Housing Starts Soften After Last Month’s Highs

DAILY REAL ESTATE NEWS | TUESDAY, JANUARY 21, 2014

New-home construction posted its largest percentage decrease since April, a big fall after last month’s surge, the Commerce Department reports. Housing starts dropped 9.8 percent in December to a seasonally adjusted annual rate of just under 1 million units.

The drop follows a sharp rise in November, in which new-housing starts had accelerated to the fastest pace since February 2008. 

Single-family home construction, which makes up the largest segment of starts, dropped 7 percent in December to a seasonally adjusted annual rate of 667,000 units. However, total single-family housing starts still mark the highest monthly total in 2013, except for November. Multifamily starts fell 14.9 percent for the month. 

Regionally, housing starts dropped the most in the Midwest, falling 33.5 percent, which most economists say recent frigid weather likely was to blame.

Housing permits, a sign of future home construction, dropped 3 percent in December, mostly weighed down by a 4.8 percent drop in permits for single-family homes, the Commerce Department reports. 

Despite December’s drop, housing starts were up year over year. Housing starts jumped 18.3 percent in 2013 over 2012 data, the Commerce Department reports. 

"Last year was a good year for home building," says David Crowe, National Association of Home Builders’ chief economist. "As pent-up demand is unlocked and the labor market improves, we anticipate that 2014 should be an even better year for home construction. That's good news for economic growth, as each new home that is built creates three full-time jobs and contributes to the tax base of local communities."

Source: “U.S. Housing Starts Fall Less Than Expected, Weather May be a Factor,” Reuters (Jan. 17, 2014) and National Association of Home Builders

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http://realtormag.realtor.org/daily-news/2014/01/21/housing-starts-soften-after-last-month-s-highs

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2013 Year-End Foreclosure Report: Filings Fall 26%

DAILY REAL ESTATE NEWS | FRIDAY, JANUARY 17, 2014

Last year, the foreclosure crisis began dissipating. Foreclosure filings -- including default notices, scheduled auctions, and bank repossessions -- were down 26 percent in 2013 compared to 2012, and were down 53 percent from the peak in 2010, according to RealtyTrac’s Year-End 2013 Foreclosure Market report.

The 1.4 million properties with foreclosure filings in 2013 marked the lowest amount since 2007. 

During the year, one in every 96 homes -- or about 1.04 percent of U.S. housing units -- received a foreclosure filing. That’s down from a peak of 2.23 percent of housing units in 2010. 

The following states had the highest foreclosure filing rates in 2013: 

• Florida: 3.01% of all housing units received a foreclosure filing
• Nevada: 2.16%
• Illinois: 1.89%
• Maryland: 1.57%
• Ohio: 1.53%

The average estimated value of a property receiving a foreclosure filing in 2013 was $191,693 at the time of the foreclosure filing -- a 1 percent increase from the average value in 2012, according to the RealtyTrac report. What’s more, the average estimated value of properties that received foreclosure filings in 2013 rose 10 percent since the foreclosure notice was filed. 

The national average time to complete a foreclosure rose 3 percent in the fourth quarter of 2013 to a record high of 564 days. The states that face the longest times to foreclose are New York (1,029 days), New Jersey (999 days), and Florida (944 days), according to the RealtyTrac report. 

“Millions of home owners are still living in the shadow of the massive foreclosure crisis that the country experienced over the past eight years since the housing price bubble burst — both in the form of homes lost to directly to foreclosure as well as home equity lost as a result of a flood of discounted distressed sales,” says Daren Blomquist, vice president at RealtyTrac. “But the shadow cast by the foreclosure crisis is shrinking as fewer distressed properties enter foreclosure and properties already in foreclosure are poised to exit in greater numbers in 2014 given the greater numbers of scheduled foreclosure auctions in 2013 in judicial states — which account for the bulk of U.S. foreclosure inventory.”

Source: RealtyTrac

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http://realtormag.realtor.org/daily-news/2014/01/17/2013-year-end-foreclosure-report-filings-fall-26

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2 Bank Giants See Shrinking Mortgage Business

DAILY REAL ESTATE NEWS | WEDNESDAY, JANUARY 15, 2014

With rising mortgage rates, fewer people are refinancing their mortgages, which means big banks are seeing a dip in mortgage lending. 

Wells Fargo funded $50 billion in residential mortgages during the fourth quarter, a 60 percent drop from $125 billion a year earlier. Wells Fargo, the largest mortgage lender in the country, is also losing some of its market share. It controls about 19 percent of the U.S. mortgage market, which is a decrease from 30 percent a year ago, according to Mortgage Finance.  The last time the bank issued such few home loans was during 2008 in the midst of the financial crisis. 

Still, No. 2 J.P. Morgan did about half of Wells Fargo’s business, funding $23.3 billion in mortgage loans in the fourth quarter, a 54 percent drop from a year earlier. That is also the bank’s lowest amount in originations since before the financial crisis. 

“This is something we expected,” says Tim Sloan, Wells Fargo’s chief financial officer. “Originating $50 billion of mortgages in a quarter is a good feat. It just happens to be a little less than it was in the prior quarter.”

Wells Fargo says that about two-thirds of its loan volume was coming from refinancing and now two-third of its business is being driven by applications for home purchases instead. 

With a shrinking refi business, however, some lenders may look to generate extra mortgage revenue by easing up credit standards to try to attract more loan applicants, The Wall Street Journal reports. 

Source: “The End of the Mortgage Party? Home Lending Plummets at Wells Fargo, JP Morgan Chase,” The Wall Street Journal (Jan. 15, 2014)

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http://realtormag.realtor.org/daily-news/2014/01/15/2-bank-giants-see-shrinking-mortgage-business

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