Posts Tagged ‘economist’

Reuters on U.S. Housing Price Pace, Manufactured Housing Visions

June 7th, 2018 Comments off


A poll by Reuters of property market analysists revels that “an acute shortage of affordable homes in the U.S. will continue over the coming year,” said a new report by CNBC.


U.S. house prices are slightly over-valued when looking at fundamental valuation metrics such as the median-home-price-to-income ratio,” noted Brent Campbell, economist at Moody’s Analytics.

While jobs growth and wages are rising at the best pace in years-to-decades, pay is not keeping pace with the even faster spike in housing costs. According to CNBC,Annual average earnings growth has remained below 3 percent even as house price rises have averaged more than 5 percent over the last few years.”

We are not seeing a temporary phenomenon. House prices have been outrunning family incomes for several years in the U.S. and while demand has cooled off a bit, the supply side is still very tight,” said Sal Guatieri, senior economist at BMO Financial Group.

Guatieri added, “I think house prices will continue to outrun family incomes for at least another year and it will take some time for demand to slow and to some extent supply to increase.”

Existing home sales account for “about 90 percent of U.S. turnover,” and are forecast to rise slightly and average 5.60 million units in each quarter this year from about 5.46 million units in April.

That would be well below the peak of 7 million units averaged during the previous housing market boom.  All of these are factors which will keep prices elevated and make housing less affordable.

As regular Daily Business News readers know, the National Association or Realtors ™ (NAR) Chief Economist Lawrence Yun has said that the only way to solve this is for builders to get very busy.


It’s a recipe – at least in theory – for a manufactured housing boom.  But for a variety of reasons, the industry has failed to convert surfers and seekers into more qualified applicants and cash buyers. ## (News, analysis, and commentary.)

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Wells Fargo – A Whole New Ball Game for Housing in 2015

January 15th, 2015 Comments off

sold-houses-increase-in-2015There is some good news on the horizon for the housing industry as many experts and economists expect an expanding market for 2015.

Most housing analysts are predicting substantial growth in housing activity in 2015 — much more than has been experienced during the past year. The Daily Journal  tells MHProNews  that the “2015 Economic Outlook issued by the Wells Fargo Economics Group is subtitled “A whole new ball game.”  This report predicts that the housing market will continue its recovery and gain momentum in 2015 after a disappointing 2014.

Wells Fargo cites a number of reasons in the report for its optimistic housing market predictions for next year: namely easing of credit, job and income growth, and mortgage rates nearing their lowest levels in a generation.

The economists predict existing home sales, which dropped by 3.8 % for the first 10 months of 2014, will grow by 4.1 % in 2015.

Single-family starts grew by only 6 % in 2014 because of a weak job market, slow household formation, tight lending standards and a backlog of troubled mortgages going through the foreclosure process.  However, these starts are expected to make a comeback in 2015. Economists expect that the percentage of single-family starts will more than double, up to 13.7 %.

Two major factors in the turnaround in homeownership have been the former rise in foreclosures and the earlier decline in home prices, according to Wells Fargo. The homeownership rate, which peaked 10 years ago, has fallen down to 64.4 %, the lowest rate for homeownership in 19 years.

“We would expect this series to overcorrect because of tight mortgage credit, changing attitudes towards homeownership and household finances that continue to be repaired,” the report says.

In addition, encouraging words come from the National Association of Home Builders. U.S. News & World Report tells MHProNews that Robert D. Dietz, an economist for NAHB, says “The signs suggest 2015 will be positive for housing, which in turn will generate benefits for the overall economy.” He predicts that single-family construction will grow in 2015 because of housing demand among prospective first-time home buyers.

David Payne, writing in the Kiplinger Letter, also predicts a stronger housing market in 2015. He says, “It’s the gradual easing of credit conditions that will break the leftover 2014 sales logjamThis easing will come from changes made by Fannie Mae and Freddie Mac.”

He continues by saying that first, down payments for Fannie and Freddie qualifying mortgages have been reduced from 5% to 3% for creditworthy first-time home buyers. This by itself will not open the floodgates, as most buyers in this category could have obtained a loan through the Federal Housing Administration (FHA). What is important is that the change signals mortgage lenders that Fannie and Freddie rules are beginning to relax, so lenders can consider making loans to folks that previously would have been ruled out automatically.” He also believes that lenders can lower interest rates, since they have less risk on loans sold to Fannie and Freddie.  ##

(Photo Credit: Kentucky Solutions)



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“You shouldn’t have to be a lawyer to run a business in America today…”

November 17th, 2014 Comments off

SEC-Commissioner-Daniel-Gallagher-crowdfunderinsider=credit-posted-daily-business-news-mhpronews-com-but that’s about where we are.” So says Heritage Foundation Economist David Burton, who explains that the Securities and Exchange Commission’s (SEC) own numbers makes it clear that it takes $2.5 million dollars to access the public capital market, and another $1.5 million in legal fees.

The comments were evoked in part because SEC Commissioner Daniel Gallagher spoke at a Heritage Foundation meeting recently. Townhall  tells MHProNews   that Gallagher says its the SEC’s mission it is to facilitate marketplace growth, yet the SEC’s leaders admits they haven’t done enough to help new companies take off.

Others interviewed by Capitol Source  make it sound far worse that Gallagher states. They say a dizzying array of federal regulations are choking off small businesses from expanding or starting up in the first place.

Citing House Committee on Small Business Chairman Sam Graves report,

  • Small firms bear a regulatory cost of $10,585 per employee, which is 36% higher than the cost of regulatory compliance for large businesses.(2010 SBA study, The Impact of Regulatory Costs on Small Firms)
  • Since 89% of firms in the United States employ fewer than 20 employees, the smallest businesses are shouldering a disproportionate regulatory burden. (NFIB)
  • Small firms pay 67% more to comply with the tax code than larger firms. (SBA Office of Advocacy)
  • Nearly 220,000 small businesses employing more than 26 million workers could be subject to the health care law’s employer mandate (“Health Care Reform and Your Business,” U.S. Chamber of Commerce; Entire Small Business 1 page summary report is linked here).

As industry pros and aficionados know, most manufactured housing operations fall into the small business category described by these sources. ##

(SEC Commissioner Daniel Gallagher photo credit, CrowdFunderInsider)

NAR releases 2013 Profile of Home Buyers, Sellers

November 20th, 2013 Comments off

Highlights-NAR-HBS-2013lawrence_yun,_nar_chief_economist=realtor-mag-realtor-org-The National Association of Realtors (NAR) recently released its 2013 Profile of Home Buyers and Selelrs. Saint Louis Today tells MHProNews the American Dream of home ownership is alive and well. Sixty-six percent of buyers surveyed are married couples, the highest percentage since 2001. The percentage of single home buyers dropped to 25 percent, which is a drop of 7 percent in the last two years. “Single homebuyers have been suppressed the last three years by restrictive mortgage lending standards, which favor dual-income households that are more likely to have higher credit scores,” said Lawrence Yun, NAR chief economist, about the survey results. “Affordability conditions remain favorable in much of the country, but consumers need access to safe and sound financing, particularly the 30-year, fixed-rate mortgage and with low down payment options for first-time buyers.”

You can download an abridged version of the NAR 2013 Profile of Home Buyers and Sellers here. ##

(Photo credit: RealtorMag)

Many Groups of Home-buyers Squeezed out by CFPB rules?

September 3rd, 2013 Comments off

 vice-wikicommons-posted-daily-business-news-mhpronews-New CFPB imposed guidelines for mortgages loans aren’t just threatening manufactured housing, they are squeezing conventional housing buyers too. Sam Khater, senior economist at CoreLogic said: “It will tighten things further. The largest constraint is the 43 percent threshold,” said Khater. “It will hit more refinances than purchases because a lot of them use a high debt-to-income ratio. It will also hurt home borrowers in distressed environments.” Yahoo! Homes tells MHProNews that new regs are hurting (1) First time home buyers, (2) those who had a career disrpution in the last 5 years, (3) those in high priced markets, (4) the self-employed and business owners; (5) widowed, divorced and seniors – even those with good credit – may have more trouble than pre-housing-mortgage bubble burst. “Baby boomers entering retirement and young adults will feel a disproportionate impact because of their lower income levels.” One group not harmed are the rich, and all cash buyers, as we reported in this recent stories linked. While no one really wants to see housing harmed, this could prove to be an opportunity for manufactured home communities and retailers, who successfully tap into the inability of these groups to buy traditional houses. ##

(Photo credit, WikiCommons)


Home Prices Continue Rising

July 30th, 2013 Comments off

While the S&P/Case-Shiller national home price index of the 20 largest markets remains 24.4 percent below the peak of June 2006, it rose 12.2 percent in May above May 2012, the largest year-over-year increase since March 2006. April 2013 rose 12.1 percent over April 2012. A year ago homes that had been on the market for many months, even years, began selling, with prices rising each month since June 2012, and each month saw a bigger increase than the previous month. The rise in mortgage rates has yet to stem the rise in prices, which have been fed by an accompanying drop in foreclosures. Some of the markets hardest hit by the housing bubble are the ones experiencing the largest current gains: Prices in San Francisco, Las Vegas, Phoenix and Atlanta are all up more than 20% from a year ago. Some fear the housing bubble may return, according to what CNNMoney tells MHProNews. But Joseph LaVorgna, chief US economist for Deutsche Bank, says, “Affordability remains near historic highs despite the recent rise in rates and home prices. And the increase in home prices should encourage banks to ease lending standards for mortgages, since the collateral for the underlying loan is appreciating in value.”

(Image credit: etftrends)

Housing Recovery Still Tenuous

June 5th, 2013 Comments off

As HousingWire informs MHProNews, although the media is overflowing with glowing reports about the housing market recovery, it is not time to celebrate yet. CoreLogic reports April home prices were up 12 percent over April 2012, and 3.2 percent higher than March, but the market continues to need more move-up buyers and new homebuyers to even approach pre-crisis levels. Seven years ago everyone thought real estate prices would continue to rise, but the bursting of the housing bubble brought that to a sudden end. While the market is improving, economist Ed Stansfield with Capital Economics says the 12 percent increase is a short-term gain due to shrinking inventory, and if supply rises, prices could moderate. He says, “All in all, it is important not to lose sight of the fact that despite the rapid gains of the past year, home prices in the U.S. are still over 20% below their previous peak. That suggests that there is some way to go before the risks of further house price gains outweigh the support that housing is lending to the wider recovery.”

(Image credit: Fotosearch–crystal ball businessman)

New Home Sales Post Increase

May 24th, 2013 Comments off

The National Association of Home Builders (NAHB) reports HUD and Census Bureau figures show sales of newly-built single-family homes rose 2.3 percent in April to a seasonally-adjusted annual rate (SAAR) of 454,000 homes. “Today’s report is further evidence of the gradual, consistent improvement we have been seeing in housing market conditions over the past year,” noted NAHB Senior Economist Robert Denk. “We’re now about half-way back to what could be considered a full recovery, and we do expect to see continual, solid gains in both starts and sales of new homes going forward.” Regionally, new-home sales rose 10.8 percent in the West and 3.0 percent in the South while declining 16.7 in the Northeast and 4.8 percent in the Midwest. As MHProNews has learned, the inventory of new homes for sale rose to 156,000 units, a 4.1 month-supply at the current pace of sales.

(Photo credit: Fotosearch)

Federal Reserve’s Bond-Buying May End by Next Year

May 2nd, 2013 Comments off

According to nationalmortgagenews, a survey of economists by Bloomberg reports Federal Reserve Chairman Ben Bernanke is expected to reduce the quantitative easing that has been used to bolster the economy from $85 billion monthly to $50 billion by year’s end. That would be followed by a second cut to $30 billion next year and then an end to bond buying altogether, providing interest rates do not suddenly shoot up. Former Fed economist Joseph LaVorgna, noting the accommodation withdrawal is unprecedented territory, says, “You want to see how the market is going to digest a cut in purchases so you want to do it in a way that minimizes the disruption.” The Fed started purchasing $40 billion a month of mortgage-backed securities is Sept., 2012 and then increased it by $45 billion in Dec. Sixty-one percent of the 47 economists in the survey say they expect the bond-buying to end in the first half of 2014. As MHProNews has learned after its last meeting March 20, the Fed pledged to keep buying securities until there is substantial improvement in the job market.

(Image credit: Fotosearch)

Abandoned Homes Continuing to Hold Back the Market?

April 24th, 2013 Comments off

According to nationalmortgagenews, banks are the ones walking away from vacant homes these days, starting but not completing the foreclosure process because they do not want the responsibility for maintaining the property, resulting in hundreds of thousands of homes being withheld from the market. In some cases, homeowners who have already left the property are being hit with back taxes, repairs, insurance and unpaid debt. Thomas Fitzpatrick, an economist in the community development department at the Federal Reserve Bank of Cleveland, states “We’re seeing more and more, banks getting a judgment to sell a home but not taking it to a foreclosure sale. It may cost more to cure the back taxes and bring the property up to code than they could ever get from selling the property itself.” Data from RealtyTrac indicates 35 percent of the roughly one million homes in the foreclosure pipeline are abandoned and the servicer has not taken title to the property. Last year the Federal Reserve issued directives requiring servicers to notify borrowers and municipalities when they decide not to pursue foreclosure, but no time line was given and enforcement can be difficult. MHProNews has learned this may be contributing to the increase in prices on existing homes. Says Ruhi Maker, a senior staff attorney at the nonprofit Empire Justice Center in Rochester, N.Y. “I have long been convinced that the current run up in home prices is a false high. Once all these foreclosures are through the system we could see another decline in prices.”

(Image credit: condometropolis)