Housing Starts Rose, Permits Fell In April

Residential construction saw mixed results in April as builders approach the high-rate environment with caution. Housing starts were up by 5.7% to a 1.36 million annualized rate last month but down 0.6% YOY, according to data from the U.S. Census Bureau. Analysts expected construction to rise, which it did– but by far less than the 1.42 million rate forecasted. Permits slipped, down 3% from March’s revised rate of 1,485,000 and 2% YOY. This is the third straight month that this future construction indicator has fallen. It’s now at its lowest level since August. The data suggests builders are moving cautiously as mortgage rates remain elevated. Rates averaged 7.09% last week, an improvement after a long spell of increases but still…

Land Gorilla CEO Says Technology Can Make Construction Lending More Profitable

By KIMBERLEY HAAS The CEO of Land Gorilla says advancements in technology are creating opportunities for more profitable construction lending. Sean Faries said since the California-based technology service provider for banks, credit unions, and mortgage bankers started in 2010, there has been a move from spreadsheets to digitization. Land Gorilla is now taking things a step further, allowing lenders to build their own workflows with automation to complement them. “We are creating efficiencies for the financial institution that’s utilizing the software, where they’re able to reduce headcount or they’re able to improve processing times at such a magnificent return that the software far pays for itself,” Faries said. Faries said that they use machine learning combined with “a lot of…

Starts, Permits Made A Comeback In February

Residential starts made a comeback last month after severe winter weather slowed builders down. Residential home construction increased by 10.7% in February to a 1.52 million annualized rate, according to data from the U.S. Census Bureau. This is the largest increase since May, and well above Bloomberg estimates of a 1.44 million pace. Both single-family and multifamily construction increased, with multifamily starts in particular rising 8.3% after a significant dip. Permit applications also performed well, soaring to 1.52 million, the fastest rate since August. They offer an indication of future construction. Builders are feeling optimistic as mortgage rates stabilize, enticing buyers off the sidelines. Existing inventory remains constrained, making new construction a hot commodity for buyers. “With the Federal Reserve…

Residential Construction Tanked In January Due To Apartment Downslide

Home construction lost ground in January, collapsing to the slowest pace in five months. Residential home construction fell to a 1.33 million annual pace, down from a revised 1.56 million in December, according to data from the U.S. Census Bureau. This is the biggest drop since April 2020, and a far cry from Wall Street expectations of 1.45 million. Single-family starts fared poorly, down by a 4.7% adjusted annual rate of 1.004 million units last month. But the driving factor was multifamily, which shrank by 35.6%, wiping out gains the month prior. On the bright side, permits once again rose, besting last month’s 5-month high. Permits offer an indication of future construction. Analysts partly attribute the inconsistency to severe winter…

Housing Starts Sank In June, But Permits Offer A Glimmer Of Hope

Housing construction declined last month, but the future looks brighter thanks to a bump in permits. New U.S. home construction rose for the first time in six months, according to data from the U.S. Census Bureau. Residential starts fell by 8% to an annualized rate of 1.43 million. This is well below estimates from economists surveyed by Bloomberg, who expected a pace of 1.48 million. Permits for new construction also dipped, down 3.7%% to a rate of 1.44 million. Permits offer an indication of how many homes will be built in the coming months. But on the bright side, single-family construction permits in particular saw an increase, up 2.2% from May to the highest pace since June 2022. Builders continue…

Predictions: Chilly Market Ahead For Housing In 2023, Conditions Improve In 2024

By CHUCK GREEN According to experts, not only is the housing market expected to continue cooling this year, the forecast remains chilly entering 2023. Real house prices jumped 10.5% in September and logged a 60.6% YOY increase, according to First American’s Real House Price Index. But prices fell in 15 out of the top 50 markets they analyze. Mortgage originations saw their largest annual decline in 21 years this fall, further evidence that the housing boom is coming to an end. Originations fell 47% YOY in Q3, according to ATTOM Data’s Q3 2022 U.S. Residential Property Mortgage Origination Report. Quarter-over-quarter they were down 19%, the sixth consecutive drop. So, what in the name of the cranky barometer’s up? For one thing, surprise, surprise,…

New Home Apps Dropped In September, Putting Pressure On Worried Builders

New home mortgage applications dropped sharply in September as buyers backed away from decades-high interest rates. The Mortgage Bankers Association’s Builder Application Survey for September 2022 found that applications for new home purchases fell 13.2% YOY and 7% from August. Based on that data, MBA predicts that new single-family home sales ran at a seasonally adjusted rate of 637,000 in September. “New home purchase activity declined in September as prospective homebuyers pulled back in response to higher mortgage rates, increased concern about an impending recession, and a broader slowdown in home-price growth,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The average 30-year fixed mortgage rate increased almost a full percentage point in the last month, greatly reducing…

Cooldown Coming In Housing Market

By TYRONE TOWNSEND Rising mortgage rates may not have brought the housing market to a halt just yet, but experts are predicting a cooldown that will come in waves and hit different areas of the country at different times. As home prices begin to level off, the 30-year mortgage rate is moving between 5% and 6%. At the same time, consumer confidence is dwindling, and economic statistics indicate the housing industry is cooling after its frenzied surge during the Covid-19 pandemic. As a result, several Wall Street analysts are revising their outlooks for the homebuilding sector and downgrading some equities.  “The housing market faces both demand-side and supply-side challenges,” Robert Dietz, chief economist at the NAHB, said in a statement.…

Builder Confidence Drops, Signaling Trouble For The Housing Market

Builder confidence dropped two points in June to its lowest level since June 2020, according to the National Association of Home Builders(NAHB)/Wells Fargo Housing Market Index (HMI). The HMI asks builders for their opinions on current single-family home sales and sales expectations for the next six months, as well as rate their traffic of prospective buyers. Any number under 50 indicates that more builders view conditions as worse than better. The HMI posted a reading of 67 for the month of June. It is the sixth consecutive month of decline for the index. NAHB’s press release called it a “troubling sign for the housing market.” “Six consecutive monthly declines for the HMI is a clear sign of a slowing housing…

Pending Home Sales Fell In November

Pending home sales dropped 2.2% in November, a 2.7% decrease year-over-year (YOY), according to the National Association of Realtors’ (NAR) Pending Home Sales Index (PHSI). The PSHI, which predicts home sales based on contract signings for existing homes, fell to 122.4. An index of 100 is equal to signing activity in 2001. “There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices,” said Lawrence Yun, NAR’s chief economist.  “While I expect neither a price reduction, nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability.” Signings declined in all four…