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Homebuilder Confidence Plunges, Golden Opening for Manufactured Housing

May 17th, 2017 Comments off
HomebuilderConfidencePlungesPotentialBoomforManufacturedHousingcreditsForgingMagazineRetireNet-postedtothedailybusinessnewsmhpronewsmhlivingnews

Is a “bust” in retirement funds a potential “boom” for manufactured housing? Credits: Forging Magazine, RetireNet.

Recently released data from the National Association of Home Builders (NAHB), shows that the 55+ Housing Market Indexes (HMI) for single family homes posted significant declines in all three components in the first quarter of this year.

According to Consumer Affairs, the HMI’s for present sales dropped 12 points to 62, expected sales for the next six months was down seven points to 68 and traffic of prospective buyers fell 15 points to 34.

We saw an unusually high 55+ single-family HMI in the 4th quarter of 2016 due to a post-election surge in optimism. As this wears off, confidence is returning to a more sustainable level,” said NAHB Chief Economist Robert Dietz.

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Robert Dietz. Credit Twitter.

Although builders are struggling with shortages of labor and lots, as well as higher lumber prices, market conditions on balance remain favorable, and we expect solid growth in the 55+ housing sector.”

 

The Real Cause for Concern – a One-Two Punch?

While Dietz sees solid growth ahead, bigger issues are in play.

According to FOX Business, a GOBBankingRates survey showed that one out of every three Americans has absolutely nothing saved for retirement.

HomebuilderConfidencePlungesPotentialBoomforManufacturedHousingcreditGoBankingRates-postedtothedailybusinessnewsmhpronewsmhlivingnews

Credit: GoBankingRates.

Additionally, the average 50 year old only has about $60,000 saved for retirement, and 47 percent of single seniors are almost completely dependent on Social Security. Twenty-two percent of married couples have the same challenge.

With an average of 10,000 baby boomers turning 65 everyday, and many not having the resources to maintain the lifestyle to which they are accustomed, a crisis looms… including affordable housing.

 

A Manufactured Housing Boom?

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Stan Posey, Sales Manager, Sunshine Homes.

As MHProNews and MHLivingNews continue to make the case for manufactured housing as a viable solution to hope for the American Dream of home ownership, it also represents an opportunity for those headed into retirement to downsize into a quality residence at a reasonable price. And some in the industry see the opportunity clearly.

When the National Association of Realtors chief economist says there are more buyers than existing homes available on the market, that should be a huge signal to manufactured and modular home professionals,” said Stan Posey, sales manager at Sunshine Homes of Red Bay, AL.

We build residential style homes that target the site-built customer,” Posey said.Some of our retailers and communities are doing very well by targeting the site-built customer.”

One of those retailers is Stan Dye of Star Homes.

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Stan Day, Star Homes, Cullman AL at top left. Sunshine Homes model SHI3270-303.

Dye told Inside MH recently that about 70% of their buyers first owned a conventional stick-built house.

The upside opportunity is clearly immense in the residential side of the manufactured home industry,” Posey told MHProNews.

That, combined with our marketing and sales support to independent retailers and communities, are factors why Sunshine Homes is growing significantly faster than the overall growth rate of the industry at large.

For more on manufactured housing as America’s solution to the American Dream, and retirement, click here. ##

(Image credits are as shown above, and when provided by third parties, are shared under fair use guidelines.)

 

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RC Williams, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

 

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Housing Market Confidence Index for 55+ Homes Rises

November 10th, 2015 Comments off

homeownership   fotosearch stock photoBuilder confidence in the single-family 55+ housing market rose for the sixth quarter in a row, according to what the National Association of Homebuilders (NAHB) tells MHProNews, as the 55% + Housing Market Index edged up three points to 60. Any number above 50 indicates confidence is good.

As consumeraffairsreports, all three components of the 55+ single-family index notched increases from the previous quarter: current sales rose three points to 65, anticipated sales for the next six months edged up one point to 67, and the number for prospective buyers moved up three points to 46.

The four indices that track production and demand of 55+ multi-family rentals marked gains in the third quarter: Current production rose nine points to 55, projected future production and present demand for existing units gained sharply 11 points to 60 and 70, respectively, and future demand gained five points to 68.

NAHB Chief Economist David Crowe said: Like the overall housing market, we continue to see steady, positive growth in the 55+ market. With the economy and job growth continuing to improve gradually, many consumers are now able to sell their current homes at a suitable price, enabling them to buy or rent in a 55+ community.

With 10,000 people turning 65 every day in the U. S., the demand for senior housing will surely rise, presenting the opportunity for 55+ manufactured home communities to also develop. ##

(Image credit: fotosearch)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

55+ Housing Market Index Remains Steady

August 12th, 2015 Comments off

baby_boomers____howstuffworksThe National Association of Home Builders (NAHB) reports its 55+ Housing Market Index (HMI) slipped one point to 57 in the second quarter of 2015, but maintains the fifth consecutive quarter with a reading over 50. Any number over 50 indicates builders think conditions are good rather than poor, according to consumeraffairs.

Distinguishing between single-family homes and multi-family condos, the survey is based on current sales, prospective buyer traffic and outlook for six months.

In the single-family HMI sector, present sales fell two points to 62, expected sales for the next six months slipped one point to 66, while prospective buyers rose three points to 43.

In the multifamily 55+ category, present sales increased three points to 44, six months anticipated sales rose sharply 10 points to 49 and traffic of prospective buyers rose eight points to 41.

MHProNews has learned all four indices regarding 55+ multifamily rentals dropped in the second quarter. Present production plummeted 12 points to 46, anticipated future production fell 3 points to 49, current demand for existing units dropped 9 points to 59 and future demand slipped one point to 63.

NAHB Chief Economist David Crowe said, Overall, builders in the 55+ housing sector remain positive about the market,. However, many builders are being cautious as lot availability and skilled labor shortages remain a challenge in some parts of the country.##

(Photo credit: howstuffworks–baby boomers)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

MH Industry Pros Respond to CFPB Report

October 8th, 2014 Comments off

richard_cordray_c-span2__creditWhile the Consumer Financial Protection Bureau’s recent report on financing the purchase of manufactured homes (MH) notes buyers of MH are often poor, elderly, rural and vulnerable to high-cost “chattel” (“home only,” personal property) loans, the bureau wants to ensure consumers have access to “responsible credit.” Their report, comments and the resulting controversies are the subject of a new Industry in Focus report, linked here.

Consumer Affairs reporter Truman Lewis says mortgage lenders generally disregard MH lending because the demand is not great, which leaves the door open to five national MH personal property lenders.

However, smaller regional and local MH lenders exist, but CFPB regulations restrict sales people from referring consumers to them for fear of violating CFPB rules.
Dan Rinzema, president of MHVillage and DataComp says the government regulation is misguided and does not help the market for the resale of manufactured homes, which would help make MH a competitive housing choice. Doug Ryan, Director of Affordable Housing Initiatives at the Corporation for Enterprise Development (CFED), a non-profit that supports affordable MH, echoes CFPB’s claim that borrowers are vulnerable to expensive loan products.

Some Washington insiders say the report stems from the stiff grilling CFPB Director Richard Cordray received Jan. 28, 2014 at the hands of the House Financial Services Committee’s Subcommittee, and point to a video of that hearing.

The 55-page report alleges that 68 percent of all MH purchase loans in 2012 were chattel loans compared to three percent of site-built home loans, and included that two-thirds of MH loans were eligible for traditional mortgages but chose personal property loans instead. Chattel loans are quicker to obtain, says the report, but have lower origination costs. Industry finance expert Dick Ernst, a principal at FinMarkUSA, says while the report notes the absence of a secondary mortgage market for MH, the cost to originate personal property loans is the similar regardless of the amount of the loan.

Meanwhile, the Government Accountability Office (GAO) report, in response to a request from the chairman of the House Financial Services Committee for an analysis of HUD’s implementation of the MHIA of 2000, says HUD has fallen short of encouraging Ginnie Mae to securitize manufactured home loans, which in turn reduces the availability of affordable MH.

The law firm of Bradley Arant Boult Cummings LLC said in a statement the CFPB report indicates the agency is showing interest in the MH industry which may lead to adjustments that could reduce burdens on the lenders and lower costs of credit to borrowers. Robert Williamson, of Hart King Law, says the paper may be a public recognition of the importance of MH to the consumer housing market, and may in turn stimulate a more robust MH market.

The Manufactured Housing Association for Regulatory Reform (MHARR) notes the report may be establishing a jumping off point for future CFPB activity, while the Manufactured Housing Institute (MHI) remarks the CFPB acknowledges the negative impact the Dodd-Frank Act, implemented in Jan. 2014, is having on the manufactured housing market.

Tim Williams of 21st Mortgage Corporation says the statement that 60 percent of chattel customers own their land and are therefore eligible for a conventional mortgage is incorrect, noting it is irresponsible of the CFPB to make such false statement. He says 26 percent of 21st’s borrowers say they own their land, but he is pleased the CFPB admits their regulations restrict credit to manufactured home owners.

When consumers are considering buying a site-built or a manufactured home, the two pieces of crucial information are the down payment and the monthly payment. MH sales people are restricted in what they can offer in response to such a question, while some believe it’s not a violation if a Realtor ® gives such information.

A chart from Fannie Mae demonstrates that even when the interest rate is higher for an MH, monthly payments often make the purchase of a manufactured home the lower cost option. The restrictions on MH salespeople helping consumers find financing can turn people away from even being interested in a manufactured home, further damaging the industry’s chances of offering affordable options, as Jason Boehlert, Senior VP of Government Affairs at MHI notes.

Major MH lenders have told MHProNews they have added staff to deal with the increase of applications being “shot-gunned” to multiple lenders, since the CFPB regulations took effect in Jan. 2014. This is increasing costs, all because MH retailers do not want to be accused of steering customers, which could result in heavy fines.

In addition, the lack of a secondary market for MH loans also limits mortgage lenders from making MH loans, which higher costs of funds makes the loan cost more to the borrower. The CFPB regulations result in lenders not accepting loans for under $25,000 because the cost to originate and service that sized loan makes them unprofitable.

While CFPB Director Cordray says, “Manufactured housing is a critical source of affordable housing for some consumers,” the regulations of the agency work is in the opposite direction—preventing potentially millions of Americans from buying durable, affordable, energy efficient homes that could stimulate the housing market and the jobs that would accompany the stimulus. ##

For the complete commentary, please click here.

(Photo credit: C-SPAN 2)