Posts Tagged ‘Interest Rates’

4 Concerns of Homebuilders Have Impacting Every American

March 20th, 2018 Comments off


PwC Partner Mitch Roschelle says that homebuilders’ optimism is retreating. Roschelle cites among the factors behind the decline – land, labor and lumber – which could affect every American who owns or rents a house.


You could add one more “L” to Roshelle’s list, LIBOR.

LIBOR is a benchmark rate, which some of the world’s leading banks charge each other for short-term loans. It stands for London Interbank Offered Rate, and serves as a first step to calculating interest rates on various loan products throughout the world.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) tells MHProNews that their builder sentiment gauge fell to 70, the lowest reading since last November.


Builders’ optimism continues to be fueled by growing consumer demand for housing and confidence in the market,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, LA. “However, builders are reporting challenges in finding buildable lots, which could limit their ability to meet this demand.”


A strong labor market, rising incomes and a growing economy are boosting demand for homeownership even as interest rates rise,” said NAHB Chief Economist Robert Dietz to the Daily Business News. “With these economic fundamentals in place, the single-family sector should continue to make gains at a gradual pace in the months ahead.”


Problems for Stick-Builders Could be Good News for Manufactured Housing…

Producers tell MHProNews that when components like steel, aluminum or lumber rise for conventional builders, even though it goes up for factory builders too, they increase is often less steep. Bulk purchase buying power is one reason for the advantage.

Less waste in the building process is another.

Manufactured housing sales have risen steadily since it hit its all-time low in 2009.


In spite of the obvious price and other advantages that manufactured housing has over conventional builders, the industry has still lagged behind.

The causes for that lag have been explored in other reports, including the analysis sparked by the Urban Institute’s report on manufactured housing. ## (News, analysis, and commentary.)


Urban Institute Ask for Correction in Analysis of their Manufactured Housing Research, “Follow the Facts,” “Follow the Money”

HUD Comment Letter – FR-6075-N-01 Regulatory Review of Manufactured Housing Rules

Reaching for the Sky, Multiple Level HUD Code Manufactured Homes

First Things First in Manufactured Housing

(Third party images, and cites are provided under fair use guidelines.)

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Rising Home Prices Partially Negate Low Mortgage Rates

May 2nd, 2016 Comments off

mortgage app   texaslendingtoday creditJacksonville, Fla.-based Black Knight Financial Services tells MHProNews rising home prices across the country are offsetting the advantage of low mortgage rates.

The fall of interest rates 35 basis points since Jan. 1, 2016 would translate to a savings of approximately $44 dollars a month. “While borrowers might expect that $44 per month savings home price appreciation, which Black Knight calculated at an annual rate of 5.3% in February, it would shrink that savings to just $18 per month nationwide,” reports nationalmortgagenews.

Higher home prices have totally negated savings from low interest rates in Washington, Colorado and Oregon.

Ben Graboske of Black Knight said despite rising prices, the mortgage on a median-priced home is still better than it was in Dec. “If rates hadn’t dropped over the past four months, it would cost an additional $28 to buy the median-priced home today as compared to December 2015,” he noted.

The drop in mortgage rates has added 2.3 million borrowers to the refinanceable population year to date, totaling 7.5 million across the nation.

Additionally, Black Knight reports the delinquency rate fell 8.37 percent from the previous month to 4.08 percent, placing the figure squarely below the rate from 2000 to 2005. The report noted the serious delinquency and the 90-day delinquency rates are still high.

Mississippi had the highest percentage of noncurrent loans while Arkansas had the lowest. ##

(Image credit: texaslendingtoday)

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

Freddie Mac Forecasts Best Year in Ten for Housing Industry

April 1st, 2016 Comments off

crystal ball foto searchAccording to what Freddie Mac tells MHPrpNews in nationalmortgagenews, despite low wage growth this year, the housing market will reach its highest level in sales, housing starts and housing prices since 2006. It will be largely driven by interest rates that remain below four percent for a 30-year fixed rate, even given the Fed’s rate hike.

Wage growth is “’anemic, barely keeping pace with inflation,” says Freddie, and labor force participation has fallen. (MHProNews adds: In the one day since this article was published, 215,000 more jobs were added in March, and the unemployment rate rose from 4.9 percent to five percent, indicating more people were out looking to rejoin the work force.)

Freddie cautions: “If wages and incomes do not start rising, then rising interest rates, home prices and rents will squeeze households and ultimately slow housing markets.” However, a slowdown in site-built homes could be a spur for the manufactured housing industry. ##

(Image credit: fotosearch)

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

Oregon Assists First-time Homebuyers with Low Rates

September 3rd, 2015 Comments off

manuf home  golden west david patton albany democrat heraldMHProNews has learned from ktvz that Oregon offers first-time homebuyers the opportunity to purchase a home at below-market interest rates, according to Oregon Housing and Community Services (OHCS), including manufactured homes (MH).

Using the proceeds from tax exempt revenue bonds, the Oregon Bond Loan program has two options: the first offers an interest rate of 3.25 percent; the second provides a 3.75 percent interest rate and the opportunity to use up to three percent of the loan for closing costs. In addition to MH, the loan is applicable to any home or qualified condo in the state.

Aubre Dickson, chair of the State Housing Council, said,Buying a home is a life-long dream for many families and provides them with an opportunity to secure a better future for themselves and their kids. Purchasing a home at an affordable interest rate is one of the best ways to ensure they will be able to continue to remain stable in their homes for years to come.

OHCS partners with participating mortgage lenders, local governments and non-profit organizations to assist homebuyers. ##

(Photo credit: albanydemocratherald/David Patton-Golden West manufactured home, Albany, Oregon)

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

Could the Dow Jones Drop 1,000 Points? History says Maybe

August 24th, 2015 Comments off

forbes creditIn the wake of the Dow Jones’ precipitous fall of 530 points last week, Brett Arends, writing for marketwatch, says while the “perma bulls,” as he calls them, are gloating while the stocks continued ascending with barely a hitch, to characterize this as another buying opportunity he says is nonsense.

While stocks may bounce back temporarily, without being an alarmist it’s possible the Dow could conceivably fall to 5,000. He says for 30 years the stock market has been buoyed by falling interest rates and manipulation by the Federal Reserve—the latest being the quantitative easing to boost the economy—and a fall of 70 percent cannot be totally discounted, as MHProNews understands.

Let me say on the record that I am not joining the perma-bears or extreme doom-mongers. I am simply pointing out that the perma-bulls have taken their own arguments way too far. The stock market is not doomed to collapse to oblivion, as some hysterics keep claiming. But it is not certain to keep going up by 10% a year, either. All those claiming that every sell-off is a buying opportunity, and that stocks ‘always outperform,’ are lying to you,” says Arends.

Stock market history indicates the market has moved in long upward and downward swings, and we might be in the downward trajectory that began in 1982. He says, “Those big downward moves have not ended until share valuations have fallen to just 30% of the replacement cost of company assets.

Using a metric tool called tobin’s Q, which has been the most accurate measuring stick of any stock market indicator—better than price-to-earnings ratios or economic growth rates or long-term interest rates—says Arends, ”The “q” looks at the net asset values of public companies and adjusts them for inflation. It makes some intuitive sense. Why would Widget Inc. be valued at $1 billion on the stock market if you could start the company from scratch for a lot less?

Currently, the reading on the “q” is 100 percent, but it has averaged 70 percent since WWII, so if the Dow fell to its modern average valuation, it would be 12,000. If we consider the years 1949 to 1994 before the boom of the late 1990s, the average was 57 percent, which would reduce the Dow to around 9,500. Worst case scenario would see the Dow fall to 5,000, its historic bear market lows—30 percent of its current value.

He reminds us that at some point all the artificial stimulants will have to end, and while it is not likely the Dow will fall that far, that possibility should not be ruled out. The real danger, he adds, is that 99 percent of the people managing America’s money do not believe it is possible.

While few if any in MH would publicly say they want this to happen, if it did, with the right educational/marketing effort there could be a silver lining for manufactured housing. ##

(Image credit: forbes)

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

Honda Agrees to Cease Discriminatory Automobile Lending

July 20th, 2015 Comments off

mortgage    andyenstallblog  creditThe Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) resolved an action with American Honda Finance Corp. over charges the auto maker’s pricing policies discriminated against people of color, resulting in their paying higher interest rates, regardless of creditworthiness, than white borrowers for auto loans.

As part of the settlement, Honda will alter its pricing system to minimize dealer discretion, which will reduce the risk of discrimination. The company will also pay $24 million in restitution to a settlement fund that will go to borrowers who were affected by the discriminatory lending from January, 2011 to July 14, 2015, as MHProNews has learned. Honda will report to the CFPB on its compensation activity.

When consumers purchase an automobile on credit, the dealer can facilitate the loan through a third-party, like Honda’s finance arm, which charges the dealer an interest rate, and then the dealer might negotiate a higher interest rate with the customer at their discretion. This formula resulted in Honda charging minority borrowers from $150 to over $250 more for their auto loans, thereby violating the Equal Credit Opportunity Act.

In addition to the $24 million restitution, Honda will also reduce or eliminate dealers’ flexibility in adding to the interest rate. The CFPB did not assess penalties against Honda because of the auto maker’s response in adjusting its policies to eliminate discriminatory lending.

The CFPB is committed to creating a fair marketplace for all consumers, and other auto lenders should take note of today’s action,” said CFPB Director Richard Cordray. “Honda’s proactive decision to move to a new pricing and compensation system demonstrates industry leadership and represents a significant step towards protecting consumers from discrimination.

As MH Pros should consider this action in the light of the CFPB regulations that impact MH lending.  Check with your attorney or state association for greater insights, ##

(Image credit: andyenstallblog)

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

Turning Renters to Manufactured Home Buyers

June 4th, 2015 Comments off

rent versus buy   rent-directMHLivingNews and MHProNews publisher L.A. “Tony” Kovach follows the time line formation of renter households versus homeowner households, from the New Deal’s attempts to increase homeownership in 1933 to present day attempts, correlating Fannie Mae and Freddie Mac expansion with economic programs, artificially induced interest rates and subsidies to stimulate home buying.

In the 1990s and into the 2000s there were concerted efforts to extend credit to those with modest means in an attempt to keep the American dream of homeownership alive, to give people hope. The Federal Reserve’s key interest rate was the lowest in 45 years, but lenders got loose with loan standards, which led to homeownership peaking at 69.2 percent in 2004.

However, home prices begin falling as the subprime mortgage industry imploded: bundles of questionable loans were sent around like hot potatoes until the potatoes turned rotten, leading to the Great Recession in 2008. Foreclosures increased, lending standards tightened, home prices bottomed out, employment fell, and many people turned their backs on owning a home, leading to a rise in the rental market.

Although the recession was declared over in June 2009, the recovery of the housing market, which is a major ingredient of a strong economy, has been painfully slow. First-time home buyers historically comprise 40 percent of home sales, but that number has fallen to 30 percent, leading to slack new household formation as Millennials slowly emerge from their parents’ basements and head to rental properties.

Employment has been increasing but wages are flat, and as the demand for rentals increase, so do the rents, putting homeownership further out of reach of many would be homebuyers.

Kovach: “Manufactured housing is ideally suited to tap into this rental market. As we reported last year, the National Association of Realtors (NAR ®) reported that some 85% of renters in a survey said they want to be home owners.

The reason we in MH can make this happen is because we can save them money and give them the lifestyle they want. But it won’t happen without a planned effort that changes perceptions.

John Bostick, CEO and president of Sunshine Homes, encourages manufactured home professionals to get behind Kovach’ MH Alliance-Partners in Progress-effort to help spread the good news about quality MH to the public at large. He says,”We either define ourselves or others will define us. When others define us, it is often to our detriment.

Others have been defining the industry for way too long. It’s time to turn the tables. Average rent nationally is around $1200 a month. Average price of a new manufactured home is $64,000. Do the math.

For the full article, please click here. ##

(Image credit: rentdirect)

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

Manufactured Home Sites Transitioning to Stick Built

June 1st, 2015 Comments off

eden_mobile_home_park_eden_nc__google__creditBack in the early 1980s when interest rates were running around 15 percent, veteran North Carolina builder Homer Wright constructed Northridge Mobile Home Park in Eden, North Carolina so those of modest means could find an avenue to affordable homeownership. The manufactured home community has 130 home sites, and at one time they were all filled, according to greensboro.

Looking to the future as he developed Northridge, Wright made the home sites large enough to accommodate stick-built homes. Now, as people have moved their manufactured homes, often to their own land in other parts of the county, he has begun a development of site-built homes. None of the MH owners are being forced out, but as they move, homes are going up in a subdivision now renamed Summit Place.

Just as he encouraged homeownership in the past, MHProNews understands Wright is laying similar groundwork: His houses start at $89,500 as a draw for first time homeowners and retirees. ##

(Photo credit: google photos -Northridge Mobile Home Park)

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

Will Higher Interest Rates Affect the Housing Market?

March 28th, 2015 Comments off

house price increases  housingwire  creditAccording to what housingwire tells MHProNews, Motley Fool got opinions from three of their analysts abut the effect of rising interest rates, which the Federal Reserve will very likely raise in either the second or third quarter.

Matt Frankel says marginally higher interest rates will not impact the real estate market that significantly because, at least in the short term, mortgage payments will not be that much greater.

Jordan Wathen believes rising interest rates will reduce the amount of real estate on the market because it will be less attractive to move, and will prevent marginal homebuyers from entering the market. He also states household formation has been increasing since the Great Recession, and that will have the strongest impact on the real estate market. He does not think higher interest rates will affect that progression.

Dan Caplinger says the low interest rates have allowed homebuilders to purchase land inexpensively, giving them more opportunities for development. He says higher interest rates will make them more selective about building homes, and that could impact their share prices. ##

(Image credit: housingwire--house price increases)

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

Mortgage Rate Increase highest in Ten Months

September 18th, 2014 Comments off

mortgage claculator bankrate ceditIn the largest increase since November of 2013, the 30-year fixed mortgage rate rose 14 basis points from one week ago to 4.19 percent, although it peaked on Sunday at 4.30 percent and then fell, according to Erin Lantz of Zillow says the rates hit a five-month high last week in anticipation of the possibility that the Federal Reserve might raise the interest rate this week, but as MHProNews noted earlier, the Fed is holding the line on interest rates until at least next summer. The rate for a 15-year fixed home loan currently sits at 3.26 percent. ##

(Image credit: