The Wall Street Journal reports ahead of the housing crisis, Donald Trump expressed excitement about the money he’d make if the housing bubble burst. Now, Hillary Clinton, is trying to use those words against him.
New home sales surged in April, to their biggest one-month jump in 24 years.
Sales soared 16.6% to a seasonally adjusted annual rate of 619,000, and killed estimates of a 525,000 pace.The median price also jumped, rising 9.7% from 12 months ago to $321,100. But the inventory of homes for sale in April was 3.6 percent lower than a year ago, according to the National Association of Realtors.
“The surge in New Homes sales is a positive development in relative terms, but in real terms it’s still an anemic number,” says The Collingwood Group Chairman Rood. “One of the major contributing factors to that low number has been lack of construction of homes at or under $200,000. The number of homes built in the starter home range is roughly 80% of those built before the housing crash,” explains the former Fannie Mae Executive. “And you can’t buy what’s not for sale. There are a confluence of events and forces that have snuffed out this market for builders – high land costs and permitting fees, material costs, and labor costs make building a $200,000 home or less nearly impossible for builders who aspire for double digit returns,” cautions Rood.
HomeBuilder Toll Brothers Beats the Street
Raising the roof for homebuilder stocks, toll Brothers says profit for its second quarter rose to $89.1 million, or 51 cents a share, from $67.9 million, or 37 cents a share, in the year-ago period. Revenue climbed to $1.12 billion, up 31% from $852.6 million last year. Analysts surveyed by FactSet expected earnings of 46 cents a share on revenue of $1.04 billion. The luxury-homes builder said it expects to deliver between 5,800 and 6,300 homes in the full-year 2016. That means revenue should come in between $4.76 billion and $5.36 billion for the full year.
Politico: New Yorkers Movin’ on Up
Despite reports of a supply glut and a slowdown, New York City’s luxury residential market is still hot and is growing at the same pace as gold, according to a new report. During a six-month period that ended on March 31, 566 apartments in Manhattan’s 100 priciest buildings were sold, up from 334 during the same period a year earlier, according to a report released on Tuesday by real estate website CityRealty. At the same time, the average price per square foot saw an 8 percent drop from last year to $2,602, while the median price per square foot inched up 3 percent to $2,344. CityRealty concluded that the changes indicate a fairly steady market for high-end condos included in the annual analysis, ‘The CityRealty 100,’ which ranks the top 100 residential condos in Manhattan that have a minimum price of $1,000 per square foot during the preceding 12 months or whenever the last transactions took place.
read more: http://politi.co/1XsJaI0
HuffPost: Mortgage Rates Are Low, So Why Isn’t Homeownership More Affordable?
It’s never been cheaper to borrow money, and that includes home loans. Mortgage rates have been falling all year and are flirting with historic lows.
That’s made homeownership more affordable for some people, but not nearly as much as you’d think. That’s because house prices are rising faster than interest rates are falling. Call it the dilemma of Fed policy, which has been keeping money cheap since 2009 in an effort to light a fire under the economy. It hasn’t exactly worked.
Since the beginning of the year, falling mortgage rates in theory have shaved $44 off the monthly payment on a median-priced home. Take rising prices into account, though, and the savings is less than half that, only $18 a month, according to an analysis from Black Knight Financial Services, which puts home price appreciation at 5.3 percent this year.
Some places have it worse. In Washington, Colorado and Oregon, home price gains this year have completely canceled out any interest rate savings. The monthly mortgage payment on homes bought in those states now is higher than it would have been had buyers closed a deal at the end of 2015, Black Knight found.
read more: http://www.huffingtonpost.com/lorraine-woellert/mortgage-rates-are-low-so_b_10108110.html
Bloomberg: Mortgage Debt Rises to 4-year High
Increased mortgage borrowing was behind a 1.1 percent rise in U.S. household debt in the first quarter, with slowdowns in other areas such as credit-card balances and auto loans, according to the Federal Reserve Bank of New York.
Total mortgage debt rose 1.5 percent from the final quarter of 2015 to $8.37 trillion, marking the highest level since the third quarter of 2011, according to the New York Fed’s quarterly report on household debt and credit, released Tuesday. Auto-loan debt rose to a record high of $1.07 trillion in data going back to 2003, but logged the smallest percentage increase since 2012.
“Delinquency rates and the overall quality of outstanding debt continue to improve,” Wilbert van der Klaauw, senior vice president at the New York Fed, said in a statement.
Five percent of outstanding debt was in some stage of delinquency, the lowest amount since the second quarter of 2007, the New York Fed said.
Credit-card balances fell in the first quarter from the previous period, but were up 4.1 percent from a year earlier. Student-loan debt rose to a record high of $1.26 trillion, but the 6.1 percent rise from a year earlier marked the slowest pace of growth on record in the data
read more: http://www.ocregister.com/articles/debt-716960-quarter-percent.html
WSJ: Don’t Count Out LendingClub
LendingClub Corp. shares soared, as a Singapore-based investment group made the online lender the latest pickup in a recent U.S. shopping spree.
Shanda Group, a private investment firm founded by Chinese Internet entrepreneurs, amassed an 11.7% stake in LendingClub, according to a regulatory filing.
The stake, including shares and options, could make Shanda the largest shareholder in LendingClub, which has been besieged by investors, regulators and industry critics following the abrupt announcement of the forced resignation of its founder and chief executive, Renaud Laplanche, on May 9.
CNBC: It’s the end of Goldman Sachs as we know it – Expanding into FinTech
Goldman Sachs is spreading its wings after years of attempting to retreat from Wall Street’s limelight in the wake of the global financial crisis.
That means exporting the bank’s brand into new markets, making deals and striking partnerships, and probably using competitors’ weaknesses against them. Now, its next challenge comes not from the traditional businesses upon which the bank has built its reputation, but Goldman Sachs’ quiet push into consumer businesses long occupied by its Wall Street competitors.
“For Goldman Sachs, the question is: What will they become when they grow up,” said CLSA banks analyst Mike Mayo.
It’s also a matter of how the bank grows up. While Goldman is going digital, it is not expected the bank will make any big deals in a financial technology sector that has generated outsized valuations recently. The bank already acquired online wealth manager Honest Dollar in March. The build-out of its online lending program, for now dubbed “Mosaic,” is an internal priority for the bank.
For Goldman Sachs, which has already placed various early-stage investments into fintech companies, partnerships may be more common than mergers and acquisitions.
Two sources said Goldman had selectively spoken with companies, including online lenders, about expanding its network of partnerships among fintech start-ups. The bank declined to comment regarding digital plans. But, last week, Goldman announced plans to sell investments developed by online investment platform Motif.
read more: http://www.cnbc.com/2016/05/23/its-the-end-of-goldman-sachs-as-we-know-it.html
Mortgage rates are at three-year lows, but due to increased regulations they are difficult to get, especially for millennials and other first-time homebuyers.Collingwood Senior Vice President, Eric Chader, discussed mortgage-rates and more on the Jim Bohannon Show on the nationwide Westwood Radio Network.
MReport: How Will the Presidential Election Affect Housing?
As the 58th presidential election draw closer, many in the mortgage industry are wondering who will win and how the new president will impact housing.
….Vice Chairman of The Collingwood Group, Brian Montgomery, sat down with MReport to provide his take on the how the presidency will affect housing, particularity if Republican nominee Donald J. Trump or Democratic candidate Sen. Bernie Sanders (I-Vermont) wins the election.
“I don’t disagree with the report. However, I was taken aback by the extra negativity toward Trump, and I began to wonder how they came to that conclusion,” Montgomery stated. “I think the problem with Trump is that it is still unknown what he would do for housing. I think that’s where the hesitation comes in. There is uncertainty in the unknown. There is a little of the unknown among all the candidates.”
read more: http://www.themreport.com/news/government/05-18-2016/will-presidential-election-affect-housing
Freddie’s 1Q Loss at Odds with Its Risk-Sharing Gains
Freddie Mac’s burgeoning efforts to offload credit exposure to private investors through its innovative risk-sharing transactions highlight a growing tension between its financial results and regulatory risk management goals.
…..And in the absence of new efforts at GSE reform, current plans call for Fannie and Freddie to shrink their portfolios to the point where they have a zero net worth in 2018, leaving no buffer against losses, notes Tim Rood, chairman of The Collingwood Groupand a former Fannie Mae executive.
“Each year the can is kicked down the road, the situation becomes more dire,” he said.
read more: http://www.nationalmortgagenews.com/news/secondary/freddies-1q-loss-at-odds-with-its-risk-sharing-gains-1077235-1.html
MReport: Feds Need to Prepare for Senior Housing Boom
By 2030, a full 20 percent of the American population will be at least 65 years old. The bad news is that a large percentage of that population will not be financially prepared to fund their retirements and age in their own homes, and the government needs to start fixing the problem now, according to a report by the Bipartisan Policy Center.
The report, released Sunday, finds little preparation, by both seniors themselves and the federal government, to deal with the lack of affordable housing, currently measured in millions of units. Add to that the fact that “most homes and communities lack the structural features and support services that can make living there independently a safe, realistic option,” and the picture gets dimmer still, the report states.
The collision of inadequate housing, less money, and a woeful lack of preparations such as longterm care insurance gets even worse when adding in the fact that about 70 percent of adults over 65 will eventually require help with daily living activities such as bathing, food preparation, dressing, and medication management, the BPC states.
read more: http://www.themreport.com/news/data/05-23-2016/feds-need-to-prepare-for-senior-housing-boom
“Like” Facebook’s Mark Zuckerberg for this Move?
Zuck says four homes he bought near his own in Palo Alto, Calif., will be razed and replaced by smaller ones so as not to have a view of the 32-year-old billionaire’s bedroom.
According to an application filed with the city’s planning department, the homes that Zuckerberg bought in 2012 and 2013 for more than $43 million in Palo Alto’s tony Crescent Park neighborhood will be demolished. They’ll be replaced with smaller properties on the same lots so inhabitants can’t see into the Facebook chief’s backyard. We don’t see Zuckerberg getting many “happy face” likes for this move but he’s got the “$”.
MarketWatch: Cheapest Gas Prices in Over a Decade this Memorial Day
Drivers are expected to pay the lowest Memorial Day weekend prices for gasoline since 2005 thanks to the plunge in crude-oil prices over the past two years.
“As an army of motorists descend onto the nation’s thoroughfares for the coming holiday, gasoline prices are the lowest they’ve been this time of year since 2005,” said Patrick DeHaan, senior petroleum analyst at GasBuddy.com, a retail fuel-pricing information and data provider.
More than 38 million Americans—the most since 2005—are expected to travel during this year’s Memorial Day holiday period, defined as Thursday, May 26 to Monday, May 30, according to report released Thursday from AAA, a leisure travel and motorist group, and IHS, an information and analysis provider
“Americans might save $15 billion on gas during the summer driving season compared to a year ago,” AAA said in a news release issued.
The last time prices were this low for a Memorial Day holiday was in 2005, when prices averaged $2.10, AAA said.
read more: http://www.marketwatch.com/story/gasoline-eyes-lowest-memorial-day-weekend-prices-in-over-a-decade-2016-05-19
Coming Before Memorial Day Weekend
-FHFA House Price Index 9:00 AM ET
-Pending Home Sales Index 10:00 AM ET
–Ten-X CRE Nowcast 9:00 AM ET
-Consumer Sentiment Index 10:00 AM ET
-Fed Chief Janet Yellen speaks 10:30 AM ET
-LEAVE THE OFFICE EARLY FOR MEMORIAL DAY WEEKEND!
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