Today’s housing market data is pointing a slowdown in construction, much less vigor in the upward motion for home sale prices and declining quarterly profits for independent mortgage banks. New statistics from the U.S. Census Bureau and the Department of Housing and Urban Development found single-family housing starts in February were at a rate of 805,000, a 17 percent plummet from the revised January figure of 970,000. Privately-owned housing starts in February were at a seasonally-adjusted annual rate of 1,162,000, down 8.7 percent from the revised January estimate of 1,273,000 and down 9.9 percent from the February 2018 rate of 1,290,000. Single-family authorizations in February were at a rate of 821,000, unchanged from January. Privately-owned housing units authorized by building permits in February were at a seasonally-adjusted annual rate of 1,296,000, a 1.6 percent drop from the revised January rate of 1,317,000 and two percent below the February 2018 rate of 1,323,000. Single-family housing completions in February were at a rate of 816,000, a 10 percent tumble from the revised January rate of 907,000. However, privately-owned housing completions in February were at a seasonally-adjusted annual rate of 1,303,000, up 4.5 percent from the revised January estimate of 1,247,000 and up 1.1 percent above the February 2018 rate of 1,289,000. “Housing starts falling in February is not what is needed to assure a sustainable housing market recovery. Home prices will rise in 2019 for sure. However, the home price increase could be too strong as homebuilders are insufficiently constructing new homes," said Lawrence Yun, Chief Economist for the National Association of Realtors (NAR) . "The imbalance between demand and supply can once again lead to a case of home price appreciation outpacing income growth for the eighth straight year. That is good for homeowners accumulating wealth but not healthy for the broader market as it limits homeownership opportunity, especially among the millennials and widens intergenerational wealth inequality. More affordable homes need to be built to assure market balance and better access to homeownership." This new data was presented with a caveat that noted data collection and processing was delayed due to the recent partial federal government shutdown. “While response rates were consistent with normal levels, delays in data collection for December and January could make it more difficult to determine exact start and completion dates,” the government agencies noted. “The revised data collection schedule caused the adjustments for anticipated late reported December starts and completions to be less accurate than normal, resulting in larger than normal revisions.” Separately, the latest S&P CoreLogic Case-Shiller Indices data found the lowest annual gains since 2015. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 4.3 percent annual gain in January, down from 4.6 percent in the previous month, while the 10-City Composite annual increase was 3.2 percent, down from 3.7 percent in the previous month, and the 20-City Composite saw a 3.6 percent year-over-year gain, down from 4.1 percent in the previous month. “Housing affordability has worsened over the past two years due to a combination of higher home values and rising interest rates," said Tian Liu, Chief Economist at Genworth Mortgage Insurance . "The second half of last year saw a slowdown in buyer activity. The resulting increase in inventory shifted the market in favor of potential buyers. While interest rates have come down since December 2018, many potential homebuyers continued their wait-and-see approach to avoid overpaying. As a result, the inventory level continued to rise in January, making any quick recovery in home price growth unlikely.” Before the seasonal adjustment, the National Index posted a month-over-month decrease of 0.2 percent in January while the 10-City and 20-City Composites reported 0.3 percent and 0.2 percent decreases for the month, respectively. After the seasonal adjustment, the National Index recorded a 0.2 percent month-over-month increase in January while the 10-City Composite was unchanged and the 20-City Composite posted a 0.1 percent month-over-month increase. In January, five of 20 cities reported increases before the seasonal adjustment, while 14 of 20 cities reported increases after the seasonal adjustment. “Home price gains continue to shrink,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “In the year to January, the S&P CoreLogic Case-Shiller National Index rose 4.3 percent, two percentage points slower than its pace in January 2018. The last time it advanced this slowly was April 2015. In 16 of the 20 cities tracked, price gains were smaller in January 2019 than in January 2018. Only Phoenix saw any appreciable acceleration. Some cities where prices surged in 2017-2018 now face much smaller increases: In Seattle, annual price gains dropped from 12.8 percent to 4.1 percent from January 2018 to January 2019. San Francisco saw annual price increases shrink from 10.2 percent to 1.8 percent over the same time period.” Other minimal gains were reported by the Federal Housing Finance Agency (FHFA) , which reported home prices rose in January inched up by 0.6 percent from December 2018 to January 2019. For the nine census divisions, the FHFA determined that the seasonally adjusted monthly house price changes from December 2018 to January 2019 ranged from -0.7 percent in the New England division to +1.1 percent in the East North Central division. The 12-month changes were all positive, ranging from +4.3 percent in the Pacific division to +7.8 percent in the Mountain division. The softening market was also felt by independent mortgage banks and mortgage subsidiaries of chartered banks. The Mortgage Bankers Association (MBA) reported a net loss of $200 on each loan originated by these entities in the fourth quarter of 2018, down from a reported gain of $480 per loan in the third quarter. Average production volume was $440 million per company in the fourth quarter, down from $474 million per company in the third quarter, while the volume by count per company averaged 1,799 loans in the fourth quarter, down from 1,948 loans in the third quarter. The MBA also noted that the average pre-tax production loss reached 11 basis points (bps) in the fourth quarter, down from an average net production profit of 20 bps in the third quarter and down 20 bps from the fourth quarter of 2017—a record low for the report, which has been tracking this market since 2008. This was the third time that production profitability was in the red, with the other negative movement recorded in the first quarter of 2014 and the first quarter of 2018. The purchase share of total originations, by dollar volume, decreased to 79 percent in the fourth quarter of 2018, from a study-high of 82 percent in the third quarter, and the average loan balance for first mortgages was $253,689 in the fourth quarter, down from $255,539 in the third quarter. “Independent mortgage bankers continued to struggle in this very competitive mortgage market environment, with the average pre-tax net production income per loan reaching its lowest level since the inception of our report in 2008,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “Among the headwinds for mortgage bankers were lower volume, lower revenues and higher costs relative to the previous quarter. On the servicing side of the business, mortgage servicing right impairments resulting from December’s drop in interest rates hurt profitability. Including all business lines (both production and servicing), only 44 percent of the firms in the study posted a pre-tax net financial profit in the fourth quarter.”<doc-sep>ORLANDO, Fla., March 22, 2019 /PRNewswire/ -- Florida's housing market reported higher median prices and increased inventory (active listings) in February compared to a year ago, according to the latest housing data released by Florida Realtors®. Sales of single-family homes statewide totaled 18,966 last month, up 1.9 percent compared to February 2018. "Homebuyers in Florida have grown accustomed to dealing with a shortage of for-sale inventory, especially when it comes to first-time buyers trying to enter the market," said 2019 Florida Realtors President Eric Sain, a Realtor and district sales manager with Illustrated Properties in Palm Beach. "A slower pace of sales and increased inventory will enable potential buyers to find more housing opportunities and could help ease affordability constraints in some areas. "Statewide, inventory or active listings in February for existing single-family homes increased 11.8 percent year-over-year, while inventory for condo-townhouse properties rose 8.5 percent. To better understand changing market conditions in their areas, buyers and sellers should consult a local Realtor." In February, statewide median sales prices for both single-family homes and condo-townhouse properties increased year-over-year for the 86th consecutive month. The statewide median sales price for single-family existing homes was $250,000, up 1.3 percent from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month's statewide median price for condo-townhouse units was $187,500, up 4.7 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less. According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in January 2019 was $249,400, up 3.1 percent from the previous year; the national median existing condo price was $233,000. In California, the statewide median sales price for single-family existing homes in January was $538,690; in Massachusetts, it was $379,900; in New York, it was $278,000; and in Maryland, it was $275,000. Looking at Florida's condo-townhouse market in February, statewide closed sales totaled 7,981, down 5.7 percent compared to a year ago. Closed sales may occur from 30- to 90-plus days after sales contracts are written. According to Florida Realtors Chief Economist Dr. Brad O'Connor, one statistic to note in the February data is the median time to contract for closed sales. "Half of the single-family homes selling in February were on the market for at least 54 days before going under contract – this compared to a median of 48 days last year," he said. "In the condo and townhouse category, there's a similar trend: The median time to contract was 58 days, up from 51 days last year. At a more local level, this median varies widely from market to market, but the upward trend is prevalent throughout the state. Competition between buyers is clearly not as fierce as it was even a year ago. However, that doesn't mean we're quite in buyer's market territory yet. Home sale activity in January and February is usually lighter than other months and not always representative of what's to come." O'Connor added, "Based on what we learned from the Federal Reserve earlier this week, we're now fairly confident we won't see any interest rate hikes for a while, which is good news for both buyers and sellers." According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.37 percent in February 2019, compared to the 4.33 percent averaged during the same month a year earlier. To see the full statewide housing activity reports, go to Florida Realtors Media Center at http://media.floridarealtors.org/ and look under Latest Releases, or download the February 2019 data report PDFs under Market Data at: http://media.floridarealtors.org/market-data. Florida Realtors® serves as the voice for real estate in Florida. It provides programs, services, continuing education, research and legislative representation to its 187,000 members in 52 boards/associations. Florida Realtors® Media Center website is available at http://media.floridarealtors.org. SOURCE Florida Realtors Related Links https://media.floridarealtors.org<doc-sep>U.S. homebuilding fell more than expected in February as construction of single-family homes dropped to more than a 1-1/2-year low, but the outlook for the housing market is improving amid declining mortgage rates. Housing starts decreased 8.7 percent to a seasonally adjusted annual rate of 1.162 million units last month, the Commerce Department said on Tuesday. The percent decline was the largest in eight months, and bad weather could have contributed to the sharp drop in homebuilding last month. Data for January and December were revised higher. Building permits fell 1.6 percent to a rate of 1.296 million units in February. While that was the second straight monthly drop in permits, they are now outpacing starts, which suggests a pickup in homebuilding in the months ahead. Economists polled by Reuters had forecast housing starts falling to a pace of 1.213 million units in February. The housing market hit a soft patch last year, squeezed by higher mortgage rates, pricey lumber, and land and labor shortages, which led to tight inventories and more expensive homes. But borrowing costs have eased as the Federal Reserve signaled it was halting further interest rates increases this year amid growing headwinds to the economy.<doc-sep>
Following lackluster sales in December and January, existing-home sales rebounded in February, rising 11.8% month-over month, according to the National Association of Realtors (NAR). However, existing-home sales were down 1.8% compared with February 2018. Regionally, existing-home sales jumped 16.0% in the West, 14.9% in the South, and 9.5% in the Midwest, month-over-month. Sales were flat in the Northeast. Housing market experts have been forecasting a strong spring home buying season and the increase in February indicates that the market is already picking up steam. Not only have mortgage rates recently fallen to new lows for the year – and are expected to remain stable – there is pent-up demand from the slowdown that came in December and January. This slowdown was due mainly to market volatility which, in turn, caused homeowners to take a more pessimistic view of the housing market. In addition to this rebound effect, the U.S. economy and in particular the job market continues to improve. Provided that wages continue to increase as they have, consumers will continue to have increased home purchasing power. What’s more, home prices appear to be stabilizing, thus improving affordability for first-time home buyers. Lack of inventory, however, remains a concern. Although inventory appears to be increasing in certain markets, there is a question as to how much new inventory home builders will bring online this season. Existing-home sales in February reached a seasonally adjusted annual rate of 5.51 million, according to NAR’s estimates – not quite as high as the 5.61 million that came in February 2018. “A powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound,” says Lawrence Yun, chief economist for NAR, in a statement. The median existing-home price for all housing types (including condos and co-ops) in February was $249,500, up 3.6% from about $240,800 in February 2018. February marked the 84th straight month of year-over-year price gains. As of the end of February, there were 1.63 million existing-homes for sale, up from 1.59 million in January and up from 1.58 million in February 2018. That’s an increase of 3.2%, year-over-year, and a 3.5-month supply at the current sales pace. “It is very welcoming to see more inventory showing up in the market,” Yun says. “Consumer foot traffic consequently is rising as measured by the opening rate of SentriLock key boxes.” Properties remained on the market for an average of 44 days in February, down from 49 days in January but up from 37 days a year ago. Forty-one percent of homes sold in February were on the market for less than a month. “For sustained growth, significant construction of moderately priced-homes is still needed,” Yun says. “More construction will help boost local economies and more home sales will help lessen wealth inequality as more households can enjoy in housing wealth gains.” First-time buyers represented 32% of sales in February; all-cash sales accounted for 23%. Distressed sales represented 4% of sales.