0.5 Percent in July, Year-Over-Year Growth Steady at 6.2 Percent

–  The rate of growth in year-over-year price appreciation stabilized in July after accelerating throughout every month of 2017

–  After hitting a high of 1.3 percent in March 2017, the rate of monthly appreciation has steadily slowed over subsequent months

–  New York home prices showed continued strength, leading all states in monthly appreciation at 1.8 percent and accounting for nine of the 10 best-performing metropolitan areas

–  Of the 20 largest states, only Virginia saw home prices pull back, with a 0.2 percent month-over-month decline from June

–  Among the nation’s 40 largest metros, home prices in Virginia Beach, Va., Los Angeles, Calif., and Washington, D.C, saw slight declines as well

–  Up 11.1 percent since the start of 2017, the HPI for the San Jose, Calif., metro area has now topped $1,000,000

–  11 of the 20 largest states and 20 of the 40 largest metros hit new home price peaks in July

New home sales, Jabil’s earnings, US GDP estimate

A look at some of the key business events and economic indicators upcoming this week:

Economists expect that sales of new U.S. homes rebounded in August after falling sharply the previous month. Sales sank 9.4 percent in July to a seasonally adjusted annual rate of 571,000, the biggest one-month drop in nearly a year. Still, sales so far this year are outpacing last year’s. More buyers are turning to newly built houses as the supply of existing homes for sale has fallen steadily. The Commerce Department releases its new home sales data on Tuesday. New home sales, seasonally adjusted annual rate, by month:

March 638,000

April 590,000

May 618,000

June 630,000

July 571,000

Aug. (est.) 580,000

Jabil Circuit delivers its latest quarterly report card Wednesday. Financial analysts predict the electronics manufacturing company closed out its fiscal fourth quarter with better earnings and revenue than in the same period last year. Jabil posted improved results in the third quarter. That followed two quarters of lower earnings. The Commerce Department is expected to report Thursday that the gross domestic product increased at a 3 percent annual rate in the April-June quarter, unchanged since its August estimate. It marks a sharp acceleration from the 1.2 percent pace set in the first three months of the year. GDP, seasonally adjusted annual rate, by quarter:

Q1 2016: 0.6

Q2 2016: 2.2

Q3 2016: 2.8

Q4 2016: 1.8

Q1 2017: 1.2

Q2 2017 (est.): 3.0

NAR – Economic and Financial Outlook, Attitudes About Home Buying and Selling on the Rise

Existing-homes sales have retreated in four of the past five months, but new survey findings from the National Association of Realtors® indicate it is not because of a lack of confidence from consumers about buying and selling a home, or based on their views about the direction of the economy and their finances. That’s according to NAR’s third quarter Housing Opportunities and Market Experience (HOME) survey1 , which also found that two-thirds of households think saving for a down payment is challenging, and roughly half of renters expect to pay more in rent next year. This quarter, there appears to be a revival from renters that now is a good time to buy a home. After dipping to roughly half of renters last quarter (52 percent), the share who believe now is a good time climbed to 62 percent (60 percent a year ago). Overall, current homeowners (80 percent), households with higher incomes and those living in the more affordable Midwest and South regions are the most optimistic about buying right now. Amidst the steady gains in home values seen in many parts of the country, the share of homeowners that believe now is a good time to sell is also inching higher. Eighty percent of homeowners think now is a good time to list their home for sale (a new survey high), which is up from last quarter (75 percent) and even more so than a year ago (67 percent). Lawrence Yun, NAR chief economist, says it is great news that homebuyer and seller optimism is advancing, but it remains unclear if it will actually translate to more sales. “The housing market has been in a funk since early spring because of the ongoing scarcity of new and existing homes for sale,” he said. “The pace of new home construction has not meaningfully broken out this year, and not enough homeowners at this point have followed through with their belief that now is a good time to sell. As a result, home shoppers have seen limited options, stiff competition and weakening affordability conditions.” Added Yun, “Buyer demand is robust this fall, but the disappointing reality is that sales will continue to undershoot their full potential until supply levels significantly improve.”

More households this quarter (57 percent) believe the economy is improving compared to the second quarter (54 percent) and a year ago (48 percent). Continuing the complete reversal from a year ago, those living in rural and suburban areas were more optimistic about the economy than respondents residing in urban areas. A majority of homeowners and those with incomes above $50,000 also had a positive outlook on the economy. The rebound in economic confidence this quarter are also giving households increased assurances about their financial situation. The HOME survey’s monthly Personal Financial Outlook Index2, showing respondents’ confidence that their financial situation will be better in six months, jumped from 57.2 in June to 62.0 in September. A year ago, the index was 58.6. “Jobs are plentiful, wage growth is finally showing signs of life, home values are up considerably in the past five years and the stock market is at record highs,” said Yun. “The economy is not perfect, and growth overall is still sluggish, but the financial health of the typical household looks as healthy as it has since the recession.” This quarter, non-homeowners were asked if they expect their rent to increase over the next year, and given their current financial situation, what impact paying more in rent would have on their living arrangements. Roughly half of current renters expect to pay more in rent next year (51 percent). If in fact their rent does increase, most will either resign their lease anyway (42 percent) or move to a cheaper rental. Only 15 percent of respondents will consider buying a home. “Even though the typical down payment of a first-time buyer has been 6 percent for three straight years, two-thirds of respondents indicated that saving for one is difficult right now,” said Yun. “Rents and home prices have outpaced incomes in the past few years, and this is undoubtedly impacting their ability to put aside savings for a home purchase, even if they increasingly believe it’s a good time to buy. Heading into next year, higher home prices and limited inventory in the affordable price range will likely continue to hold back a share of renters who would prefer to be homeowners.”

Target to boost minimum wages in battle for store workers

Target Corp. (TGT) said it is raising its minimum wage to $11 an hour starting next month and to $15 an hour within three years, as the retailer competes to fill low-wage jobs in a tighter labor market. The retailer, which employs about 323,000 people, said the new rate will apply to current staff as well as 100,000 temporary workers it plans to hire for the holidays. In the past, Target has resisted publicly commenting on its minimum wages. It quietly boosted starting pay to $10 an hour in 2016, after Wal-Mart Stores Inc. (WMT) said it would increase wages for most of its U.S. workers. The U.S. unemployment rate is near its lowest levels in 16 years, driving competition in unskilled jobs such as cashiers and clerks where turnover is often high and big chains must add tens of thousands of seasonal staff. Meanwhile, 19 states raised their minimum pay levels in January. “We’re investing to make sure that we recruit and retain the existing team, that we attract new team members and, importantly, that we provide an exceptional service environment,” Chief Executive Brian Cornell said to reporters, adding that the move was tied to Target’s holiday hiring plans. He declined to say how much more Target would be spending on wages following the change, but maintained the company’s previous financial projections for the year. Mr. Cornell is trying to turn around the retail chain’s fortunes after it reported weak holiday sales last year and was forced to lower its profit and sales goals for the current fiscal year. The company, whose stock is down 19% so far this year, has been cutting prices, remodeling stores and ramping up spending on its supply chain and e-commerce capabilities. Some of those efforts paid off last quarter as sales rose for the first time in a year. Retail is the largest private sector employer in the U.S., and competition for hourly workers has ratcheted up in recent years. There were 625,000 seasonally adjusted retail job openings in July, according to the Bureau of Labor Statistics, and the industry’s rate of openings is about double what it was in 2010.

Posted by: pharbuck on September 25, 2017
Posted in: Uncategorized