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Posts Tagged ‘fitch ratings’

Housing Market has more Room for Expansion: Fitch Ratings

June 21st, 2016 Comments off

housing_recovery__globest.com__creditAccording to the 2016 U. S. Housing Forum report from Fitch Ratings, the housing market’s current upswing should last for two more years, as reported by nationalmortgagenews to MHProNews.

Using single-family starts as a proxy for overall housing metrics, and calculating that single-family starts have risen in five of the last six years, Fitch analysts forecast the expansion of the housing market for two more years based on an historical pattern.

The report said the average length of an upswing market is 4.3 years, when excluding the cycle preceding the most recent financial crisis. That cycle lasted about 14 years of expansion followed by five to six years of contraction.

Since 2012 single-family starts have risen consistently, and although it has not been as sizeable as in previous housing cycles, 2015 saw a 10.3 percent increase. Last year’s production hit 1.1 million properties, which included 720,000 single-family homes, short of the average of one million starts which the commentator, Jacob Passy, indicates the current upcycle has room to continue.

Meanwhile, First American Financial Corp.’s Potential Home Sales model for May indicates the market for existing home sales is under performing its potential by 2.8 percent, as they fell short of the seasonally adjusted annual rate (SAAR) of 156,000 in May, although an improvement over the 232,000 shortfall in April. ##

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

Fitch Ratings Predicts Homes for Sale Inventory to Change Little in 2016

February 22nd, 2016 Comments off

house price increases  housingwire  creditAccording to what housingwire tells MHProNews, Fitch Ratings reports that, after four years into the housing recovery, the shortage of inventory continues to plague the market, unlike past recoveries, which reduces housing options. Fitch says this is true of existing homes as well as new homes.

The National Association of Realtors (NAR) notes that existing home inventory for sale fell 12.3 percent in Dec., 2015 to 1.79 million homes, 3.8 percent lower than one year ago. In the meantime, unsold inventory is at a 3.9 month supply at the current sales pace, a drop from 5.1 months in Nov., and the lowest since Jan. 2005 when the pace was at 3.6 months.

Just as many construction workers left the industry during the downturn, so too did developers who have been cautious in their approach, and financially constrained in broad lot development. Additionally, the high cost of buildable lots has been working against the recovery.

The report says while some of the larger public builders plan to offer more affordable homes to first-time buyers, and are considering subdivisions in outlying areas, more meaningful inventory this year than in 2015 is not anticipated.

As measured by the Census Bureau, new home sales prices will rise 2.0%–2.5% this year. Fitch adds there will be some increase in sales of starter homes.

As MHProNews understands it, lower inventory of homes for sale puts upward pressure on home prices, and when combined with wages rising slower than the price of homes, putting home prices out of reach of many would-be first-time homebuyers. ##

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

Senator Elizabeth Warren Raises Concerns over non-bank Mortgage Servicers

October 29th, 2014 Comments off

mortgage    andyenstallblog  creditInstrumental in the formation of the Consumer Financial Protection Bureau (CFPB) and a strong proponent of financial reform, U. S. Senator Elizabeth Warren (D-Massachusetts), noting the rise in non-bank mortgage servicers, is asking the Government Accountability Office (GAO) to investigate the risks to consumers.

A report by the Federal Housing Finance Administration-Office of the Inspector General says,The nonbank special servicers do not have the same capital requirements as a bank, which means they are more susceptible to economic downturns. Such downturns could substantially increase nonperforming loans that require servicer loss mitigation while at the same time impact the ability of the servicer to perform.”

According to housingwire, in a letter to the GAO, along with Congressman Elijah Cummings (D-MD), they say,We are writing to request a study of the vulnerability of nonbank mortgage servicers to economic downturns given the lack of capital requirements applicable to these servicers and of the risks posed to consumers by continued growth in nonbank specialty mortgage servicing.”

A recent report from Fitch Ratings says of all private-label securities by loan count, nonbanks now service 74 percent, an increase from 48 percent in 2004, and nearly all of the 74 percent is in the hands of the top five nonbank servicers. Ocwen Loan Servicing, Nationstar, Select Portfolio Servicing, Green Tree Servicing and PHH Mortgage Corp. hold 64 percent of all non-agency servicing. Fitch Managing Director Roelof Slump said, “Nonbank servicers have grown significantly through the sale and transfer of difficult-to-service loans from large banking institutions.

New York Department of Financial Services Superintendent Benjamin Lawsky says Ocwen backdated letters to possibly hundreds of thousands of borrowers. “In many cases, borrowers received a letter denying a mortgage loan modification, and the letter was dated more than 30 days prior to the date that Ocwen mailed the letter,Lawsky writes.These borrowers were given 30 days from the date of the denial letter to appeal that denial, but those 30 days had already elapsed by the time they received the backdated letter.”

Ocwen apologized for the errors in their correspondence system, saying of the 283 borrowers in New York who received letters with incorrect dates, 281 continue to be borrowers. However, Moody’s, Bank of America and Evercore Partners downgraded Ocwen’s ratings, and company stock fell 20 percent. As MHProNews has learned, the stock remains 20 below the initial reading one week later. ##

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(matthew-silver-daily-business-news-mhpronews-comSubmitted by Matthew J. Silver to Daily Business News-MHProNews)

Fitch Predicts Housing Market will Expand 16 Percent

July 22nd, 2014 Comments off

Fitch Ratings expects the housing market to continue growing this year and become much stronger in 2015, according to housingwire.com. Fitch forecasts single-family housing starts to grow 9.5 percent the remainder of the year to 677,000, and new home sales to advance eight percent to 465,000 while home volume will drop five percent to 4.835 million because of fewer distressed homes for sale. Fitch analysts further say, “Growing strength in the economy, employment and demographics should positively influence housing next year. Total housing starts are projected to expand 16% to 1.185 million as single-family starts advance 21% and multifamily volume gain 6.7%. New home sales should improve more than 20%, while existing home sales rise 5%.” In addition, MHProNews has learned Fitch predicts more of the Millennials now living at home will find work and “provide some incremental elevation to the rental and starter home markets.” ##

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Slowdown in Wage Growth may Slow Down Home Sales

January 31st, 2014 Comments off

Fitch Ratings reports while home prices continue to gradually climb nationwide, especially in the western U. S., it is due to low inventory resulting from slow construction rates of new homes. There are also many homes still mired in the foreclosure pipeline, according to housingwire.com. “In markets with short supply, increased demand from institutional investors and individual borrowers returning to recovering markets has created the conditions for the sharp climb in prices,” said Stefan Hilts, a director at Fitch.

While gross domestic product (GDP) grew at an annualized rate of 4.2 percent, the strongest in nearly a decade, the unemployment numbers are falling because people are withdrawing from the workforce. As MHProNews.com has learned, the economic base has declined in many traditional employment sectors, with median wages remaining depressed. Median household income is eight percent lower than in 1999, in real terms, compared to the fourth quarter 2013. “With median wage levels stagnant, many potential buyers do not have the resources necessary to participate in the home ownership market,” says Hilts.

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Shortage of Skilled Tradespeople may Slow Recovery

June 24th, 2013 Comments off

A shortage of skilled trades workers combined with tight credit and lack of available finished lots may slow the housing market rebound, according to Fitch Ratings, although the only likely downside is a longer construction timeline. Prior to the Great Recession, over eight million construction workers were employed, but according to the Bureau of Labor Statistics, as of May 2013 that number stood at 5.8 million. Many tradespeople left the field during the downturn and have not returned, feeding into the shortage. Currently, as HousingWire tells MHProNews, the only areas experiencing shortages are metro markets recovering faster than the national average, such as those in Fla., Calif., Nev., and Ariz.

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