Archive for October, 2016

A Treat for Economy: Higher Halloween Sales

Posted on October 31, 2016 by Laura Lam

Halloween spending is expected to top $8.4 billion this year, according to the National Retail Federation (NRF), the most since tracking began 11 years ago.  Its survey found more than 171 million Americans plan to celebrate Halloween, spending an average of $82.93, up from last year’s $74.34. Handing out candy is the most popular Halloween activity, with 70% planning to greet trick-or-treaters at the door. Consumers planning to dole out sweet treats are predicted to spend 5.5% more on Halloween candy compared to last year, bringing the anticipated total spend to $3.8 billion – or $30.60 per household. If realized,…

Consumer Delinquencies Hit New Low

Posted on October 24, 2016 by Laura Lam

Consumer delinquencies fell last quarter to their lowest point in at least 15 years, according to quarterly data released by the American Bankers Association (ABA).  The percentage of overdue closed-end loans was 1.35% in the second quarter, down three basis points from the first quarter. The ABA’s so-called composite ratio tracks delinquencies in 8 closed-end installment loan categories including personal, home equity and direct auto loans. It defines a delinquency as a payment that is 30 days or more overdue. The latest figure was the lowest since at least 2001, and it marked nearly 4 years of delinquencies below the…

New Home Mortgage Apps Rise 3% in September

Posted on October 21, 2016 by Laura Lam

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for September 2016 shows mortgage applications for new home purchases increased 3% relative to September 2015. Compared to August 2016, applications decreased by 7%. This change does not include any adjustment for typical seasonal patterns. “After a strong start in 2016 and despite evidence of increasing costs, mortgage applications for new homes have maintained a pace modestly above 2015 rates,” said Lynn Fisher, MBA’s Vice President of Research and Economics. “The monthly decline in mortgage applications in September is largely attributable to typical declines in building activity this time of year….

Is the Foreclosure Crisis Finally Over?

Posted on October 20, 2016 by Laura Lam

Foreclosure filings dropped to the lowest level reported since December 2005, signaling the end of the country’s foreclosure crisis, according to Attom Data Solutions.  In September, there were 82,972 properties in foreclosure, down 13% from August and 24% from the same time a year earlier. For the third quarter, there were a total of 293,190 properties with foreclosure filings, representing a 4% increase from the previous quarter but a 10% drop from a year ago. Perhaps the clearest indication that the housing market has reached the end of the foreclosure crisis is in the year-over-year decline in the average time…

Americans Fall Behind on Car Loan Payments

Posted on October 19, 2016 by Laura Lam

Subprime borrowers are falling behind on their car loan payments at the highest rate in more than six years, and some bonds backed by these loans are vulnerable to getting downgraded, according to S&P Global Ratings. Competition has spurred lenders to loosen standards and resulted in more delinquencies and default by people with weak credit, the ratings firm said. Subprime borrowers were behind by more than 60 days on about 4.85% of auto loans in August, the highest level since January 2010. The rate was 4.14% in August of last year.  For prime loans, delinquencies in August rose to 0.5% from…

High Rents and Student Debt Hinder Homeownership

Posted on October 18, 2016 by Laura Lam

Higher rental costs and student loan debt continue to prevent many Americans from purchasing a home, according to the results of a survey from NeighborWorks America.  NeighborWorks reported that 56% of survey respondents said that rents are too high where they live for them to be able to save enough to buy a home. Similarly, 53% of potential homebuyers with student loan debt said that their debt was either somewhat or very much an obstacle to that purchase.  Another 30% of respondents said they knew someone who delayed a home purchase because of their student loan debt. The two issues…

Existing Homes Fall to 7-Month Low

Posted on October 17, 2016 by Laura Lam

Contracts to purchase previously owned homes fell to a seven-month low in August, held back by a tight supply in the housing market, according to a recent report from the National Association of Realtors.   Pending home sales fell 2.4% (the median forecast was for no change) after a revised 1.2% increase in July. The index dropped to a seasonally adjusted 108.5, the lowest since January, from 111.2 in July. Contract signings rose 4% from August 2015 on an unadjusted basis. The fall in contract signings was the third in four months, adding to signs that a relative paucity of available homes…

Presidential Candidates Need to Focus on Housing

Posted on October 14, 2016 by Laura Lam

Hillary Clinton and Donald Trump should face more questions about housing policy according to Fannie Mae CEO Tim Mayopoulos.  While Mayopoulos declined to endorse any political candidates, he bemoaned the lack of discussion about housing issues throughout the presidential race in response to a question from the audience. “What’s been striking to me is that despite the fact that we came through a financial crisis that had housing issues at its core, there’s really been no discussion about housing policy,” he said. “Neither of the candidates has really advanced any strong views or positions around housing policy going forward.” What…

24% of Housing Markets Less Affordable Than Norm

Posted on October 13, 2016 by Laura Lam

Homes were less affordable than their historic averages in 24% of U.S. markets as prices rose and wage growth slowed, Attom Data Solutions found in its third-quarter affordability index.  Attom reported that affordability worsened compared with the second quarter and a year ago when the share of markets that were less affordable than normal was 22% and 19%, respectively. In total, 101 of 414 counties had an affordability index below 100 for the quarter, which indicates that a median-price home was less affordable than the average based on data going back to 2005.  Additionally, in 89% of markets home price…

Commercial Mortgage Delinquencies Begin to Rise Again

Posted on October 12, 2016 by Laura Lam

Late payments on securitized commercial mortgages reversed course in September and resumed a climb that began in March, according to Trepp.  The delinquency rate for U.S. commercial real estate loans in CMBS is now 4.78%, an increase of 10 basis points from August. The September jump represents the 6th time in the last 7 months that the rate has increased after falling to a multiyear low of 4.15% in February. The rate is 50 basis points lower than the year-ago level and 39 basis points lower since the beginning of the year.  The all-time high was 10.34% in July 2012….