Category: Residential

U.S. housing shortage will be around for ‘years to come,’ says Taylor Morrison CEO

The housing shortage that began before the pandemic will stick around for a long time as market demand soars, Taylor Morrison CEO Sheryl Palmer told CNBC on Wednesday.

The housing shortage that began before the pandemic will stick around for a long time as market demand soars, the chief executive of homebuilder Taylor Morrison told CNBC on Wednesday.

“As the economy continues to improve, we’re going to see mortgage rates move up, and I think that should be expected. They’re not going to stay under 3% forever,” CEO Sheryl Palmer said on “Closing Bell.” However, she added, “the lack of supply and the overwhelming demand is something that will be with us for years to come.”

Earlier Wednesday, the Mortgage Bankers Association’s seasonally adjusted index showed that mortgage demand decreased for the second week in a row this week, dropping by 1.8% to their lowest level since the beginning of 2020. Home purchase applications and mortgage applications to refinance a home both dropped for the week, even though mortgage rates dipped.

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    BLACK KNIGHT’S APRIL 2021 MORTGAGE MONITOR

    Persistent Constraints in For-Sale Inventory Drive Home Prices Up a Record-Breaking 14.8% Annually in April, Making Housing Least Affordable Since Late 2018

    • According to the Black Knight HPI, April saw the highest annual home price growth rate on record since Black Knight began tracking the metric in the mid-1990s
    • We’ve now seen 17 consecutive months of home price increases, with the growth rate accelerating sharply in recent months as inventory challenges continue to put upward pressure on prices
    • The number of active for-sale listings were down 53% in April from the same time last year and 60% off the 2017-2019 average for April, for a deficit of nearly 750,000 available homes for sale
    • Black Knight’s Collateral Analytics found just two months’ worth of single-family inventory nationwide in March, the lowest supply on record and trending downward
    • It now takes 20.5% of the median income to make monthly payments on the median-priced home, which roughly has been the tipping point between accelerating and decelerating home price growth in recent years
    • Though still more affordable than the 25-year average (23.6%), housing has surpassed its 5-year average (20.1%) even with interest rates back below 3% and within ~25 basis points of all-time lows
    • Based on today’s income and home price levels, 30-year rates rising to 3.5% would push the payment-to-income ratio to 21.9%; 4% would take it to 23.2%; 4.5% would drive it to 24.7%

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      Investor Home Purchases Rise for First Time in a Year as U.S. Economy Bounces Back

      Institutions are wading back into the U.S. homebuying market after pressing pause at the start of the pandemic

      U.S. home purchases by investors rose 2.7% year over year in the first quarter, marking the first period of growth since the coronavirus pandemic began. That follows three consecutive quarters of declines, during which investor purchases slumped by as much as 45.5%.

      We define an investor as any institution or business that purchases residential real estate. Scroll to the bottom of this report to read more about our methodology.

      Investors bought about 1 of every 7 U.S. homes (14.9%) in the first quarter—a rebound from the prior three quarters, during which they bought closer to 1 in 10 homes. Investor market share is now just shy of the 16.1% level it hit in the first quarter of 2020, when the pandemic had barely begun.

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        What the Biden tax plans mean for the housing market

        The American Jobs Plan and the American Families Plan impact on the 2017 Tax Cuts and Jobs Act

        “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.” — Benjamin Franklin, in a letter to Jean-Baptiste Le Roy, 1789.

        Thankfully, after more than a year with innumerable challenges, it appears that the pandemic will end. From an economic perspective, the government acted boldly to support households and businesses through the crisis with monetary and fiscal stimulus. Now, just as the recovery has commenced, after a four-year pause we are at the beginnings of another tax debate.

        In this column, my aim is to provide you with some of the context for this debate with respect to the state of the U.S. federal budget, particularly on the revenue side, and of overviews of the 2017 Tax Cuts and Jobs Act (TCJA) and President Biden’s tax plans and the two 2021 proposals: The American Jobs Plan and The American Families Plan.

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          Top 5 Markets for Office Construction Activity

          More than 215 million square feet was under construction across the nation at the end of the first quarter, according to CommercialEdge data.

          More than 25 million square feet of office space came online in the first quarter of 2021, with an additional 215.8 million square feet underway across the entire U.S., according to CommercialEdge data. As of March, development activity in the nation’s tech-driven hubs—Manhattan, Boston and Seattle—accounted for a third of the country’s existing inventory.

          Half of the upcoming projects are expected to come online in 2021. Meanwhile, developers are reaching new milestones on the largest projects underway. Although most developments are scheduled for delivery on time, a slowdown in office construction is expected—a recent American Institute of Architects consensus forecast predicted a 9.3 percent decrease for office construction spending in 2021.

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            Home Equity Continues Growing in U.S. During First Quarter of 2021 as Market Remains Resistant to Pandemic

            IRVINE, Calif. — May 13, 2021 — ATTOM Data Solutions, curator of the nation’s premier property database, today released its first-quarter 2021 U.S. Home Equity & Underwater Report, which shows that 17.8 million residential properties in the United States were considered equity-rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value.

            The count of equity-rich properties in the first quarter of 2021 represented 31.9 percent, or about one in three, of the 55.8 million mortgaged homes in the United States. That was up from 30.2 percent in the fourth quarter of 2020, 28.3 percent in the third quarter and 26.5 percent in the first quarter of 2020 – one of many measures showing how the U.S. housing market continues fending off economic damage caused by the worldwide Coronavirus pandemic.

            The report also shows that just 2.6 million, or one in 21, mortgaged homes in the first quarter of 2021 were considered seriously underwater, with a combined estimated balance of loans secured by the property at least 25 percent more than the property’s estimated market value. That figure represented 4.7 percent of all U.S. properties with a mortgage, down from 5.4 percent in the prior quarter, 6 percent in the third quarter of 2020 and 6.6 percent a year ago.

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              MBA RIHA Study Reveals Progress, but 5 Million Renters and Homeowners Missed December Payments

              CONTACT
              Adam DeSanctis
              [email protected]
              (202) 557-2727

              WASHINGTON, D.C. (February 8, 2021) – Five million households did not make their rent or mortgage payments in December, and 2.3 million renters and 1.2 million mortgagors said they feel they are at risk of eviction or foreclosure, or would be forced to move in the next 30 days. That is according to fourth-quarter 2020 research released today by the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA).

              The new fourth-quarter 2020 findings on housing and student loan payments come from RIHA’s study, Housing-Related Financial Distress During the Pandemic, which was previously released in September 2020 (second-quarter findings) and October 2020 ( third-quarter findings).

              The percentage of homeowners and renters behind on their payments has decreased since last year’s second quarter. In December, 7.9% of renters (2.62 million households) missed, delayed, or made a reduced payment, while 5.0% (2.38 million homeowners) missed their mortgage payment. The proportion of student debt borrowers who missed a monthly payment climbed to approximately 43% of borrowers in December from the steady share of around 40% since May.

              “Gradual improvements in the labor market and economy helped more renters and homeowners make their housing payments at the end of 2020. However, the COVID-19 pandemic continues to cause financial stress for millions of Americans, and particularly for those who rent and have student loan debt,” said Gary V. Engelhardt, Professor of Economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University. “Despite 5 million renters and homeowners not making their December payment, fewer believe they are at risk of eviction, a foreclosure, or would be forced to move in the next 30 days. This confidence is perhaps an indication that direct checks and enhanced unemployment benefits, rental assistance, mortgage forbearance programs, and a federal eviction moratorium have so far been effective in keeping people in their homes.”

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                BLACK KNIGHT’S DECEMBER 2020 MORTGAGE MONITOR

                24% of Active Forbearance Plans Scheduled to End in March, When More than 600,000 Homeowners Face 12-Month Expirations

                JACKSONVILLE, Fla. – Feb. 1, 2021 – Today, the Data & Analytics division of Black Knight, Inc. (NYSE:BKI) released its latest Mortgage Monitor Report, based upon the company’s industry-leading mortgage, real estate and public records datasets. As the final, 12-month expiration point for many forbearance plans quickly approaches, this month’s report looks at how the slowdown in improvement in recent months may present new challenges to recovery for seriously delinquent homeowners. According to Black Knight Data & Analytics President Ben Graboske, the end of March 2021 is shaping up to be an inflection point for the industry.

                “For the roughly 6.7 million Americans who have been in COVID-19 related mortgage forbearance at some point since the onset of the pandemic, the programs have represented an essential lifeline,” said Graboske. “The vast majority of plans have a 12-month cap on payment forbearance, though. And the various moratoriums which have kept foreclosure actions at bay over the past 10 months may be lulling us into a false sense of security about the scope of the post-forbearance problem we will need to confront come the end of March. Last year saw the largest number of homeowners – nearly 3.6 million – become 90 or more days past due since 2009, and as of the end of December, 2.1 million remained so.

                “When nearly a quarter of all forbearance plans come to an end on March 31, at the current rate of improvement there would still be approximately 1.5 million more such serious delinquencies than before the pandemic. With that rate of improvement slowing in recent weeks, current trends suggest more than 2.5 million homeowners would still in forbearance at that point. While early in the pandemic roughly half of homeowners in forbearance continued to make their monthly mortgage payments, that number has steadily declined. Today, it’s about 12%, which suggests the people who are taking the full forbearance period afforded to them may well be experiencing prolonged financial distress, and face extended challenges as they return to making payments.”

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                  BLACK KNIGHT’S FIRST LOOK AT DECEMBER 2020 MORTGAGE DATA

                  2020 Ends With 1.7 Million More Seriously Delinquent Homeowners Than at Start of Year; Foreclosures at Record Low

                  • The year ended with 1.54 million more delinquent and 1.7 million more seriously delinquent mortgages than at the start of 2020, a looming reminder of the challenges facing the market in 2021
                  • Despite the year-over-year increase, the national delinquency rate saw modest improvement in December, falling by 3.9% from November to 6.08%, the lowest level since April 2020
                  • Serious delinquencies (loans 90 or more days past due) also improved, falling to 2.15 million from 2.19 million the month prior
                  • Even after months of improvement, 90-day default activity rose by more than 250% (+2.6 million) overall in 2020
                  • Foreclosure starts fell by 67% from the year prior and the year’s 40,000 foreclosure sales (completions) represented an annual decline of more than 70%
                  • Starts and sales have hit record lows as moratoriums and forbearance plans protect distressed homeowners from facing foreclosure in the wake of the pandemic
                  • Prepayment activity rose by 12% in December, ending the year 112% higher than the same month in 2019 and highlighting a still-strong refinance market entering 2021

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                    Nearly 20% of renters in America are behind on their payments

                    The typical delinquent renter now owes $5,600, being nearly four months behind on their monthly payment, according to a new analysis. This also includes utilities and late fees.

                    About 18% renters in America, or around 10 million people, were behind in their rent payments as of the beginning of the month.

                    It is far more than the approximately 7 million homeowners who lost their properties to foreclosure during the subprime mortgage crisis and the ensuing Great Recession. And that happened over a five-year period.

                    In one of his first executive orders, President Joe Biden extended the Centers for Disease Control and Prevention’s current eviction moratorium through the end of March, but that is unlikely to be long enough.

                    A new analysis from Mark Zandi, chief economist at Moody’s Analytics, and Jim Parrott, a fellow at the Urban Institute, shows the typical delinquent renter now owes $5,600, being nearly four months behind on their monthly payment. This also includes utilities and late fees. In total, an astounding $57.3 billion is owed. This includes all delinquent renters, not just those suffering financially due to the Covid pandemic.

                    “Compared to renters that are making their rent payments on time, currently delinquent renters are more likely to be lower income, less educated, black and with children,” noted the authors of the analysis.

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