This Week in Real Estate: May 26, 2015


Good morning!

The topic dominating the headlines This Week in Real Estate are the surging construction start numbers in April. In addition, there is an overwhelming sense of pride and responsibility about being part of one of the most significant companies in the world…Berkshire Hathaway. Below are a few of the highlights from the third week of May that influence our business:

* ​​Construction Numbers Highest Since 2007, Crushing Expectations. Construction started on new U.S. homes sprang up 20.2% in April to a seasonally adjusted annual rate of 1.14 million. That’s the biggest monthly percentage gain in more than 24 years and the highest level since November 2007, the U.S. Commerce Department reported. “The April data also strengthens the view that the weakness in February and March was largely transitory and likely caused by harsh weather conditions,” Robert Wetenhall, an analyst with RBC Capital Markets, wrote in a research note. Starts for single-family homes rose 16.7% to an annual rate of 733,000, the fastest pace since early 2008, while starts in buildings with at least five units jumped 31.9% to a pace of 389,000. Full story…

* Total Loans in Foreclosure Fall to Lowest Level Since 2008. Black Knight Financial Services, a Fidelity National Financial company, released its “first look” at the housing data from April reporting that foreclosure starts were down 22% from March to April, falling to a level of 73,500. That total is also down 7% from a year ago. Additionally, national inventory of loans in foreclosure continued its decline toward pre-crisis norms, falling roughly 25.5% from last April to 1.51%, the lowest it’s been since January of 2008. Black Knight notes that there was a slight seasonal increase in April delinquencies, up by 1.46%, which pushed the national rate up to 4.77%. That’s still low by post-crisis historical standards, and down 15.04% from last year at this time.
Fully story…

* Ellie Mae Report Shows Continued Transition Into Purchase-Driven Market. As interest rates slowly tick up, purchase originations are now again outpacing refinance originations, according to a new report from EllieMae. Ellie Mae’s Origination Insight Report for April, which is derived from a “robust sampling” of approximately 66% of all mortgage applications that were initiated on Ellie Mae’s Encompass mortgage management solution, showed that 52% of mortgage loan originations were purchases in April. Refinance originations made up 47% of the total originations for the month of April, marking the first month since December that purchases outpaced refinances. Overall, conventional loans made up 64% of all originations in April, according to Ellie Mae’s report. FHA loans made up 24% of the total, followed by VA loans made up 9% of the total, and “other,” which made up 3%. Full story…

* Yellen: If Nothing Changes, Expect Higher Interest Rates This Year. As predicted by many economists, the Federal Reserve is indeed considering raising the Federal Funds Rate later this year, Fed Chair Janet Yellen said Friday. In a speech on Friday Yellen said that the Fed is seeing widespread economic improvement and expects that improvement to continue. And if the economy improves as expected, she believes it will be “appropriate” for the Fed to raise the Federal Funds Rate this year. “If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target and begin the process of normalizing monetary policy,” Yellen said. “To support taking this step, however, I will need to see continued improvement in labor market conditions, and I will need to be reasonably confident that inflation will move back to 2% over the medium term.” Full story…

* Berkshire Hathaway: The Largest, Most Powerful Public Company in the U.S. The Forbes Global 2000 is a comprehensive list of the world’s largest, most powerful public companies. This year’s Global 2000 companies hail from 61 countries. Berkshire Hathaway ranked 5th behind China’s four biggest banks making Berkshire Hathaway the only non-bank to finish in the top 5 and the largest U.S. company.
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I hope you enjoyed the holiday weekend. I encourage you at some point today to intentionally pause, remember and give thanks to all the men and women who made the ultimate sacrifice while serving our country.

Have a productive week!



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