Increases potential for home sales in May

Increases potential for home sales in May

The market’s potential for existing home sales increased in May, even as the number of sales continued to underperform, according to the Potential Home Sales model for First American Financial Corp., a provider of title insurance, settlement services and risk solutions for real estate transactions.

Potential existing home sales increased to a seasonally adjusted annualized rate of 5.72 million, an increase of 1.8% from the previous month. This represents a 90.3% increase from the market potential low point in December 2008.

“As more and more Millennials marry and have children, among the strongest determinants for the desire to be a homeowner, demand for housing will remain robust,” First American Chief Economist Mark Fleming said. “However, the housing market faces a dilemma that is restricting the inventory of homes for sale.”

“As rates rise and the cost to finance a mortgage increases, existing homeowners are prisoners in their own homes,” Fleming said. “In addition, the fear of being unable to find a home to purchase hinders homeowners’ decision to sell.”

The market potential for existing-home sales fell by 1.1% from last year, a drop of 62,000 sales. The current

Preparing to spurn Starwood Capital after D.R. Horton improves its offer

Preparing to spurn Starwood Capital after D.R. Horton improves its offer

Thanks to a bidding war between two real estate giants, Forestar Group, a residential and mixed-use real estate developer, and its shareholders find themselves squarely in the catbird’s seat.

As recently as one day ago, Forestar said that it still planned to sell itself to Starwood Capital Group for $15.50 per share (or approximately $658 million), despite D.R. Horton attempting to swoop in and buy 75% of the company for a higher price, $16.25 per share (or approximately $520 million).

That came after Starwood increased its initial offer for Forestar from $14.25 per share to $15.50 per share as it tried to fend off D.R. Horton’s unsolicited bid for control of the company.

But things can change quite a bit in 24 hours.

On Thursday, Forestar announced publicly that its board was considering both companies’ offers, and may determine that D.R. Horton’s bid is superior.

Now, it appears that Forestar’s public negotiation proved successful, as the company announced Friday morning that both companies increased their offers for the company, with D.R. Horton increasing its bid enough that Forestar now plans to spurn Starwood’s offer and sell to D.R. Horton.

According

Mortgage originator accused of bilking elderly homeowners

Mortgage originator accused of bilking elderly homeowners

A mortgage originator from Chicago stands accused of running a reverse mortgage scam and defrauding elderly homeowners and lenders out of $7 million.

According to the U.S. Attorney’s Office for the Northern District of Illinois, Mark Steven Diamond is a mortgage loan originator with offices in Chicago and Calumet City, Illinois.

Diamond is currently facing seven counts of wire fraud after being accused of fraudulently causing lenders to make reverse mortgage loans to homeowners who either did not sign up for the loans or did so after Diamond allegedly misrepresented the terms of the loans.

The indictment alleges that Diamond fraudulently kept the loan funds for himself after convincing title companies to give the checks to him instead of the homeowners.

According to the indictment, Diamond targeted his victims, who ranged from ages 62 to 97, based on how much equity they had in their homes and whether they were financially sophisticated or not.

Additionally, the indictment states that if one of the relatives of Diamond’s alleged victims questioned whether a reverse mortgage was a good idea, Diamond would visit the victim’s home at a time when he knew

The Canadian lumber tariffs add to the current housing shortage

The Canadian lumber tariffs add to the current housing shortage

The looming Canadian lumber tariffs do little to solve the actual lumber problem in America, mostly putting homebuilders and homebuyers at a greater loss, the National Associations of Home Builders explained after U.S. Secretary of Commerce Wilbur Ross announced another tariff this week.

To NAHB, the potential 30% jump in Canadian softwood lumber would jeopardize affordable housing in America. Softwood lumber is made from trees that have cones, such as spruce, pine and fir. It’s primarily used in home construction, and the U.S. is also Canada’s biggest export market.

In a follow-up interview with HousingWire, the association explained, “NAHB and its members depend on a steady, affordable supply of quality lumber to build homes.” The best way to accomplish this is a speedy and sustainable softwood lumber agreement, which to NAHB, the new tariffs don’t do.

“Absent that and as another means to address the aforementioned underlying economic problem of US demand regularly outstripping domestic supply, NAHB is advocating on Capitol Hill for policies that would increase our domestic harvest of timber thereby reducing our reliance on foreign sources of timber,” NAHB stated.

The association explained that the major problem with the Department of Commerce (DOC) solution is that it’s based on a faulty

New home demand reaches 10-year high

New home demand reaches 10-year high

The most recent data on housing starts and new home sales painted a decidedly gloomy picture about the state of the nation’s housing economy.

The latest report from the Department of Housing and Urban Development and the U.S. Census Bureau showed that housing starts sank to an eight-month low in May, and the most recent data from those same agencies showed that new home sales fell by 11.4% in April.

And while some observers are suggesting that the lack of housing supply is nearing “emergency” status, one prominent homebuilder is seeing just the opposite.

Lennar Corporation said Tuesday that it saw double-digit increases in revenue from home sales, deliveries of new homes, and orders for new homes in the second quarter.

In fact, Lennar said that the demand for new homes just hit a 10-year high, as the second quarter saw the homebuilder receive more new home orders in any quarter in the last 10 years.

Lennar shared the stats as part of the release of its second quarter financial results.

“The overall market improvement was supported by our highest quarterly new orders in the last ten years of 8,898 homes, a 12% increase year over year,” Lennar CEO Stuart Miller said on Tuesday. “Home deliveries and revenues from home sales increased

Homeownership rates dropped in past decade

Homeownership rates dropped in past decade

Homeownership rates are resting near their 50-year lows, and homeownership among young adults experienced large declines over the past decade.

The homeownership rate of young adults aged 25 to 44, the prime ages for first-time home buying, plummeted by 10 percentage points in the past decade, according to a new studyfrom Fannie Mae and the University of Southern California.

The study pointed out some of the causes for the low homeownership rate among Millennials. Those factors include the foreclosure crisis, a slow labor market recovery from the Great Recession, tighter mortgage credit, limited supply of entry-level homes and long-term social changes such as delayed marriage and childbearing.

Due to the many contributing factors, policy makers and housing professionals struggle to define the role of housing policy in shaping future homeownership rates, according to Fannie Mae.

The University of Southern California simulated how future changes in the characteristics of young adults might affect changes in their homeownership rate. The simulations place special emphasis on how increases in racial and ethnic diversity and alternative scenarios for future college education might alter the trajectory of young-adult homeownership.

The study found that, contrary to the popular narrative, an increase in racial and ethnic diversity will not lead to a

Avocado toast with every new mortgage

Avocado toast with every new mortgage

In case you missed it, SoFi announced recently that it is now offering a one-month supply of avocado toast with each new mortgage in the month of July.

I must admit; it’s a pretty funny gimmick and really smart marketing.

Here’s why.

About a month or so ago, “the internet” (and I use the sarcastic air quotes here) was all hot and bothered after an Australian millionaire suggested that Millennials would be able to afford a home if they could just give up their daily dose of avocado toast.

“When I was trying to buy my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each,” 35-year-old real estate developer Timothy Gurner told Australia’s 60 Minutes.

“We’re at a point now where the expectations of younger people are very, very high. They want to eat out every day; they want travel to Europe every year,” Gurner continued. “The people that own homes today worked very, very hard for it,” he said, adding that they “saved every dollar, did everything they could to get up the property investment ladder.”

And as these types of things are wont to do, Gurner’s proclamation went viral.

Twitter lit up with joke after joke about how many avocado

Reduce senior injuries at home

Reduce senior injuries at home

About one-third of adults ages 65 and older fall in their home which results in injury, long-term disability and premature institutionalization, according to the U.S. Department of Housing and Urban Development.

By 2020, the Centers for Disease Control and Prevention estimates that the cost for these kinds of injures will total nearly $60 billion. In order to reduce these costs, HUD released a report recommending a more holistic approach to seniors aging in place and their health needs.

HUD released its report, Overcoming Obstacles to Policies for Preventing Falls by the Elderly, during National Healthy Homes month, which recommends government and philanthropic organizations work together at every level to integrate fall prevention strategies and support efforts to aging-in-place.

“Active programs that coordinate senior care and implement fall prevention strategies can benefit seniors enormously,” said Jon Gant, director of the Office of Lead Hazard Control and Healthy Homes. “This report helps policymakers and program managers to identify the causes of problems they may encounter, as well as the resources and methods they can use to overcome them.”

HUD’s report also highlights these four key areas to improve services and care to seniors:

  • Why senior falls prevention and coordinated care is an important issue for the nation

House Canary as executive vice president of analytics

House Canary as executive vice president of analytics

Modern data analytics company and 2017 HW Tech100 winner HouseCanary has brought on Alex Villacorta as executive vice president of analytics.

Villacorta, who holds a Ph.D in statistics and applied probability, comes to HouseCanary from Clear Capital, where he created and led the research and housing analytics team. At HouseCanary, he will be joining its predictive analytics team.

“Having gotten to know the HouseCanary team over the last three years, it’s been exciting to watch their growth and vision for redefining real estate data and analytics and transforming the industry,” said Villacorta.

During the last 15 years, Villacorta, who is a 2014 HW Rising Star, has developed and led teams in advanced statistics applied to housing, media, and educational data streams.

“Alex’s energy, vision, and knowledge are a perfect complement to HouseCanary’s dynamic group,” explained Jeremy Sicklick, CEO and co-founder of HouseCanary. “His addition rounds out a team ready to turn residential real estate on its head.”

“The residential market is critically important to everyday homeowners and to the national economy, and HouseCanary’s genuine passion to make valuation and risk assessment consistent and reliable for all market players has been inspiring — I’m beyond excited to be joining a group of true innovators,” Villacorta added.

 

Real Estate Appraisal Board fights back against FTC price

Real Estate Appraisal Board fights back against FTC price

Last month, the Federal Trade Commission filed a complaint against the Louisiana Real Estate Appraisal Board, accusing the regulatory body that oversees property appraisals in the state of stifling price competition by requiring appraisal management companies to follow the state’s established polices for the fees that AMCs pay to appraisers.

At the time, the Louisiana Real Estate Appraisers Board denied the FTC’s allegations, stating that any accusations that it operates beyond its rights are “ludicrous” and without merit.

“To now suggest that LREAB’s good faith efforts to comply with federal law is some sort of shadowy price-fixing conspiracy is ludicrous. Congress and six financial regulatory agencies in Washington have directed Louisiana to do exactly what the FTC is now alleging is an antitrust violation,” Bruce Unangst, executive director of the Louisiana Real Estate Appraisers Board, said in a statement at the time.

Unangst also said that the board planned to fight the FTC, and that’s exactly what the board is doing.

Earlier this week, the Louisiana Real Estate Appraisers Board filed a response to the FTC’s allegations, in which the group repeatedly denies the FTC’s numerous allegations.

“The LREAB categorically and vociferously denies these allegations as factually false and politically wrong-headed,” the board said in its

Rental occupancy rates flatten

Rental occupancy rates flatten

Americans are shifting their preferences from renting to home buying, an analysis by TransUnion for the first quarter of 2017 showed.

The study showed 55% of those who shopped for a mortgage in the first quarter of 2017 were non-homeowners, most of whom were renters. This is a significant increase from the first quarter of 2016 when that number was 50% and from the first quarter of 2016 when it sat at 45%.

“The rental market has seen sustained growth for the last several years, but occupancy rates have flattened from their peak in the second quarter of 2016,” said Mike Doherty, senior vice president of TransUnion’s rental screening solutions group.

“This new uptick in mortgage shopping could be a precursor to further declines in occupancy, which would impact rent growth, and ultimately, revenue, for multifamily property owners,” Doherty said. “In anticipation of this potential shift, owners and property managers should be offering the right amenities and programs designed to attract renters.”

Millennial interest in homeownership has been steadily growing, the TransUnion study showed. In 2017, 29% of non-homeowners who shopped for mortgages were Millennials. This is up slightly from 28% in 2016 and 27% in 2015.

“Property management companies should consider new services such as rental payment

Median home price hits new high

Median home price hits new high

Existing home sales rebounded in May as low inventory levels pushed median home prices to a new high, according to the latest report from the National Association of Realtors.

And as competition increased, the median days a home is on a market sank to a new low, the report showed.

Total existing home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1.1% to a seasonally adjusted annual rate of 5.62 million in May. This is down from a downwardly revised 5.56 million in April.

This sales pace is an increase of 2.7% from last year, and the third highest pace over the past year, the report showed.

“The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level,” NAR Chief Economist Lawrence Yun said. “Those able to close on a home last month are probably feeling both happy and relieved.”

“Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher,” Yun said.

The median existing home price for all housing types increased to $252,800

Forestar as battle with D.R. Horton intensifies

Forestar as battle with D.R. Horton intensifies

There’s a battle brewing between two real estate titans as Starwood Capital Group and D.R. Horton are both angling to acquire Forestar Group, a residential and mixed-use real estate developer.

Last month, Forestar and Starwood announced that the companies reached a merger agreement, which would see Starwood acquire all of Forestar’s outstanding shares for $14.25 per share in cash.

The total purchase price would be approximately $605 million.

But, D.R. Horton attempted to swoop in with a superior offer. After the details of the Forestar-Starwood merger were announced, the homebuilder announced that it was submitting a proposal to acquire 75% of Forestar’s outstanding shares.

The difference? D.R. Horton was offering $16.25 per share, two dollars more per share than Starwood was offering.

“We believe that D.R. Horton is uniquely positioned to make Forestar the country’s leading residential land development company,” Donald Horton, D.R. Horton’s chairman of the board, said at the time. “Together, we can grow Forestar into a much more significant and valuable company for all of its stockholders.”

D.R. Horton’s offer would total somewhere in the neighborhood of $520 million.

At the time, Forestar acknowledged that it received D.R. Horton’s proposal, but said that its board continued to recommend that Forestar’s stockholders vote to accept

Desperate to get a home

Desperate to get a home

Existing home sales increased in May, a sign some experts say shows the strength of homebuyer demand.

One expert explained that buying conditions in many markets have put sellers in complete control and buyers are forced to contend with rising competition.

“The fact that sales of existing homes rose in May, despite incredibly limited selection, shrinking times on market and rapidly rising prices, is a testament to just how strong the draw to homeownership is right now for millions of Americans,” Zillow Chief Economist Svenja Gudell said. “It’s no exaggeration to say that current buying conditions in many markets are terrible, with sellers in complete control and buyers forced to contend with cutthroat competition and intense pressure to make a deal.”

“Still, despite these notable challenges, buyers are finding ways to make things work and continue to come out in droves,” Gudell said. “As long as the economy continues to chug along as it has, I see no reason for this widespread demand to fall off, nor for the pendulum to meaningfully swing back in favor of buyers, any time soon.”

Other experts agree the rate of housing inventory is holding back home sales. As the demand for housing grows each month, inventory becomes even

Best and worst at paying their mortgage

Best and worst at paying their mortgage

Delinquencies and foreclosure rates dropped in May, partially reversing the sudden increase in April, according to Black Knight Financial Services’ First Look report.

After rising 13% in April, the largest monthly increase since November 2008, delinquencies saw a partial reversal in May with a drop of 7%.

The inventory of loans that are either seriously delinquent, 90 days or more past due or in active foreclosure continued to improve, hitting a 10-year low in May. The number of loans in foreclosure hit 421,000 in May, a drop of 12,000 loans from April and 153,000 loans from last year.

However, foreclosure starts increased slightly by 55,800 loans, up 5.7% from April. However, this is the second-lowest number of monthly starts since 2005.

Here are the five states with the lowest percentage of non-current loans, the combined foreclosures and delinquencies as a percentage of active loans in the state:

  • Colorado: 2.12%
  • North Dakota: 2.26%
  • Minnesota: 2.51%
  • Idaho: 2.69%
  • Oregon: 2.7%

And here are the states where homeowners struggle the most to keep up with their mortgage payment and hold the highest non-current percentage:

  • Maine: 6.6%
  • West Virginia: 6.83%
  • Alabama: 7.13%
  • Louisiana: 8.68%
  • Mississippi: 10.16%

In a separate announcement, D.R. Horton said Thursday that it still believes its offer is superior and suggests that a partnership with Forestar will allow Forestar to grow into a “leading publicly traded national land

Refinance demand drives uptick in mortgage applications

Refinance demand drives uptick in mortgage applications

Mortgage applications continued to rise (albeit slightly) in the last week, with refinance applications driving the increase again, according to the latest data from the Mortgage Bankers Association.

According to the data from the MBA’s Weekly Mortgage Applications Survey for the week ending June 16, mortgage applications increased 0.6% from one week earlier.

Last week’s report showed that mortgage applications increased 2.8% from the week earlier, which included an adjustment for the Memorial Day holiday. That followed the previous week’s increase of 7.1% from the week before that.

As with last week’s report, the increase came from refinances.

Overall, the Market Composite Index, a measure of mortgage loan application volume, increased 0.6% on a seasonally adjusted basis from one week ago.

The Refinance Index rose 2% from the previous week to its highest level since November 2016, while the seasonally adjusted Purchase Index decreased 1% from one week earlier.

Additionally, the MBA report showed that the refinance share of mortgage activity increased from 45.4% of total applications last week to 46.6% this week. The adjustable-rate mortgage share of activity increased to 7.5% of total applications from 7.4% last week.

The report also showed that the Federal Housing Administration’s share of total applications fell to 10.1% from 11.2% last week, while

The government currently stands on affordable housing

The government currently stands on affordable housing

Amidst the partisan rancor in Washington, there is one issue that should unite both political parties: the urgent need to expand access to affordable rental housing.

The situation is dire. According to new research by Harvard’s Joint Center for Housing Studies, more than 11 million households in communities across America now spend in excess of 50% of their income just on rent. That’s an unsustainable proposition for millions of low-income families who are often forced to choose between paying the rent and purchasing groceries or critical medical care. Many are just one missed rent payment away from eviction and homelessness.

What’s the cause of today’s high rent burdens? Over the past decade, we have witnessed an unprecedented increase in demand for rental housing that has sent rents soaring. Unfortunately, household incomes have not kept pace. Exacerbating the situation is the severe shortage of rental homes that are affordable and available to the lowest-income families. This shortfall now stands at 7.4 million units, affecting every state and metropolitan area

Millions of low-income families rely on federal rental assistance, but these programs help just one out of every four eligible households. In many communities, housing vouchers are allocated through long waiting lists or by lottery.

For

HomeActions buys the Gooder Group

HomeActions buys the Gooder Group

HomeActions, a lead-generation and client relationship platform for real estate professionals, announced this week that it acquired the Gooder Group, a publisher of digital and print lead-generating marketing tools for real estate and mortgage professionals.

Specifically, HomeActions said that it acquired “all of the assets” of the Gooder Group.

According to HomeActions, the deal will “significantly” expand its offerings to include e-marketing services and print services.

In a release, the company said that one of the key features of the deal is that HomeActions will now be able to offer its base of 5,000 clients a “complete program of digital and print products from one source that will enhance lead-generation and ‘stay in touch’ efforts.”

According to the companies, current Gooder Group clients that use the company’s e-newsletter service will soon be able to use the “advanced” HomeActions e-newsletter platform.

The companies said that all Gooder Group employees are expected to transition over to the HomeActions team immediately.

“We see this as an online and offline strategic move,” said Barry Friedman, the co-founder and CEO of HomeActions. “Our ability to offer a quality print platform for newsletters, brochures and more demonstrates our commitment to becoming a one-stop shop for all our clients’ needs.”

Financial terms of the

New sales up annually but still remain historically low

New sales up annually but still remain historically low

In April, home prices dropped, followed by an increase in home prices in May, according to a joint release from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. One expert explained the volatility in certain areas of the U.S. are to blame for the shifting home sales market.

“Much of the movement in new home sales the past two months can be traced to volatility in reported sales in the Midwest and West,” Nationwide senior economist Ben Ayers said. “Whereas sales in the West rebounded sharply in May, Midwest new home sales slipped again to a multi-year low.”

Demand reaches highest point ever

Demand reaches highest point ever

It seems nothing can stop housing demand, which just hit a new high, according to Redfin, an online real estate brokerage.

The company’s Housing Demand Index increased 11.3% in May to a new record high. The index now stands at a seasonally adjusted level of 136, the highest level of homebuyer demand since Redfin began tracking in January 2013.

The Demand Index is based on thousands of Redfin customers requesting home tours and writing offers. A level of 100 represents the historical average for the three-year period from January 2013 to December 2015.

A recent report from Trulia showed falling inventory is forcing homebuyers to move at the fastest pace ever. Competition is so fierce, in fact, that Redfin reports 33% of Americans, and 41% of Millennials, are buying homes before seeing them in person.

“Housing shortages look to intensify and may well turn into a housing emergency if the discrepancy between housing demand and housing supply widens further,” Lawrence Yun, National Association of Realtors chief economist, said in response to housing starts sinking to an eight-month low.

And because of this increasing competition, many experts say a slowdown in rising home prices is nowhere on the horizon.

And yet, despite these complications, the demand for housing continues to