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ATTOM – markets in Colorado, new Hampshire, Illinois, DC, and Tennessee top list of where homebuyers are most likely to move in Q4 2017

– Top Pre-Mover Markets Post Lower Unemployment Rates, Slightly Weaker Wage Growth

– Hottest Second Home Pre-Mover Markets Myrtle Beach, Asheville, Daytona Beach
ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, today released its Q3 2017 Pre-Mover Housing Index, which shows that the markets with the highest pre-mover indices during the third quarter — predictive of strong sales activity in the fourth quarter — were Colorado Springs, Colorado; Manchester-Nashua, New Hampshire; Chicago, Illinois; Washington, D.C.; and Nashville, Tennessee. Using data collected from purchase loan applications on residential real estate transactions, the ATTOM Data Solutions Pre-Mover Housing Index is based on the ratio of homes with a “pre-mover” flag during a quarter to total single family homes and condos in a given geography, indexed off the national average. An index above 100 is above the national average and indicates an above-average ratio of homes that will likely be sold in the next 30 to 90 days in a given market. The top five markets — among 123 total metro areas analyzed for the report — all posted a pre-mover index of 196 or higher. Other markets in the top 10 for highest pre-mover index in the third quarter were Reno, Nevada (189); Tampa-St. Petersburg, Florida (188); Las Vegas, Nevada (180); Jacksonville, Florida (179); and Kingsport-Bristol, Tennessee (178). Among the same 123 metro areas analyzed for the report, those with the lowest pre-mover indices in the third quarter were Rochester, New York (35); Akron, Ohio (47); Myrtle Beach, South Carolina (47); Providence, Rhode Island (52); and Cleveland, Ohio (52). “Home buyers are most likely to move — and homeowners are more likely to move up — in markets with plenty of available jobs along with a reasonable supply of homes for sale,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Markets with this enviable and increasingly rare combination of jobs and housing inventory tend to be in secondary and even tertiary markets that are somewhat off the beaten path. Even in more mainstream markets, the counties with the highest pre-mover indices tend to be in outlying areas where more inventory is available or can be built.”

Out of 331 US counties analyzed for the report, 213 posted a pre-mover index above the national average in the third quarter. The average September unemployment rate in those 213 counties was 3.8%, compared to an average unemployment rate of 4.2% in the 118 counties that posted a pre-mover index below the national average in the third quarter. Weekly wages grew 6.4% from a year ago on average in the 213 counties with a Q3 2017 pre-mover index above the national average while average weekly wages grew 6.5% from a year ago on average in the counties with a Q3 2017 pre-mover index below the national average. Among 123 metropolitan statistical areas with at least 100,000 single family homes and condos and at least 100 pre-movers in Q3 2017, those with the highest share of pre-movers indicating interest in second home purchases were in Myrtle Beach, South Carolina (14.2%); Asheville, North Carolina (10.7%); Deltona-Daytona Beach-Ormond Beach, Florida (10.3%); Atlantic City, New Jersey (9.6%); and Cape Coral-Fort Myers, Florida (9.4%). Among 123 metropolitan statistical areas with at least 100,000 single family homes and condos and at least 100 pre-movers in Q3 2017, those with the highest share of pre-movers interested in investment property purchases were Memphis, Tennessee (29.9%); Jackson, Mississippi (13.7%); Boulder, Colorado (12.6%); Indianapolis, Indiana (11.0%); and Kansas City, Missouri (9.2%). Among 331 US counties with at least 50,000 single family homes and condos and at least 50 pre-movers in the third quarter, those with the highest pre-mover index were Loudon County, Virginia in the Washington, D.C. area (304); El Paso County, Colorado in the Colorado Springs metro area (300); Prince William County, Virginia in the Washington, D.C. metro area (298); Will County, Illinois in the Chicago metro area (298); and Champaign County, Illinois (258). Among the 331 counties analyzed for the report, those with the lowest pre-mover index in Q3 2017 were Wayne County, Michigan in the Detroit metro area (32); Queens County, New York (37); San Mateo County, California in the San Francisco metro area (40); Monroe County, New York in the Rochester metro area (42); and Stark County, Ohio in the Canton metro area (44).

Major automakers post mixed November US sales results

Major automakers posted mixed US November new vehicle sales for November on Friday, with General Motors and Fiat Chrysler Automobiles (FCA) down largely on lower fleet sales, while Ford Motor’s sales rose. Automakers are trying to sell down 2017 model year vehicles, offering high discounts to consumers as the year-end nears. Last year the industry hit record annual sales of 17.55 million units and this year analysts expect full-year sales to fall slightly, increasing competition to move vehicles off dealers’ lots. No. 1 US automaker GM said its sales fell 2.9% in November, with sales to consumers flat versus the same month in 2016. Much of the decrease was driven by lower fleet sales to rental agencies, businesses and government agencies. GM said strong SUV and crossover sales pushed its average transaction price for the month above $37,000 for the first time. The company’s level of unsold cars, which has been a concern for analysts and the industry, rose slightly to 83 days supply from 80 days at the end of October. Fleet sales are a low-margin business for automakers. FCA in particular has targeted a significant reduction in this type of sale in 2017. The automaker posted a 4% overall decrease in sales for November, but said fleet sales were down 25% while sales to consumers were up 2% on the year. No. 2 US automaker Ford reported a 6.7% increase in sales in November, with fleet sales up nearly 26% and retail sales 1.3% higher than in November 2016. Ford said SUV sales rose 13.3% in November, while its pickup truck sales were up 4.1%.

NAR – pending home sales strengthen 3.5% in October

Pending home sales rebounded strongly in October following three straight months of diminishing activity, but still continued their recent slide of falling behind year ago levels, according to the National Association of Realtors®. All major regions except for the West saw an increase in contract signings last month. The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 3.5% to 109.3 in October from a downwardly revised 105.6 in September. The index is now at its highest reading since June (110.0), but is still 0.6% below a year ago. Lawrence Yun, NAR chief economist, says pending sales in October were primarily driven higher by a big jump in the South, which saw a nice bounce back after hurricane-related disruptions in September. “Last month’s solid increase in contract signings were still not enough to keep activity from declining on an annual basis for the sixth time in seven months,” he said. “Home shoppers had better luck finding a home to buy in October, but slim pickings and consistently fast price gains continue to frustrate and prevent too many would-be buyers from reaching the market.”

According to Yun, the supply and affordability headwinds seen most of the year have not abated this fall. Although homebuilders are doing their best to ramp up production of single-family homes amidst ongoing labor and cost challenges, overall activity still drastically lags demand. Further exacerbating the inventory scarcity is the fact that homeowners are staying in their homes longer. NAR’s 2017 Profile of Home Buyers and Sellers – released last month – revealed that homeowners typically stayed in their home for 10 years before selling (an all-time survey high). Prior to 2009, sellers consistently lived in their home for a median of six years before selling. “Existing inventory has decreased every month on an annual basis for 29 consecutive months, and the number of homes for sale at the end of October was the lowest for the month since 19991,” said Yun. “Until new home construction climbs even higher and more investors and homeowners put their home on the market, sales will continue to severely trail underlying demand.” With two months of data remaining for the year, Yun forecasts for existing-home sales to finish at around 5.52 million, which is an increase of 1.3% from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 6%. In 2016, existing sales increased 3.8% and prices rose 5.1%. The PHSI in the Northeast inched forward 0.5% to 95.0 in October, but is still 1.9% below a year ago. In the Midwest the index increased 2.8% to 105.8 in October, but remains 0.9% lower than October 2016. Pending home sales in the South jumped 7.4% to an index of 123.6 in October and are now 2.0% higher than last October. The index in the West decreased 0.7% in October to 101.6, and is now 4.4% below a year ago.

Oil prices rise after OPEC extends output curbs

Oil prices rose on Friday, following an agreement by OPEC and other major producers to extend output curbs until the end of 2018 to try to reduce the global oil glut. The Organization of the Petroleum Exporting Countries and some non-OPEC producers led by Russia agreed on Thursday to keep current limits on output in place until the end of next year, although they signaled a possible early exit from the deal should the market overheat and prices rise too far. Brent was trading at $63.22 by 1202 GMT, up 59 cents on the day. US light crude was up 46 cents at $57.86. “OPEC and the cooperating countries have created a very high level of confidence that they are standing behind the oil market, that they’re going to drive the inventories further down,” SEB Markets chief commodities analyst Bjarne Schieldrop said. “They gave a very serious and trustworthy appearance yesterday and that is taking away a lot of the downside in the market,” he said. The deal, which has been in place since January and was due to expire in March, has seen producers reduce output by 1.8 million barrels per day (bpd), helping to halve global oil oversupply over the past year.

CoreLogic – credit characteristics of renters

Mortgage lenders have known for a long time that debt-to-income (DTI) and credit history (based on credit bureau data), among other factors, are critical for sound underwriting and managing credit risk on a mortgage portfolio. Similar analysis can be used to evaluate a prospective tenant’s likelihood of making the rent payments agreed to in the lease or the share of a building’s rent roll that may go delinquent. This has become increasingly important for rental management companies as the renter share of households has risen to its highest in 50 years. The CoreLogic Rental Property Solutions platform evaluates the credit risk of rental applicants. Information from this platform can be used to examine trends in renter credit quality over time. A higher rent-to-income ratio is generally associated with increased credit risk, as renters devote a higher percentage of their income to paying rent. The rent-to-income ratio has trended upward between 2009 and 2017, as the increase in rents has outpaced income growth. At the national level, it has increased from 25.4% in the second quarter of 2009 to 28.1% in the second quarter of 2017, a 10.6% increase over an eight-year period.

Rent to income is one factor affecting renter payment risk. Additional sources of information, such as credit bureau data, public records, and other information in the renter application, can also provide insight into renter performance risk. The CoreLogic ScorePLUS model is a statistical model that brings together multiple sources of information to predict renter applicant’s risk of lease default. Information related to credit bureau history, subprime loan history, eviction and rental collection history, as well as the renter’s application information all factor in to the SafeRent Score risk score. Similar to a FICO score, a higher SafeRent Score is associated with lower risk. Two trends stand out in the average renter risk scores. First, the scores exhibit a seasonal trend. The seasonal trend is supported by seasonal trends in credit bureau characteristics of rent applicants. Second, the average score has been improving (renter applicant risk has been declining) since 2010. This is consistent with the general improvement of credit performance as borrowers continue to recover from the 2008-2009 recession. The improvement in applicants’ credit characteristics has more than offset the upward trend in rent to income, resulting in an improving rental risk score over time.

Posted by: pharbuck on December 1, 2017
Posted in: Uncategorized