Posts

Mortgage Credit Risk Increased in Q2 2017

Housing Credit Insights Trends Through Q2 2017

The CoreLogic Housing Credit Index is a robust credit index that measures mortgage credit risk using six mortgage credit attributes. The HCI spans more than 15 years, covers all loan products in both the prime and subprime lending segments and includes all 50 states and the District of Columbia, permitting peak to trough business cycle comparisons across the U.S.

The CoreLogic Housing Credit Index (HCI) measures the variation in mortgage credit risk attributes and uses loan attributes from mortgage loan servicing data that are combined in a principal component analysis (PCA) model. PCA can be used to reduce a complex data set (e.g., mortgage loan characteristics) to a lower dimension to reveal properties that underlie the data set.

 

The HCI combines six mortgage credit risk attributes, including borrower credit score, loan-to-value (LTV) ratio, debt-to-income (DTI) ratio, documentation level (full documentation of a borrower’s economic conditions or incomplete levels of documentation, including no documentation), status of investor-owned (whether property is a non-owner-occupied investment or owner-occupied primary residence and second home), and property type (whether property is a condominium or co-op). It spans more than 15 years, covers all loan products in both the prime and subprime lending segments and includes all 50 states and the District of Columbia, permitting peak-to-peak and trough-to-trough business cycle comparisons across the U.S. The CoreLogic Loan-Level Market Analytics data include loan-level information, both current and historical, from servicers on active first-lien mortgages in the U.S. and the Non-Agency Residential Mortgage Backed Securities (RMBS) data include loan-level information from the securitizers. In addition, CoreLogic public records data for the origination share by loan type (conventional conforming, government, jumbo) were used to adjust the combined servicing and securities data to assure that it reflects primary market shares. These changes across different dimensions are reflected in the HCI. A rising HCI indicates increasing credit risk and a declining HCI indicates decreasing credit risk.

Orlando Eye developer submits plans for luxury lakefront homes

A well-known developer is moving forward with plans to put 13 multimillion-dollar on the last large developable land tract off the Butler Chain of Lakes.

Unicorp National Developments Inc. on Sept. 12 filed a preliminary subdivision plan in Orange County to build a 13-lot single-family development on 16.59 acres of The Hubbard Estate.

The development would be inside Arnold Palmer‘s Bay Hill community just west of the golf course on the shores of Lake Tibet in Orange County, Orlando Business Journal previously reported.

Unicorp has selected a couple of builders, including Jones Clayton Construction Inc., which provided renderings of the first speculation home that will be built in the neighborhood at 9000 Hubbard Place. A name for the subdivision has not been finalized yet.

Unicorp President Chuck Whittall previously told Orlando Business Journal the home prices would range from $5 million-$15 million.

The owners of The Hubbard Estate — the 2012 Hubbard Family Trust — authorized on June 13 Orlando-based Bio-Tech Consulting Inc. to make a conservation area determination on behalf of Unicorp, OBJ previously reported.

Jones Clayton Construction was not immediately available for comment.

Unicorp is the developer behind the I-Drive 360, Westside Shoppes, the Starflyer under construction on International Drive, and a host of other projects.

How Irma will affect real estate market

Like it did to everything else in Northeast Florida, Hurricane Irma dealt a significant impact to the residential real estate market.

But, like much else, it will come back, according to real estate professionals who’ve weathered the storms for years.

Bill Watson, founder and chairman of Watson Realty Corp., said the local effects of the hurricane began Sept. 8 for his 1,600 employees in 43 offices in North and Central Florida and South Georgia. That was two days before the storm made landfall in the Florida Keys.

“The first phase is when the hurricane warning comes. When the schools close, that affects your workforce,” he said.

Most Realtors are independent contractors and when schools are closed by an approaching storm, they take care of their children and families, Watson said.

After Irma, it was time to assess the damage on the personal and corporate levels and return to work. For many, that began about 12 hours after the storm left the area.

“We reopened Tuesday at noon. Two agents took clients to see houses and we also closed two contracts on Wednesday,” said Sherry Davidson, co-founder of Davidson Realty, which has offices in Jacksonville Beach and St. Augustine.

Linda Sherrer, CEO and president of Berkshire Hathaway Home Services Florida Network Realty, said five of her firm’s eight offices opened Tuesday, followed by the other three on Wednesday when power was restored to those locations.

The first step was to determine if properties had been damaged.

“Our agents started calling all of their listings and all of their buyers,” Sherrer said.

The post-storm phase brings its own challenges that involve title companies and lenders.

Unless a contract was executed, lenders won’t fund the loan until the home is inspected to determine whether the property was damaged. That will probably mean adding about a week or 10 days to the process, Davidson said.

Watson said damage to a property that’s under contract doesn’t necessarily void a sale, provided repairs can be completed within a set time.

“You have 10 days to determine whether the damage is minor and if so, the seller has to notify the buyer,” he said. “If the damage is minor, the seller has 30 days to repair it.”

If the damage is more than what’s considered minor — about 3 percent of the value — the buyer has the option to continue to closing or walk away from the contract, Watson said.

After the initial disruption, the market will return to its previous level, said Sherrer, who has been selling real estate in Northeast Florida through good weather and bad since 1979.

“We’ve got low inventory and low interest rates and demand is very strong. That points to a strong rebound,” she said.

The number of that were damaged will make the untouched properties increase in value.

“If you have an undamaged house that’s ready to move in, you’ll be able to bump up the price. There are still plenty of buyers, but not as much inventory,” Watson said.

He also said Hurricane Irma probably will change the market for the next several months.

“We’ll never get the September business back. And it probably won’t be really back in October, but November and December will be better than they should have been.”

Florida dealing with Hurricane Irma aftermath

Millions of Floridians are cleaning up the damage wreaked by Hurricane Irma as a Navy aircraft carrier arrives in the Keys, where up to 10,000 people may need to be evacuated.

USS Abraham Lincoln reached the Florida Keys on Monday and its helicopters are flying over the region to survey the damage.

The Navy has also dispatched two amphibious assault ships, the USS Iwo Jima and the USS New York, to help with recovery efforts.

Despite leaving a trail of devastation through Florida, Irma has now been downgraded to a tropical storm and is dumping rains across the South in Georgia, South Carolina, North Carolina, Alabama and Tennessee on Tuesday.

Rebuilding efforts in Florida could be hampered by temperatures of up to 90F in the coming days. This will be compounded by the fact that there is no air conditioning, as some 12.5million people in the southeast have been left without power.

The powerful hurricane made landfall Sunday morning in the Florida Keys as a category 4 storm and then made its way up the Gulf Coast – swamping downtown Miami with storm surge and blowing the roofs off .

As of Tuesday morning, officials in the upper Keys were allowing residents and business owners to return and assess damage.

So far, the storm is believed to have caused at least 11 deaths in the US – including two in the Florida Keys, which was under mandatory evacuation during the storm. A 51-year-old Florida man was electrocuted by a downed power line on Monday, while another man – Wilfredo Hernandez – was accidentally killed by a chainsaw in Hillsborough as he helped cut tree branches.

Three people were also killed in Georgia and one in South Carolina on Monday.

 

Home sales drop—again—and will continue ‘unless supply miraculously improves’

House . Real Estate Sign in Front of a House.

After a brief improvement in June, home sales continued their downward slide in July, with buyers signing fewer contracts to purchase existing .

An index of so-called pending home sales, which represent closings one to two months from now, fell 0.8 percent compared with June, according to the National Association of Realtors. That is the fourth monthly drop in the past five months. June’s reading was also revised lower. The index is now 1.3 percent below a year ago and has fallen on an annual basis in three of the past four months.

“Buyer traffic continues to be higher than a year ago, the typical listing has gone under contract within a month since April,” said Lawrence Yun, chief economist for the Realtors. “The reality, therefore, is that sales in coming months will not break out unless supply miraculously improves. This seems unlikely given the inadequate pace of housing starts in recent months and the lack of interest from real estate investors looking to sell.”

 The supply of homes for sale at the end of July came in at 2.11 million, 9 percent lower than a year ago. That has fallen year over year for 26 consecutive months.

The housing market remains stuck in a holding pattern with little signs of breaking through. The pace of new listings is not catching up with what’s being sold at an astonishingly fast pace,” Yun added.

Closed sales to buy existing homes fell more than expected in July, with Realtors citing the lack of supply as the primary reason. Prices are also a factor though. The median price of a home sold in July hit $258,300, the highest July price on record. Mortgage rates have been falling through the summer and are now sitting at 2017 lows, but they are still slightly higher than one year ago. Rates have been so low for so long that they provide little relief from the fast-rising prices.

California, which boasts the priciest and tightest in the nation, saw sales slip across the board in July. The number of homes for sale fell yet again and prices hit decade highs.

“The San Francisco Bay Area posted modest year-over-year gains in home sales this May and June, but a tight inventory and waning affordability have taken a toll, and July 2017 sales fell to the lowest level for a July in six years,” said Andrew LePage, research analyst at CoreLogic.

Pending home sales in the Northeast fell 0.3 percent for the month and were 2.4 percent above a year ago. In the Midwest, sales decreased 0.7 percent for the month and were 2.8 percent lower than July 2016. In the South, sales declined 1.7 percent from June and were 0.2 percent below last July. In the West, sales rose 0.6 percent for the month but were 4.0 percent below a year ago.

Yun noted that national sales numbers could weaken more than expected this fall, due to the disruption in the Houston housing market from Hurricane Harvey.

Orlando-area home sales down despite record job growth

http://www.orlandosentinel.com/business/94337272-132.html

Home prices and sales in the core Orlando market were down in July from the month before during what is usually the peak summer buying season.

The midpoint price for an area that includes mostly Orange and Seminole counties was $220,000 in July, down from $222,500 the prior month, according to a report released Tuesday by Regional Realtor Association.

More dramatic than the slight softening in prices was the 14 percent, month-over-month drop in sales to 3,347 for July. Typically sales boom as families relocate prior to the start of the school year.

The association cited a slim inventory of listings as the culprit for what has been a less-than-spectacular summer.

“Would-be first-time homebuyers are being kept on the sidelines by limited inventory and rising prices,” said Bruce Elliott, president of the association and broker associate with Regal R. E. Professionals LLC. “However, rising prices have slowed some of the investor activity, which could mean slightly less competition for at the lower end of the market.”

Compared with a year ago, Orlando’s median home price for July was $14,000 higher.

Orlando real estate Serina Marshall said millennials in particular face a challenge as wages stagnate and prices rise for a group of would-be buyers who are affected by student loan debts, too. Renters in that age bracket also deal with rent spikes and find themselves with few options at lease renewal time.

“Those prices are being jacked up a lot and people are being forced to move out of their apartments to find something more affordable,” said Marshall, an agent with Re/Max Town Centre.

What has not grown from a year ago is the pace of monthly sales, which held flat from a year earlier. The flat sales growth comes despite record job growth for Orlando, which averaged 150 new jobs daily during a 12-month period that ended in June, according to a review of federal jobs numbers.

The headwinds facing newly employed Central Floridians are home prices rising 6.8 percent during a year-long period in which wages rose about 1 percent, according to the federal housing department. Making ownership an even more distant dream, financing has become costlier. July buyers secured average interest rates of 4.01 percent, which was up about a half point from a year ago and up slightly from a month earlier.

Within the four counties that make up Metro Orlando, only Lake showed strong sales growth in July from July 2016. Sales there were up more than 12 percent, while sales in Orange and Osceola counties were largely flat and Seminole was down more than 8 percent.

U.S. Mortgage Rates Move Lower in Mid-July

According to Freddie Mac’s latest Primary Mortgage Market Survey, the average U.S. mortgage rate dropped in mid-July, after two straight weeks of increases.

Sean Becketti, chief economist at Freddie Mac, “Continued economic uncertainty and weak inflation data pushed rates lower this week. The 10-year Treasury yield fell 5 basis points this week. The 30-year mortgage rate moved with Treasury yields, dropping 7 basis points to 3.96 percent.”

Freddie Mac News Facts:

  • 15-year FRM this week averaged 3.23 percent with an average 0.5 point, down from last week when it averaged 3.29 percent. A year ago at this time, the 15-year FRM averaged 2.75 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.21 percent this week with an average 0.5 point, down from last week when it averaged 3.28 percent. A year ago at this time, the 5-year ARM averaged 2.78 percent.

Here Are 2017’s Best and Worst Cities to Retire

We work hard during our careers to enjoy a comfortable retirement, and for many of us, that means settling down someplace where our nest eggs can go the furthest. But for some folks, finding an affordable place to retire is a matter of basic survival. More than 40% of households aged 56 to 64 have no retirement savings to show for, or so states the Economic Policy Institute. And even among older workers who are saving, confidence about retiring comfortably is declining. With that in mind, WalletHub recently did a review of the top cities to retire in this year, as well as the least desirable cities for retirees. Here’s what they came up with.

What makes for a happy retirement?

Though money isn’t everything when it comes to retirement, it’s a big factor to consider. Even if your tastes are modest, and you’re naturally not such a big spender, you’re bound to encounter certain expenses outside your control. Take healthcare, for example, which, according to recent projections, could cost the average healthy 65-year-old couple today over $400,000 in retirement. It therefore stands to reason that finding a city with a relatively low cost of living can be crucial to your overall happiness as a senior.

But while is one of the metrics WalletHub reviewed in its recent study, it’s not the only one. Factors such as recreation, senior services and population, hospital systems, and even climate were all considered in compiling this list.

So which cities offer the best overall quality of life for retirees? Among the 150 cities reviewed by WalletHub, here are the top 10:

Rank: Best Overall City
1 , FL
2 Tampa, FL
3 Miami, FL
4 Scottsdale, AZ
5 Atlanta, GA
6 Salt Lake City, UT
7 Honolulu, HI
8 Denver, CO
9 Austin, TX
10 Las Vegas, NV

DATA SOURCE: WALLETHUB.

Keep in mind that these 10 cities aren’t necessarily the most affordable. In fact, some, like Honolulu and Denver, scored relatively low on affordability alone. If a low cost of living is paramount in your mind, here are the top 10 cities you might consider as a retiree:

Rank: Most Affordable City
1 Laredo, TX
2 Brownsville, TX
3 St. Petersburg, FL
4 Montgomery, AL
5 San Antonio, TX
6 Memphis, TN
7 Tampa, FL
8 Orlando, FL
9 Lubbock, TX
10 Knoxville, TN

DATA SOURCE: WALLETHUB.

Of course, what you gain in affordability, you might forgo elsewhere. Take Laredo, Texas, the cheapest city for retirees. Though you might snag housing and groceries on the cheap, Laredo scored pretty low with regard to activities and amenities, and it came in nearly last on healthcare.

So which cities might you try to avoid as a senior? Here’s what the list of the 10 worst retiree states looks like:

Rank: Worst Overall City
1 Newark, NJ
2 Providence, RI
3 San Bernardino, CA
4 Worcester, MA
5 Detroit, MI
6 Fresno, CA
7 Stockton, CA
8 Modesto, CA
9 Fontana, CA
10 Rancho Cucamonga, CA

DATA SOURCE: WALLETHUB.

Most of the cities on this list scored relatively low in terms of affordability, and all landed at the bottom of the heap with regard to healthcare. Interestingly, none of the cities with the highest cost of living, including New York, New York; San Jose, California; and San Francisco, California, came even close to making the bottom 10 overall, which goes to show that money shouldn’t be the only factor to consider when determining where to live as a senior.

Finding the right place for your senior years

Clearly, the place you spend your days in retirement will have an impact on not just your budget but your everyday quality of life. If you’re not sure where to go once you stop working, try asking yourself the following questions:

  • How much do I want to spend on housing, transportation, and essentials? The more you fork over to cover your basic costs, the less cash you’ll have available for leisure. On the other hand, if you choose a city that offers much in the way of free entertainment, it might be worth the higher rent or mortgage. Furthermore, don’t just consider how much you want to spend but also what you can afford to spend. You might dream of retiring in Honolulu, but if your nest egg won’t hold up there, you’ll need to pick someplace with a lower cost of living.
  • How’s my health? Though having good access to healthcare is important for all retirees, if you have a known medical issue, you’ll need to pay even closer attention to how local hospitals and doctors are ranked. The last thing you want as a senior is to have to travel long distances to receive quality medical care.
  • How important is it for me to live near family? Your family might serve as a key social outlet and support system in retirement, so be sure to factor in proximity to children, siblings, and grandkids when deciding where to live. If you’re not willing to relocate to get closer (say, your family lives in an expensive city or someplace whose climate isn’t ideal), consider the cost of traveling from your city of choice to where your loved ones live, because you don’t want to grapple with perpetually pricey air fares when you’re stuck on a fixed income.

Choosing the right place to retire is crucial to your overall happiness. The more thought you put into where you retire, the more content you’re likely to be down the line.

Existing-Home Sales Retreat 1.8 Percent in June

Existing-Home Sales Retreat 1.8 Percent in June

WASHINGTON (July 24, 2017) — Existing-home sales slipped in June as low supply kept selling at a near record pace but ultimately ended up muting overall activity, according to the National Association of Realtors®. Only the Midwest saw an increase in sales last month.

Total existing-home sales1, https://www.nar.realtor/topics/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 1.8 percent to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month’s decline, June’s sales pace is 0.7 percent above a year ago, but is the second lowest of 2017 (February, 5.47 million).

Lawrence Yun, NAR chief economist, says the previous three-month lull in contract activity translated to a pullback in existing sales in June. “Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that’s straining their budget,” he said. “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”

Added Yun, “The good news is that sales are still running slightly above last year’s pace despite these persistent market challenges.”

The median existing-home price2 for all housing types in June was $263,800, up 6.5 percent from June 2016 ($247,600). Last month’s median sales price surpasses May as the new peak and is the 64th straight month of year-over-year gains.

Total housing inventory3 at the end of June declined 0.5 percent to 1.96 million existing homes available , and is now 7.1 percent lower than a year ago (2.11 million) and has fallen year-over-year for 25 consecutive months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.6 months a year ago.

First-time buyers were 32 percent of sales in June, which is down from 33 percent both in May and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 20164 – revealed that the annual share of first-time buyers was 35 percent.

“It’s shaping up to be another year of below average sales to first-time buyers despite a healthy that continues to create jobs,” said Yun. “Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers’ dreams of owning a home this year.”

According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage declined for the third consecutive month, dipping to 3.90 percent in June from 4.01 percent in May. The average commitment rate for all of 2016 was 3.65 percent.

Properties typically stayed on the market for 28 days in June, which is up from 27 days in May but down from 34 days a year ago. Short sales were on the market the longest at a median of 102 days in June, while foreclosures sold in 57 days and non-distressed homes took 27 days. Fifty-four percent of homes sold in June were on the market for less than a month.

Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in June were Seattle-Tacoma-Bellevue, Wash., 23 days; Salt Lake City, Utah, 26 days; San Jose-Sunnyvale-Santa Clara, Calif., 27 days; San Francisco-Oakland-Hayward, Calif., 29 days; and Denver-Aurora-Lakewood, Colo., at 30 days.

“Prospective buyers who postponed their home search this spring because of limited inventory may have better luck as the summer winds down,” said President William E. Brown, a Realtor® from Alamo, California. “The pool of buyers this time of year typically begins to shrink as households with children have likely closed on a home before school starts. Inventory remains extremely tight, but patience may pay off in coming months for those looking to buy.”

All-cash sales were 18 percent of transactions in June, down from 22 percent both in May and a year ago, and the lowest since June 2009 (13 percent). Individual investors, who account for many cash sales, purchased 13 percent of homes in June, down from 16 percent in May and unchanged from a year ago. Fifty-six percent of investors paid in cash in June.

Distressed sales5 – foreclosures and short sales – were 4 percent of sales in June, down from both May (5 percent) and a year ago (6 percent) and matching last September as the lowest share since NAR began tracking in October 2008. Three percent of June sales were foreclosures and 1 percent were short sales.

Single-family and Condo/Co-op Sales

Single-family home sales dipped 2.0 percent to a seasonally adjusted annual rate of 4.88 million in June from 4.98 million in May, but are still 0.6 percent above the 4.85 million pace a year ago. The median existing single-family home price was $266,200 in June, up 6.6 percent from June 2016.

Existing condominium and co-op sales were at a seasonally adjusted annual rate of 640,000 units in June (unchanged from May), and are 1.6 percent higher than a year ago. The median existing condo price was $245,900 in June, which is 6.5 percent above a year ago.

Regional Breakdown

June existing-home sales in the Northeast fell 2.6 percent to an annual rate of 760,000, but are still 1.3 percent above a year ago. The median price in the Northeast was $296,300, which is 4.1 percent above June 2016.

In the Midwest, existing-home sales rose 3.1 percent to an annual rate of 1.32 million in June (unchanged from June 2016). The median price in the Midwest was $213,000, up 7.7 percent from a year ago.

Existing-home sales in the South decreased 4.7 percent to an annual rate of 2.23 million (unchanged from a year ago). The median price in the South was $231,300, up 6.2 percent from a year ago.

Existing-home sales in the West declined 0.8 percent to an annual rate of 1.21 million in June, but remain 2.5 percent above a year ago. The median price in the West was $378,100, up 7.4 percent from June 2016.