Real estate affordability sets record in Q4
Indiana, Michigan, Ohio metros dominate for most affordable housing
By Inman News
Inman News™
February 17, 2011
Home affordability rose to its highest level in at least 20 years in the fourth quarter of 2010, according to an index released by the National Association of Home Builders and Wells Fargo today.
The Housing Opportunity Index found that 73.9 percent of new and existing homes sold in the fourth quarter were affordable to families earning the national median income of $64,400 -- surpassing the previous high, 72.5 percent, recorded in the first quarter of 2009.
"Today's report shows that housing affordability at the end of 2010 was at its highest level since we started computing the HOI," said Bob Nielsen, NAHB's chairman, in a statement. "However, while this is good news for consumers, both homebuyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales."
Before 2009, the index had never hit 70 percent and rarely topped 65 percent, the association said. Last quarter was the eighth straight quarter the index was above 70 percent.
Three states dominated among the top 10 most affordable metropolitan areas overall: Indiana, Michigan and Ohio. Elkhart-Goshen, Ind., ranked highest, with 97 percent of its homes affordable to a family making the area's median income. All but one (Indianapolis-Carmel, Ind.) among the top 10 had populations under 500,000.
Friday, February 18, 2011
Mortgage delinquencies lowest in 2 years
Mortgage delinquencies lowest in 2 years
MBA economist: U.S. has 'turned the corner' in foreclosure crisis
By Inman News
Inman News™
February 18, 2011
The percentage of mortgage holders who were behind on their payments dropped to the lowest level in two years during the fourth quarter of 2010, the Mortgage Bankers Association said in a report today.
At 8.22 percent, the seasonally adjusted delinquency rate was down from 9.13 percent during the third quarter and 9.47 percent from a year ago.
The percentage of mortgages in foreclosure climbed from 4.39 percent during the third quarter to 4.63 percent during the last three months of the year, matching an all-time high.
Fewer loans are entering the foreclosure pipeline: the percentage of loans only one payment past due -- 3.25 percent -- was at the lowest level since 2007, and the foreclosure start rate fell from 1.34 percent during the third quarter to 1.27 percent.
The percentage of loans three payments or more past due was down from an all-time high of 5.02 percent at the end of the first quarter of 2010 to 3.63 percent at the end of the fourth quarter of 2010 -- a drop of almost 28 percent over the course of the year. All but two states saw a drop in the 90-plus-day delinquency rate, and the increases in those states were "negligible."
"While delinquency and foreclosure rates are still well above historical norms, we have clearly turned the corner" in the foreclosure crisis, MBA Chief Economist Jay Brinkmann said in a statement.
While unemployment remains high, the economy added more than 1.2 million private-sector jobs during 2010 and first-time unemployment claims fell during the second half of the year, Brinkmann said. Absent a significant economic reversal, he said, "the delinquency picture should continue to improve during 2011."
The MBA National Delinquency survey covers 43.6 million loans -- about 88 percent of all outstanding first-lien mortgages. If the survey's results are extrapolated, about 4.1 million homeowners were 30, 60 or 90 days or more behind on their mortgage payments during the fourth quarter, and another 2.3 million were in the foreclosure process.
MBA economist: U.S. has 'turned the corner' in foreclosure crisis
By Inman News
Inman News™
February 18, 2011
The percentage of mortgage holders who were behind on their payments dropped to the lowest level in two years during the fourth quarter of 2010, the Mortgage Bankers Association said in a report today.
At 8.22 percent, the seasonally adjusted delinquency rate was down from 9.13 percent during the third quarter and 9.47 percent from a year ago.
The percentage of mortgages in foreclosure climbed from 4.39 percent during the third quarter to 4.63 percent during the last three months of the year, matching an all-time high.
Fewer loans are entering the foreclosure pipeline: the percentage of loans only one payment past due -- 3.25 percent -- was at the lowest level since 2007, and the foreclosure start rate fell from 1.34 percent during the third quarter to 1.27 percent.
The percentage of loans three payments or more past due was down from an all-time high of 5.02 percent at the end of the first quarter of 2010 to 3.63 percent at the end of the fourth quarter of 2010 -- a drop of almost 28 percent over the course of the year. All but two states saw a drop in the 90-plus-day delinquency rate, and the increases in those states were "negligible."
"While delinquency and foreclosure rates are still well above historical norms, we have clearly turned the corner" in the foreclosure crisis, MBA Chief Economist Jay Brinkmann said in a statement.
While unemployment remains high, the economy added more than 1.2 million private-sector jobs during 2010 and first-time unemployment claims fell during the second half of the year, Brinkmann said. Absent a significant economic reversal, he said, "the delinquency picture should continue to improve during 2011."
The MBA National Delinquency survey covers 43.6 million loans -- about 88 percent of all outstanding first-lien mortgages. If the survey's results are extrapolated, about 4.1 million homeowners were 30, 60 or 90 days or more behind on their mortgage payments during the fourth quarter, and another 2.3 million were in the foreclosure process.
Weekly Economic Summary-Mortgage Rates & More
Weekly Economic Summary – February 17, 2011
Last week in review
(February 4 – 11, 2011)
To say that bonds have had a rough time lately would be a bit of an understatement, as bond pricing and home loan rates worsened very significantly over the past week and a half. By the end of last week, however, bonds looked like they were beginning to stabilize.
Impacting bonds last week were a number of remarks by Fed members, including Fed Chairman Ben Bernanke who spoke on Capitol Hill, saying it will take several more years before the unemployment rate returns to a more normal level and that lawmakers need to act to reduce the country’s deficit.
The recent tough times for bonds and home loan rates underscores the current opportunity, rates are still relatively low, but gradually creeping higher.
In the news this week (February 14 – 18, 2011)
After last week’s slow schedule of economic reports, we saw some influential reports this week. We’ll talk about this week’s reports next time and their impact on the bond market.
Tuesday morning we saw the January report of Retail Sales, which is considered a timely indicator of broad consumer spending patterns.
We also saw manufacturing news with Tuesday’s Empire State Index, which looks at New York State’s manufacturing sector and is a good gauge of manufacturing overall. Then on Thursday, we saw the Philadelphia Fed Index, which is another important manufacturing report.
On Wednesday and Thursday there was some inflation news with the Producer Price Index (PPI), which measures inflation at the wholesale level, and the Consumer Price Index (CPI), which measures inflation at the consumer level.
Wednesday we also saw housing industry news with reports on the number of Housing Starts and Building Permits in January.
Finally, the busy week of reports was capped off Thursday with the Initial Jobless Claims report.
As you can see in the chart below, bonds and home loan rates have had a tough time recently but were able to stabilize at the end of last week. In the end, bonds and home loan rates finished the week just slightly below where they started, but home loan rates are still near historic lows for now.
Last week in review
(February 4 – 11, 2011)
To say that bonds have had a rough time lately would be a bit of an understatement, as bond pricing and home loan rates worsened very significantly over the past week and a half. By the end of last week, however, bonds looked like they were beginning to stabilize.
Impacting bonds last week were a number of remarks by Fed members, including Fed Chairman Ben Bernanke who spoke on Capitol Hill, saying it will take several more years before the unemployment rate returns to a more normal level and that lawmakers need to act to reduce the country’s deficit.
The recent tough times for bonds and home loan rates underscores the current opportunity, rates are still relatively low, but gradually creeping higher.
In the news this week (February 14 – 18, 2011)
After last week’s slow schedule of economic reports, we saw some influential reports this week. We’ll talk about this week’s reports next time and their impact on the bond market.
Tuesday morning we saw the January report of Retail Sales, which is considered a timely indicator of broad consumer spending patterns.
We also saw manufacturing news with Tuesday’s Empire State Index, which looks at New York State’s manufacturing sector and is a good gauge of manufacturing overall. Then on Thursday, we saw the Philadelphia Fed Index, which is another important manufacturing report.
On Wednesday and Thursday there was some inflation news with the Producer Price Index (PPI), which measures inflation at the wholesale level, and the Consumer Price Index (CPI), which measures inflation at the consumer level.
Wednesday we also saw housing industry news with reports on the number of Housing Starts and Building Permits in January.
Finally, the busy week of reports was capped off Thursday with the Initial Jobless Claims report.
As you can see in the chart below, bonds and home loan rates have had a tough time recently but were able to stabilize at the end of last week. In the end, bonds and home loan rates finished the week just slightly below where they started, but home loan rates are still near historic lows for now.
Thursday, February 17, 2011
Todys Market Upate
The minutes from last month’s FOMC meeting were largely uneventful and indicated that Fed members believed the economy had improved slightly, but the committee was still extremely concerned about the unemployment picture. This morning, initial jobless claims for unemployment insurance during the previous week were reported higher, confirming that the U.S. labor market will take time to recover. Pro-democracy protests in the Middle East are lifting the treasury markets. Treasury and mortgage prices are higher this morning, with interest rates a bit lower.
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