ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, today released its Year-End 2017 US Foreclosure Market Report, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 676,535 US properties in 2017, down 27% from 2016 and down 76% from a peak of nearly 2.9 million in 2010 to the lowest level since 2005. Those 676,535 properties with foreclosure filings in 2017 represented 0.51% of all US housing units, down from 0.70% in 2016 and down from a peak of 2.23% in 2010 to the lowest level since 2005. “Thanks to a housing boom driven primarily by a scarcity of supply, which has helped to limit home purchases to the most highly qualified — and low-risk — borrowers, the US housing market has the luxury of playing a version of foreclosure limbo in which it searches for how low foreclosures can go,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “There are a few notable local market exceptions playing a different version of foreclosure limbo in which a backlog of legacy foreclosure activity left over from the last housing crisis is still winding its way through a labyrinthine foreclosure process, resulting in incongruous jumps in various stages of foreclosure activity in markets such as New York, New Jersey and DC.” Lenders started the foreclosure process on 383,701 US properties in 2017, down 20% from 2016 and down 82% from a peak of 2,139,005 in 2009 to a new all-time low going back as far as foreclosure start data is available — 2006. “Across Southern California, while foreclosures have maintained historically low levels during much of 2017, housing affordability has become the concern that has many watching the market for a potential shift in the near future,” said Michael Mahon, president of First Team Real Estate, covering the Southern California market, which also posted an 11-year low in foreclosure starts in 2017. “With wage growth not meeting equity growth across many Southern California markets — coupled with rising interest rates — there are some concerns that foreclosures could be on the rise in 2018.”
Counter to the national trend, the District of Columbia and five states posted year-over-year increases in foreclosure starts in 2017, including Illinois (up 2%); Oklahoma (up 23%); Louisiana (up 2%); DC (up 54%); West Virginia (up 32%); and Vermont (up 27%). A total of 318,165 US properties were scheduled for public foreclosure auction (the same as a foreclosure start in some states) in 2017, down 27% from 2016 and down from a peak of 1,600,593 in 2010 to a new all-time low going back as far as foreclosure auction data is available — 2006. “The data for the Seattle market tells a very big story, and that is we are not seeing a housing bubble forming,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market, where scheduled foreclosure auctions in 2017 dropped 47% to an 11-year low. “With foreclosure rates at less than 0.4% of total housing units, the market is remarkably stable. That said, we are certainly suffering from serious affordability issues, but this is not translating into defaults on loans.” The District of Columbia and seven states posted a year-over-year increase in scheduled foreclosure auctions in 2017, including New York (up 9% to the highest level since 2006); Oklahoma (up 4%); Connecticut (up 7%); and Maine (up 2%). Lenders repossessed 291,579 properties through foreclosure (REO) in 2017, down 23% from 2016 and down 72% from a peak of 1,050,500 in 2010 to the lowest level since 2006 — an 11-year low. Counter to the national trend, the District of Columbia and seven states posted a year-over-year increase in REOs in 217, led by New Jersey (19% increase to the highest level since 2006); Delaware (up 16%); Montana (up 12%); DC (up 10%); and Wyoming (up 10%). States with the highest foreclosure rates in 2017 were New Jersey (1.61% of housing units with a foreclosure filing); Delaware (1.13%); Maryland (0.95%); Illinois (0.86%); and Connecticut (0.78%).Rounding out the top 10 states with the highest foreclosure rates were Florida (0.72%); South Carolina (0.70%); Ohio (0.70%); Nevada (0.67%); and New Mexico (0.63%). Among 217 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in 2017 were Atlantic City, New Jersey (2.72% of housing units with a foreclosure filing); Trenton, New Jersey (1.68%); Philadelphia, Pennsylvania (1.26%); Fayetteville, North Carolina (1.17%); and Rockford, Illinois (1.14%). Rounding out the top 10 were Cleveland, Ohio (1.06%); Columbia, South Carolina (1.05%); Baltimore, Maryland (1.05%); Chicago, Illinois (1.04%); and Albuquerque, New Mexico (0.99%).
US properties foreclosed in the fourth quarter of 2017 had been in the foreclosure process an average of 1,027 days, a 14% jump from the previous quarter and a 28% increase from a year ago to the longest since ATTOM began tracking average foreclosure timelines in Q1 2007. States with the longest average time to foreclose in Q4 2017 were Indiana (2,370 days); Nevada (1,933 days); Florida (1,493 days); New Jersey (1,298 days) and Georgia (1,263 days). Among 233 counties nationwide with sufficient data, those with the longest average time to foreclose in Q4 2017 were Queens County, New York; Marion County (Indianapolis), Indiana (2,810 days); Orange County (Orlando), Florida (2,109 days); Henry County (Atlanta), Georgia (2,075 days); and Cherokee County (Atlanta), Georgia (1,988 days). Nationwide, 50% of all loans actively in foreclosure as of the end of 2017 were originated between 2004 and 2008 — down from 55% a year ago. States with the highest number of legacy foreclosures on loans originated between 2004 and 2008 were New York (25,886), New Jersey (20,172), Florida (19,494), California (9,847), and Illinois (8,732). Legacy foreclosures on loans originated between 2004 and 2008 represented 74% of all active loans in foreclosure in the District of Columbia, higher than any state with at least 100 active loans in foreclosure, followed by Hawaii (67%), New Jersey (58%), Massachusetts (58%), Florida (55%), and Nevada (55%). Counties with the highest total number of legacy foreclosures were Nassau County (Long Island), New York (6,782); Cook County (Chicago), Illinois (5,478); Kings County (Brooklyn), New York (4,677); Miami-Dade County, Florida (3,804); and Suffolk County (Long Island), New York (3,417).
Oil prices fall as US output rise outweighs crude stock falls
Oil prices slid on Friday, putting them on course for the biggest weekly falls since October, as a bounce-back in US production outweighed ongoing declines in crude inventories. Brent crude futures were at $68.70 a barrel at 0949 GMT, down 61 cents from their last close. On Monday, they hit their highest since December 2014 at $70.37. US West Texas Intermediate crude futures were at $63.38 a barrel, down 57 cents from their last settlement. WTI marked a December-2014 peak of $64.89 a barrel on Tuesday. The International Energy Agency (IEA), in its monthly report, said that global oil stocks have tightened substantially, aided by OPEC cuts, demand growth and Venezuelan production hitting near 30-year lows. But it warned that rapidly increasing production in the United States could threaten market balancing. “Explosive growth in the US and substantial gains in Canada and Brazil will far outweigh potentially steep declines in Venezuela and Mexico,” the IEA said of 2018 production. US crude oil production stood at 9.75 million barrels per day (bpd) on Jan. 12, data from the Energy Information Administration showed. The IEA said it expects this to soon exceed 10 million bpd, overtaking OPEC behemoth Saudi Arabia and rivaling Russia.
Analysts also pointed to an expected demand slowdown at the end of winter in the northern hemisphere and excessive long positions in financial oil markets as a likely brake on any upward momentum in prices. ANZ bank said “an upcoming soft patch in demand and extreme investor positioning does open up the possibility of some short-term weakness.” Overall, however, oil prices remain well supported, and most analysts do not expect steep declines. The main price driver has been a production cut by a group of major oil producers around the Organization of the Petroleum Exporting Countries (OPEC) and Russia, who started to withhold output in January last year. The supply cuts by OPEC and its allies, which are scheduled to last throughout 2018, were aimed at tightening the market to prop up prices. In the United States, crude inventories fell 6.9 million barrels in the week to Jan. 12, to 412.65 million barrels. That’s their lowest seasonal level in three years and below the five-year average marker around 420 million barrels.
NAHB – single-family sector boosts housing production in 2017, more gains expected this year
Nationwide housing starts fell 8.2% in December to a seasonally adjusted annual rate of 1.19 million units after an upwardly revised November reading, according to newly released data from the US Department of Housing and Urban Development and the Commerce Department. The December numbers show a return to trend after an especially strong November report, but overall 2017 saw significant gains in housing production. Starts rose 2.4% last year, pushed up by an 8.5% jump in the single-family sector. Multifamily starts dropped 9.8%. Looking at the December 2017 report, single-family starts fell 11.8% to a seasonally adjusted annual rate of 836,000 units. However, the three-month moving average for single-family production reached a post-recession high. Meanwhile, multifamily starts ticked up 1.4% to 356,000 units. “There is a pro-business sentiment in Washington right now, and our builders hope to continue receiving relief from overly burdensome regulations,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “This political climate is boosting their optimism in the housing market.” “A return to normal levels of housing production this month is expected after a very strong fall season,” said NAHB Chief Economist Robert Dietz. “We saw a surge of housing activity in the South after hurricane-related delays, and now that region is returning to its positive growth trend.”
NAHB is forecasting continued growth in housing production this year, led by ongoing single-family gains. Total housing starts are expected to grow 2.7% to 1.25 million units. Single-family production should increase 5% to 893,000 units while the multifamily sector is expected to edge 1.6% lower this year to 354,000. Regionally in December, combined single- and multifamily housing production fell 0.9% in the West, 2.2% in the Midwest, 4.3% in the Northeast and 14.2% in the South.Overall permit issuance in December was essentially flat, inching down 0.1% to a seasonally adjusted annual rate of 1.302 million units. Single-family permits rose 1.8% to 881,000 units while multifamily permits fell 3.9% to 421,000. Permits rose 43% in the Northeast, 8.7% in the Midwest and 1.7% in the West. Permits declined 11.1% in the South, led by a drop on the multifamily front.
Congress likely racing toward a government shutdown
A bitterly divided Congress hurtled toward a government shutdown this weekend in a partisan stare-down over demands by Democrats for a solution on politically fraught legislation to protect about 700,000 younger immigrants from being deported. Democrats in the Senate have served notice they will filibuster a four-week, government-wide funding bill that cleared the House Thursday evening, seeking to shape a subsequent measure but exposing themselves to charges they are responsible for a looming shutdown. Republicans controlling the narrowly split chamber took up the fight, arguing that Democrats were holding the entire government hostage over demands to protect “dreamer” immigrants brought to the country illegally as children. “Democratic senators’ fixation on illegal immigration has already blocked us from making progress on long-term spending talks,” said Senate Majority Leader Mitch McConnell, R-Ky. “That same fixation has them threatening to filibuster funding for the government.” President Donald Trump entered the fray early Friday morning, mentioning the House-approved bill on Twitter, adding: “Democrats are needed if it is to pass in the Senate – but they want illegal immigration and weak borders. Shutdown coming? We need more Republican victories in 2018!” In the House, Republicans muscled the measure through on a mostly party-line 230-197 vote after making modest concessions to chamber conservatives and defense hawks. House Speaker Paul Ryan immediately summoned reporters to try to pin the blame on top Senate Democrat Chuck Schumer of New York.
MBA – statement on FHFA’s perspective on housing finance reform
David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA), released the following statement regarding FHFA’s paper entitled, “Federal Housing Finance Agency Perspectives on Housing Finance Reform”:
“MBA applauds FHFA Director Mel Watt for releasing this important paper which reinforces the need for comprehensive legislative housing finance reform. There are many similarities between this proposal and MBA’s own plan including the need for a government guarantee behind MBS to support single-family and multifamily finance, two or more competing guarantors, the use of a single security in the single family market, and a level playing field for lenders of all sizes and business models. We look forward to continuing to work with Congressional leaders, the Administration, Director Watt, and other stakeholders to create a secondary mortgage market that provides a more stable system and broad, sustainable access to credit for all qualified borrowers.”
NAHB – remodeling market indicators hit high in fourth quarter
The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) posted a reading of 60 in the fourth quarter of 2017, up three points from the previous quarter and only the second time since 2001 the reading has reached 60. For 19 consecutive quarters, the RMI has been at or above 50, which indicates that more remodelers report market activity is higher compared to the prior quarter than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity. “A booming stock market and low unemployment continue to fuel consumers’ investment in their homes,” said NAHB Remodelers Chair Joanne Theunissen, CGP, CGR, a remodeler from Mt. Pleasant, Mich. “Natural disaster-related repairs also caused strong demand for maintenance and repair projects.” Current market conditions increased four points from the third quarter of 2017 to 60. Among its three major components, major additions and alterations jumped seven points to 60, minor additions and alterations increased three points to 59, and the home maintenance and repair component rose three points to 61. The future market indicators index rose one point from the previous quarter to 59. Calls for bids decreased two points to 56, amount of work committed for the next three months rose two points to 58, the backlog of remodeling jobs gained a significant six points to 66 and appointments for proposals fell two points to 57. “At a high of 60, the RMI is consistent with the strong growth in home improvement spending in 2017,” said NAHB Chief Economist Robert Dietz. “However, the surge in the backlog of remodeling jobs likely reflects supply-side challenges remodelers are facing in the form of skilled labor shortages and rising material prices.”