December 2022 – Page 3

us home equity gains rose annually in q3 but fell sharply from q2

by admin
Comment Off
323 views

CoreLogic®, a leading global property information, analytics and data-enabled solutions provider, released the Homeowner Equity Report (HER) for the third quarter of 2022. The report shows that U.S. homeowners with mortgages (which account for roughly 63% of all properties) saw equity increase by 15.8% year over year, representing a collective gain of $2.2 trillion, for an average of $34,300 per borrower, since the third quarter of 2021. Nationwide, annual home equity gains began to slow in the third quarter of 2022, with the average borrower netting $34,300, compared with the nearly $60,000 year-over-year gain recorded in the second quarter. Slowing prices also caused an additional 43,000 properties to fall underwater. The quarter-over-quarter decline in equity is partially due to cooling home price growth across the country, as annual appreciation fell from about 18% in June to just slightly more than 10% in October. As home price gains are projected to relax into single digits for the rest of 2022, then possibly move into negative territory by the spring of 2023, equity increases will likely decline accordingly in some parts of the country. “At 43.6%, the average U.S. loan-to-value (LTV) ratio is only slightly higher than in the past two quarters and still significantly lower than the 71.3% LTV seen moving into the Great Recession in the first quarter of 2010,” said Selma Hepp, interim lead of the Office of the Chief Economist at CoreLogic. “Therefore, today’s homeowners are in a much better position to weather the current housing slowdown and a potential recession than they were 12 years ago.” “Weakening housing demand and the resulting decline in home prices since the spring’s peak reduced annual home equity gains and pushed an additional number of properties underwater in the third quarter,” said Hepp. “Nevertheless, while these negative impacts are concentrated in Western states such as California, homeowners with a mortgage there still average more than $580,000 in home equity.” Negative equity, also referred to as underwater or upside-down mortgages, applies to borrowers who owe more on their mortgages than their homes are currently worth. As of the third quarter of 2022, the quarterly and annual changes in negative equity were: Because home equity is affected by home price changes, borrowers with equity positions near (+/- 5%), the negative equity cutoff, are most likely to move out of or into negative equity as prices change, respectively. Looking at the third quarter of 2022 book of mortgages, if home prices increase by 5%, 127,000 homes would regain equity; if home prices decline by 5%, 172,000 properties would fall underwater. The next CoreLogic Homeowner Equity Report will be released in March 2023, featuring data for Q4 2022. For ongoing housing trends and data, visit the CoreLogic Intelligence Blog: www.corelogic.com/intelligence. Source: CoreLogic Contacts Media Contact:Robin Wachnernewsmedia@corelogic.com

by admin
Comment Off
435 views

Foreclosure Activity Remains Up 57 Percent from Last Year, and Foreclosure Starts Increase Annually by 98 Percent; But Both Measures Down from October 2022 ATTOM, a leading curator of real estate data nationwide for land and property data, released its November 2022 U.S. Foreclosure Market Report, which shows there were a total of 30,677 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions – up 57 percent from a year ago, but down 5 percent from the prior month. “We may be at or near a peak level of foreclosure activity for 2022,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “While foreclosure starts and foreclosure completions both increased compared to last year’s artificially low levels, they declined from last month, and lenders often put a moratorium on foreclosures during the holiday season.” Highest foreclosure rates remain in Illinois, Delaware, and New Jersey Nationwide one in every 4,580 housing units had a foreclosure filing in November 2022. States with the highest foreclosure rates were again: Illinois (one in every 2,401 housing units with a foreclosure filing); Delaware (one in every 2,736 housing units); New Jersey (one in every 2,916 housing units); South Carolina (one in every 3,195 housing units); and Wyoming (one in every 3,237 housing units). Among the 223 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in November 2022 were Cleveland, OH (one in every 1,913 housing units with a foreclosure filing); Columbia, SC (one in every 1,938 housing units); Davenport, IA (one in every 2,000 housing units); Bakersfield, CA (one in every 2,034 housing units); and Atlantic City, NJ (one in every 2,063 housing units). Those metropolitan areas with a population greater than 1 million, with the worst foreclosure rates in November 2022, including Cleveland, OH were: Chicago, IL (one in every 2,221 housing units); Riverside, CA (one in every 2,294 housing units); and Philadelphia, PA (one in every 2,539 housing units). Foreclosure completions up 64 percent from last year Lenders repossessed 3,770 U.S. properties through completed foreclosures (REOs) in November 2022, down 9 percent from last month but up 64 percent from last year. States that had the greatest number of REOs in November 2022, included: Illinois (343 REOs); New York (313 REOs); Pennsylvania (220 REOs); Michigan (210 REOs); and Ohio (208 REOs). Those major metropolitan statistical areas (MSAs) with a population greater than 1 million that saw the greatest number of REOs in November 2022 included: Chicago, IL (278 REOs); New York, NY (174 REOs); Philadelphia, PA (103 REOs); Detroit, MI (77 REOs); and Houston, TX (59 REOs). Greatest number of foreclosure starts still in California, Texas, and Florida Lenders started the foreclosure process on 20,686 U.S. properties in November 2022, down 5 percent from last month but up 98 percent from a year ago. “Foreclosure starts in November nearly doubled from last year’s numbers, but are still just above 80 percent of pre-pandemic levels,” Sharga added. “We may continue to see below-normal foreclosure activity, since unemployment rates are still very low, and mortgage delinquency rates are lower than historical averages.” States that had the greatest number of foreclosure starts in November 2022 again included: California (2,244 foreclosure starts); Texas (2,114 foreclosure starts); Florida (1,709 foreclosure starts); New York (1,575 foreclosure starts); and Illinois (1,243 foreclosure starts). Those major metropolitan areas with a population greater than 1 million that had the greatest number of foreclosure starts in November 2022 included: New York, NY (1,593 foreclosure starts); Chicago, IL (1,028 foreclosure starts); Houston, TX (685 foreclosure starts); Miami, FL (657 foreclosure starts); and Los Angeles, CA (642 foreclosure starts). Media Contact:Christine Stricker949.748.8428christine.stricker@attomdata.com

by admin
Comment Off
331 views

HPSI Breaks Consecutive-Decline Streak but Remains Just Above All-Time Low The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased 0.6 points in November to 57.3, its first increase in nine months, though it remains just above the all-time low set last month and significantly lower than its level at this time last year. Four of the index’s six components increased modestly month over month, including those associated with homebuying and home-selling conditions; however, both remain well below year-ago levels, having declined on net 28 and 38 points, respectively. Elevated mortgage rates continue to constrain affordability, and 62 percent of respondents expect mortgage rates to rise even further over the next year, compared to only 10 percent who expect rates to decline. Year over year, the full index is down 17.4 points. “Both consumer homebuying and home-selling sentiment are significantly lower than they were last year, which, in our view, is unsurprising considering mortgage rates have more than doubled and home prices remain elevated,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Following eight months of consecutive declines, the HPSI did tick up slightly in November but is essentially unchanged since hitting its all-time low last month. Consumers continue to expect mortgage rates to rise but home prices to decline, a situation that we believe will contribute to a further slowing of home sales in the coming months, as both homebuyers and home-sellers have reason for apprehension. We expect mortgage demand to continue to be curtailed by affordability constraints, while homeowners with significantly lower-than-current mortgage rates may be discouraged from listing their property and potentially taking on a new, much higher mortgage rate.” Home Purchase Sentiment Index – Component Highlights Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased in November by 0.6 points to 57.3. The HPSI is down 17.4 points compared to the same time last year. Read the full research report for additional information. About Fannie Mae’s Home Purchase Sentiment IndexThe Home Purchase Sentiment Index® (HPSI) distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey® (NHS) into a single number. The HPSI reflects consumers’ current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making. The HPSI is constructed from answers to six NHS questions that solicit consumers’ evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier. Fannie Mae Newsroomhttps://www.fanniemae.com/news

by admin
Comment Off
395 views

Provides end-to-end acquisition, asset management, maintenance and resident care for BFR and SFR rentals nationwide Build-for-Rent (“BFR”) commercial real estate investment firm SVN | SFR Capital Management (“SVN | SFR”) announced it has entered into a joint venture agreement to acquire, own and operate rental homes with Marketplace Homes, a national brokerage and property management company. The joint venture will operate under the ‘Curbside Residential’ brand and integrate Marketplace Homes’ end-to-end property management, asset management, leasing, maintenance and resident service solutions with SVN | SFR’s national BFR acquisition and SFR/BFR operating platform with new construction builders and SFR/BFR asset management support. “With the residential rental home sector experiencing unprecedented national investor and consumer demand, we believe now is the time to invest in SFR and BFR portfolios,” said Jeff Cline, CEO of SVN | SFR Capital Management. “Marketplace Homes’ depth in marketing, lease-up, maintenance and importantly, resident care, will deliver unmatched daily operations and instill the sense of community we strive for so rental residents stay happy and enjoy the community they live in longer.” With increasing home mortgage rates, the national demand for affordable single-family rental housing and BFR communities is at an all-time high across population segments (including millennials, young families with children and baby boomers), all of whom are seeking space, location and professional home management. According to John Burns Real Estate Consulting, national (99 market roll-up) single-family rents are up +6.5% YOY as of July 2022 and new lease rents for the top 20 SFR markets are up +10.1% YOY. As rental home demand increases across the U.S., so does the demand for experienced asset and property management professionals by pension funds and investors who are bullish on large-scale rental housing investments. “The combined deal flow, large national footprint and local operating capabilities between SVN | SFR and Marketplace Homes creates a JV that is scaling quickly and efficiently,” said William Dickson, president of Marketplace Homes. “There’s a lot of competition in SFR and BFR right now, but this is a partnership that will stand out for its unique acquisition pipeline, professional property management and vertical integration.” SVN | SFR also recently announced joint ventures with several homebuilders and land developers for the new construction of several thousand homes annually in BFR communities over the next several years. The first purpose-built residential communities are slated to commence development in 2023 in Texas and several other states. About Marketplace Homes Marketplace Homes is a national brokerage and property management company. The brokerage sells primarily new construction homes focusing on solving contingency problems. The property management division works with investors of all sizes to acquire, rehab, lease, maintain and sell investment properties in dozens of states. Marketplace Homes leverages its infrastructure, technology, processes and relationships to solve real estate’s hardest problems. Marketplace Homes has also sourced, underwritten and funded over 2,000 multi-family units currently under construction across the US. For more information, visit www.marketplacehomes.com. About SVN | SFR Capital Management SVN | SFR Capital Management, (“SVN | SFR”), based in New York, is a private, commercial real estate investment firm dedicated to investment in the Build-for-Rent (“BFR”) asset class across the U.S. SVN International Corp. (“SVNIC”), a globally recognized, Boston-based, full-service CRE advisory firm, is an affiliated entity. Through structured homebuilder joint ventures, SVN | SFR plans to acquire and aggregate approximately 35,000+ new construction, BFR homes in the near-term, through an initial capital raise of several billion in equity and debt capital, for eventual disposition at stabilization as a large-scale institutional rental home portfolio. For more information call 602.466.1381 or email SFRCapitalManagement@svn.com.

by admin
Comment Off
175 views

Risk of Potential Downturns Highest in New York City, Chicago and Philadelphia;Other At-Risk Markets Scattered Along Eastern Seaboard and Inland California;While South Region Still Less Vulnerable ATTOM, a leading curator of real estate data nationwide for land and property data, released a Special Housing Risk Report spotlighting county-level housing markets around the United States that are more or less vulnerable to declines, based on home affordability, foreclosures and other measures in the third quarter of 2022. The report shows that New Jersey, Illinois, Delaware, and inland California continued to have the highest concentrations of the most-at-risk markets in the country, with the biggest clusters in the New York City, Chicago and Philadelphia areas. Southern and Midwestern states remained less exposed. The third-quarter patterns – based on gaps in home affordability, underwater mortgages, foreclosures and unemployment – revealed that New Jersey, Illinois and California had 28 of the 50 counties most vulnerable to potential declines. That was roughly the same as the 27 more-at-risk markets that were in those states in the second quarter of this year. During a time when the broader U.S. housing market boom slowed considerably, those concentrations still dwarfed other parts of the country. The 50 most at-risk included eight in and around New York City, seven in the Chicago metropolitan area, four in or near Philadelphia and nine spread through northern, central and southern California. The rest were clustered mainly in other parts of the East Coast, including all three counties in Delaware. At the other end of the risk spectrum, the South, Midwest and western areas outside California had the highest concentration of markets considered least vulnerable to falling housing markets. Counties were considered more or less at risk based on the percentage of homes facing possible foreclosure, mortgage balances that exceeded estimated property values, the percentage of average local wages required to pay for major home ownership expenses on median-priced single-family homes, and local unemployment rates. The conclusions were drawn from an analysis of the most recent home affordability, equity and foreclosure reports prepared by ATTOM. Unemployment rates came from federal government data. Rankings were based on a combination of those four categories in 581 counties around the United States with sufficient data to analyze in the third quarter of 2022. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the four criteria. The ongoing wide disparities in risks throughout the country remained in place at a time when the overall U.S. housing market had one of its weakest third-quarter performance in the past decade. Key measures for the period running from July through September of 2022 showed the national median home value decreasing 3 percent, home-seller profits declining, foreclosures doubling, compared to the same period in 2021, and mortgage lending plummeting to its lowest level in three years. That happened as 30-year mortgage rates climbed close to 7 percent, inflation remained at a 40-year high and the stock market fell. Each of those forces cut into what home buyers could afford. As with past ATTOM reports on market risk, the latest vulnerability gaps do not suggest an imminent, major fall in home values or equity anywhere in the nation. What they do show is different locations facing greater or less risk amid an increasingly uncertain future for the U.S. economy hanging over the housing market. Most-vulnerable counties again clustered in the Chicago, New York City and Philadelphia areas, along with sections of CaliforniaTwenty-eight of the 50 U.S. counties considered most vulnerable in the third quarter of 2022 to housing market troubles (from among 581 counties with enough data to be included in the report) were in the metropolitan areas around Chicago, IL; New York, NY; and Philadelphia, PA, as well as in California. California markets on the list remained mostly inland, away from the coast. The 50 most at-risk counties included three in New York City (Kings, New York and Richmond counties, which cover Brooklyn, Manhattan and Staten Island), five in the New York City suburbs (Essex, Passaic, Sussex and Union counties in New Jersey and Rockland County in New York) and seven in the Chicago metropolitan area (Cook, De Kalb, Kane, Kendall, Lake, McHenry and Will counties, all in Illinois). The four in the Philadelphia, PA, metro area that were among the top 50 in the third quarter were Philadelphia County; Gloucester County, NJ; New Castle County, DE, and Cecil County, MD. Another 11 were scattered along other parts of the Mid-Atlantic region, including the other two counties in Delaware (Kent and Sussex) and three others in New Jersey (Atlantic, Cumberland and Warren). “As the prospect of a possible recession hangs over the U.S. economy, counties in three of the seven largest metropolitan areas – New York City, Chicago, and Philadelphia – are among the most vulnerable to a potential downturn in their housing markets,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “These counties, and many more in Central California share a number of traits – poor affordability, relatively high unemployment and foreclosure rates, and homeowners who are underwater on their loans – which could spell trouble if the economy takes a turn for the worse.” California had nine counties in the top 50 list: Butte County (outside Sacramento), Humboldt County (Eureka) and Shasta County (Redding) in the northern part of the state; Madera County (outside Fresno), Merced County (outside Modesto), Stanislaus County (Modesto) and Tulare County (outside Fresno) in central California, and Kern County (Bakersfield) and Riverside County in the southern part of the state. Higher levels of unaffordable housing, underwater mortgages, foreclosures, and unemployment continued in counties most at-risk of downturnsMajor home ownership costs (mortgage payments, property taxes and insurance) on median-priced single-family homes consumed more than one-third of average local wages in 33 of the 50 counties that were most vulnerable to market problems in the third quarter of 2022. The highest percentages in those markets were in Kings County (Brooklyn), NY (106.1 percent of average local wages needed for major ownership costs); Rockland County, NY (outside New York City) (75.6 percent); Riverside County, CA (63.8 percent); Richmond County (Staten Island), NY (63.3 percent) and New York County (Manhattan), NY (60.6 percent). Nationwide, major expenses on typical homes sold in the third quarter required 30 percent of average local wages. At least 7 percent of residential mortgages were underwater in the third quarter of 2022 in 28 of the 50 most at-risk counties. Nationwide, 5.7 percent of mortgages fell into that category, with homeowners owing more on their mortgages than the estimated value of their properties. Those with the highest underwater rates among the 50 most at-risk counties were Peoria County, IL (16.8 percent underwater); Tangipahoa Parish, LA (outside New Orleans) (15.7); Saint Clair County, IL (outside St. Louis, MO) (15.1 percent); Kankakee County, IL (outside Chicago) (14.8

by admin
Comment Off
206 views

The Midwest will move to the forefront as affordability remains housing’s biggest issue Midwestern markets will heat up, and more friends and family members will pool their money to buy homes together in 2023, as people look for new ways to overcome the housing affordability crisis. However, that crisis will stabilize — if not improve — from its pandemic-era apex, Zillow® economists predict. New construction will be focused on rental units, and we should see a jump in homeowners becoming first-time landlords. Those are among a slew of new predictions the Zillow Economic Research team has made heading into 2023. “Americans finding ways to make payments on a roof over their heads is going to drive the market next year. Where costs are lower, we’ll see healthier sales and inventory levels. If rent is less expensive than a new mortgage, we’ll see increased demand for rentals — something builders and landlords understand,” said Zillow chief economist Skylar Olsen. “Affordability is going to be the biggest factor in housing for 2023, but there’s room for optimism on that front if mortgage rates recede.” The Midwest to feature front and center in 2023Unlike in nearly every other region of the United States, prices in most Midwest metro areas haven’t risen to outrageous extremes. Mortgage costs are still within reason compared with incomes across Missouri, Kansas, Iowa, Ohio and smaller metros in Illinois, which will allow first-time buyers to take the plunge. Lower rents and home prices in these areas, as well as in some Pennsylvania, New York and other Northeastern metros, make it easier to save up for a down payment. A typical mortgage payment1 in Topeka is $1,269, compared to $4,129 in Sacramento. Having houses available to choose from is another key component of a healthy market, and the Midwest stands out. Inventory there isn’t in a massive hole compared to pre-pandemic times, and more homeowners are willing to list than elsewhere in the country, encouraged by more consistent demand from buyers. Buying with friends and family will gain momentumSoaring housing costs have been a popular topic of conversation in 2022, but buying a home with a friend or relative who isn’t a partner or spouse turned out to be more than idle chatter for a surprising share of folks. With housing costs rising far beyond previous affordability norms, those chasing homeownership are turning to unconventional means of making it pencil out financially, and this should increase in 2023. A Zillow survey fielded this spring found that among recent successful home buyers, 18% had purchased with a friend or relative who wasn’t their spouse or partner. Of prospective home buyers, 19% intended to buy with a friend or relative in the next 12 months. Affordability and qualifying for a mortgage were cited as the top reasons for buying a home with someone else — both are challenges that are now even more acute. Mortgage payments for a typical U.S. home rose from requiring 27% of median household income in January to 37% in October — far beyond the 30% threshold at which housing becomes a financial burden. As more millennials and now Generation Zers enter what will still be a historically expensive market in 2023, more folks are set to put “bestie” to the ultimate test. Affordability crisis will stabilizeMonthly mortgage costs have doubled since 2019, driven by pandemic-era price hikes and, to an even greater degree, by rapid mortgage rate growth this year. High mortgage rates are not only pushing buyers to the sidelines, they’re tanking new inventory as homeowners hang on to their current houses and their historically low mortgage rates. Rents have grown faster than wages, making it harder to save up for a down payment, and renters of color are more likely to have experienced rising rents for their units. Affordability will continue to be the driving force in the housing market in 2023, but there is a decent chance it will improve. At the very least, the market should stabilize, making it possible for households to budget and plan for housing decisions coming up in the months and years ahead. Zillow expects national home values to remain relatively flat next year, and even fall in the markets most challenged by affordability issues. Mortgage rates are seeing some recent and encouraging progress downward as inflation and labor market tightness show some small signs of easing. If we’ve actually turned the corner on inflation, that should continue. Rent growth should move closer to historical norms next year, as well. Annual growth came down quickly from a massive peak of 17.1% in February to 9.6% by October. Rents fell during the month of October, the first time in two years, signaling a return to regular seasonal patterns. New construction strength will be in rentalsDespite a pullback in permits and starts for single-family construction, the sheer number of houses currently under construction after the pandemic boom – still up 50% since February 2020 – will mean continued rolling deliveries to the market. This temporary glut in available new homes will drive price reductions for new construction, and potentially in the existing home market, too, which otherwise will continue to experience low inventory. In contrast, builders of multifamily units are feeling much more bullish. The number of multifamily units to start construction each month has increased steadily, rising 8% from pre-pandemic levels in October. Elevated multifamily permits point to a strong vote of confidence in continued demand for rental units, despite looming recession fears. This confidence will also encourage more construction of build-for-rent single-family homes, as many would-be homeowners will need to continue renting into later stages of life if they’re currently unable to qualify and move forward with a purchase of their own home. We’ll see a surge in first-time landlords in 2023 The record-low mortgage rates of 2020 and 2021 provided the leverage of a lifetime for investment in a second house. Vacation areas saw significant upticks in sales, and 34% of buyers surveyed by Zillow in 2021 said the opportunity to rent out their entire house was an important reason for buying it – up from 27% in 2018 and 28% in 2019. With rent growth expected to rise faster than home values over the next year, many